You make a compelling case, and I agree that subsidizing the rider and expecting the transit agency to break even is a far better model of transit provision.
That said, I don’t think this would be viable in isolation.
First, as long as the bus is stuck on the same roads as other traffic, it cannot be faster than driving.
Second, as long as driving is intensely subsidized and full of sunk cost, driving will be/feel much cheaper for the middle class.
This leaves is where we are today, transit is not valuable to people with cars EXCEPT to get to places that are expensive to drive (which usually means either expensive to park or infeasible to park). So the only real purpose of transit is to provide some degree of mobility for people who can’t afford or can’t operate cars. That’s just not a big or rich enough market for a successful business to operate in.
If we dropped the gas tax and instead raised car tax (more fair in an era of electric cars) and adopted congestion pricing or a VMT based system, *then* I think your proposal could really work. But heavily subsidizing drivers is very popular, and efforts to make them pay what it costs to maintain the roads have largely failed politically, so I’m not very optimistic we can change this any time soon.
EDIT: I expanded these thoughts a bit to a note and re-stacked this -- I wish substack hadn't got rid of the button to both comment and re-stack at the same time! -- hope that gets more people to read your idea :)
I quibble with "transit is not valuable to people with cars EXCEPT to get to places that are expensive to drive (which usually means either expensive to park or infeasible to park)".
If we count cost in terms not only of money, but also travel time and aggravation, transit can still win. I used to work at a downtown office a couple blocks from the main train station; I could have paid for a parking stall below the building and driven in, and that would have been slightly cost-competitive to the costs of parking at the commuter-rail station and buying a return ticket. In practice, I never did this: the aggravation and difficulty of driving in peak-hour traffic kept me firmly on the train.
In an automated-driving future, we can expect congestion to get much worse, so trips will take longer, even as some of that aggravation of driving fades. Still, on net, I think rapid transit will remain competitive. Conventional feeder buses, on the other hand., will have a tough time.
More about this in the next two entries in the series!
That's fair! I agree that it's really more like "places that are a headache to drive to" which could be because of any mix of travel time (in the situations where there's an express transit option that doesn't sit in traffic), cost, or just headache. Looking forward to your future posts!
Can we resolve the asymmetry with roads by subsidizing tickets (that is, the transit company gets x$ per rider/rider mile?) it still gets some political issues/permacrisis, but it'd be an improvement over the status quo without completely abandoning transit to unfair competition with an implicitly subsidized competitor.
(Alternatively, the japanese model of enabling cheap infrastructure loans and letting transit companies capture some of the upside from real estate near stations can be good, but it goes back to giving messier incentives).
There's a lot to this idea: a permanent or long-term subsidy of $X per rider-mile would help align incentives, and would also help prioritze system expansion. But one needs to go further: the subsidy would apply not only to the transit operator, but for every passenger-movement company: Uber, Lyft, taxi companies, bikeshare.
But it should be *paired with* a VKT and/or congestion charge for dense areas, so that each actor has roughly the same incentives.
A semi related question for you BTW - one thought I've had is that self-driving rideshare can enable transit to focus on maximizing ridership by being good at closing coverage gaps for low-traffic areas. Does this seem plausible?
Not only does it seem plausible, but valuable. I'll have a fair bit to say about this soon... keep an eye out for the last entry in this series, coming in two weeks!
The argument for bringing the revenue/cost ratio up to 1.0 (plus a certain level of profit?) is fair, but transit (public and private) suffers from uncontrollable circumstances that make it extraordinarily difficult to "compete" for ridership with the alternatives. There are two ways to level the playing field (while holding other variables such as land use, density, socioeconomic conditions, geography, etc. constant): pricing ALL urban transportation similarly (in effect, road pricing or congestion pricing); and/or spending capital ($illions, with an M or a B) on dedicated transit infrastructure to make it time-competitive in particular corridors (subways, LRT lines, busways).
There is no operating cost recovery scenario in the world where transit service generates enough money to be able to build its own separate infrastructure, so governments will continue to have a role in building transit infrastructure (especially since the perceived political risk of blowback on road pricing is so high as to paralyze elected officials on that front). So creating a "transit infrastructure investment agency" that is separate from "transit service operating company" would be a necessary part of your strategy.
Hong Kong was often cited as a "profitable" transit agency, but that was a function of top-of-the-world population density, severely constrained road alternatives, and the transit company's function as a developer to both build apartments (demand) on their property/stations and to cross-subsidize operations from real estate profits. That particular scenario does not translate to very many other places in the world.
Nevertheless, the discussion might benefit from a comment on how "attracting maximum ridership" works in other parts of the world. In parts of Africa or Asia, for example, what is the mode split where there is essentially no public transit and a completely profit-driven free market reigns for urban transportation? And what is the operating revenue/cost ratio and subsidy situation in places like Europe and Japan where there is exemplary public transit and relatively high ridership?
You make a compelling case, and I agree that subsidizing the rider and expecting the transit agency to break even is a far better model of transit provision.
That said, I don’t think this would be viable in isolation.
First, as long as the bus is stuck on the same roads as other traffic, it cannot be faster than driving.
Second, as long as driving is intensely subsidized and full of sunk cost, driving will be/feel much cheaper for the middle class.
This leaves is where we are today, transit is not valuable to people with cars EXCEPT to get to places that are expensive to drive (which usually means either expensive to park or infeasible to park). So the only real purpose of transit is to provide some degree of mobility for people who can’t afford or can’t operate cars. That’s just not a big or rich enough market for a successful business to operate in.
If we dropped the gas tax and instead raised car tax (more fair in an era of electric cars) and adopted congestion pricing or a VMT based system, *then* I think your proposal could really work. But heavily subsidizing drivers is very popular, and efforts to make them pay what it costs to maintain the roads have largely failed politically, so I’m not very optimistic we can change this any time soon.
EDIT: I expanded these thoughts a bit to a note and re-stacked this -- I wish substack hadn't got rid of the button to both comment and re-stack at the same time! -- hope that gets more people to read your idea :)
https://substack.com/@burlesona/note/c-77900684
I quibble with "transit is not valuable to people with cars EXCEPT to get to places that are expensive to drive (which usually means either expensive to park or infeasible to park)".
If we count cost in terms not only of money, but also travel time and aggravation, transit can still win. I used to work at a downtown office a couple blocks from the main train station; I could have paid for a parking stall below the building and driven in, and that would have been slightly cost-competitive to the costs of parking at the commuter-rail station and buying a return ticket. In practice, I never did this: the aggravation and difficulty of driving in peak-hour traffic kept me firmly on the train.
In an automated-driving future, we can expect congestion to get much worse, so trips will take longer, even as some of that aggravation of driving fades. Still, on net, I think rapid transit will remain competitive. Conventional feeder buses, on the other hand., will have a tough time.
More about this in the next two entries in the series!
That's fair! I agree that it's really more like "places that are a headache to drive to" which could be because of any mix of travel time (in the situations where there's an express transit option that doesn't sit in traffic), cost, or just headache. Looking forward to your future posts!
Can we resolve the asymmetry with roads by subsidizing tickets (that is, the transit company gets x$ per rider/rider mile?) it still gets some political issues/permacrisis, but it'd be an improvement over the status quo without completely abandoning transit to unfair competition with an implicitly subsidized competitor.
(Alternatively, the japanese model of enabling cheap infrastructure loans and letting transit companies capture some of the upside from real estate near stations can be good, but it goes back to giving messier incentives).
There's a lot to this idea: a permanent or long-term subsidy of $X per rider-mile would help align incentives, and would also help prioritze system expansion. But one needs to go further: the subsidy would apply not only to the transit operator, but for every passenger-movement company: Uber, Lyft, taxi companies, bikeshare.
But it should be *paired with* a VKT and/or congestion charge for dense areas, so that each actor has roughly the same incentives.
A semi related question for you BTW - one thought I've had is that self-driving rideshare can enable transit to focus on maximizing ridership by being good at closing coverage gaps for low-traffic areas. Does this seem plausible?
Not only does it seem plausible, but valuable. I'll have a fair bit to say about this soon... keep an eye out for the last entry in this series, coming in two weeks!
The argument for bringing the revenue/cost ratio up to 1.0 (plus a certain level of profit?) is fair, but transit (public and private) suffers from uncontrollable circumstances that make it extraordinarily difficult to "compete" for ridership with the alternatives. There are two ways to level the playing field (while holding other variables such as land use, density, socioeconomic conditions, geography, etc. constant): pricing ALL urban transportation similarly (in effect, road pricing or congestion pricing); and/or spending capital ($illions, with an M or a B) on dedicated transit infrastructure to make it time-competitive in particular corridors (subways, LRT lines, busways).
There is no operating cost recovery scenario in the world where transit service generates enough money to be able to build its own separate infrastructure, so governments will continue to have a role in building transit infrastructure (especially since the perceived political risk of blowback on road pricing is so high as to paralyze elected officials on that front). So creating a "transit infrastructure investment agency" that is separate from "transit service operating company" would be a necessary part of your strategy.
Hong Kong was often cited as a "profitable" transit agency, but that was a function of top-of-the-world population density, severely constrained road alternatives, and the transit company's function as a developer to both build apartments (demand) on their property/stations and to cross-subsidize operations from real estate profits. That particular scenario does not translate to very many other places in the world.
Nevertheless, the discussion might benefit from a comment on how "attracting maximum ridership" works in other parts of the world. In parts of Africa or Asia, for example, what is the mode split where there is essentially no public transit and a completely profit-driven free market reigns for urban transportation? And what is the operating revenue/cost ratio and subsidy situation in places like Europe and Japan where there is exemplary public transit and relatively high ridership?