The RAPID Ridership skyrocketing

[GRDadof3]

RAPID bus ridership up 18.6% over this time last year

Here's a strange statement:

"Many of the things that have happened in Michigan have substantially altered the auto culture that we used to have," said Bob Foy, general manager of the Mass Transportation Authority, Genesee County's bus system. "It used to be if you rode public transit, that was a vote against your job (in the auto plant)."

[AlexPKeaton]

This makes me wish gas would hit $3.50 or $4.00. It's not that I want to pay that much, but it would make light rail a lot easier to justify.

-nb

[GRGridGirl]

Why do I love my neighbohood?

Reason #3: Four bus routes, hundred's of places to go

[joeDowntown]

I say the same thing all the time. It would be painful if we hit $5.00 a gallon but it sure would spur development of alternative fuel and mass transit. I'd be willing to take the hit for that. I'd just consider it an "environmental tax".

Joe

This makes me wish gas would hit $3.50 or $4.00. It's not that I want to pay that much, but it would make light rail a lot easier to justify.

-nb

[vexom]

yea, I think we are seeing the start of people changing there thoughts about mass transit and I don't see gas prices going down as much as they will go up in the future. The price of gas along with traffic is certainly why most European cities are so reliant on mass transit.

[MJLO]

Economically speaking, Say if ridership skyrocketed to where the bus system were at capacity. Would the increase in revenue from the heavy ridership, compensate for the higher costs of operation? I have not seen any real numbers on any of this, but I have been under the impression that public transit services run deficits. Is this true, and if it is true is there a way to fix the problem? Anyone in the know out there?

Also say that everyone were to stop driving their vehicles and start riding the bus, what would that do to the oil companies?

[GRDadof3]

Economically speaking, Say if ridership skyrocketed to where the bus system were at capacity. Would the increase in revenue from the heavy ridership, compensate for the higher costs of operation? I have not seen any real numbers on any of this, but I have been under the impression that public transit services run deficits. Is this true, and if it is true is there a way to fix the problem? Anyone in the know out there?

Also say that everyone were to stop driving their vehicles and start riding the bus, what would that do to the oil companies?

Does the State highway system produce profits? Oil companies would go the way of 8 tracks and typewriters, replaced by much more innovative technology.

[MJLO]

I guess what i'm asking dad, is if transit systems are self sustaining, or do they require additional public funds?

Because while i'm sure the highway systems don't produce profits. What about tollways? The only way to pay for the highway systems are thru taxing various things. But what about things that are not free. For instance the CTA, I use it everytime im in Chicago. But it's not self sustaining right?

[vexom]

According to this page - http://www.ridetherapid.org/Main/about/fy2005-2.htm

The cost per rider in 2005 was $2.80 but that obviously would go down if more people rode.

[torgo]

I guess what i'm asking dad, is if transit systems are self sustaining, or do they require additional public funds?

Because while i'm sure the highway systems don't produce profits. What about tollways? The only way to pay for the highway systems are thru taxing various things. But what about things that are not free. For instance the CTA, I use it everytime im in Chicago. But it's not self sustaining right?

Yah MJLO, you can't really cover all the operating expenses from the fare box, at least with buses. But, more people riding doesn't necessarily caffect operating costs that much either. If every current route is full, it costs about the same to run it all as it would if they were all empty. After a while, you would have to add more frequent routes, extra hours, etc, but those additions don't usually appear until there is a demand for it. ITP has a rather elaborate rating system that rates each route based on ridership, costs, and all that.

[RustTown]

Most all transit systems, be they roads and highways or mass transit systems, require public subsidation for operation, maintenance, and expansion.

[grcitydog]

One of the stupidest misconceptions is that people are under the impression that the roads and highways we drive on are free and that any form of mass transit is a drain on our tax money and should not be implemented unless they can find a way to "pay for themselves". I would be willing to bet that you can't find a mass transit system anywhere that can cover all of its expenses with the fare revenues, but neither is there a road or highway that can cover all of its expenses with the possible exception of some toll roads- but it would be very expensive to get anywhere if we had to pay a toll for every mile of road we drove. You can even hear this bias in the terminology: you call highway building an "infrastructure improvement", but any money put into mass transit is a "subsidy".

[GRDadof3]

One of the stupidest misconceptions is that people are under the impression that the roads and highways we drive on are free and that any form of mass transit is a drain on our tax money and should not be implemented unless they can find a way to "pay for themselves". I would be willing to bet that you can't find a mass transit system anywhere that can cover all of its expenses with the fare revenues, but neither is there a road or highway that can cover all of its expenses with the possible exception of some toll roads- but it would be very expensive to get anywhere if we had to pay a toll for every mile of road we drove. You can even hear this bias in the terminology: you call highway building an "infrastructure improvement", but any money put into mass transit is a "subsidy".

Well said grcitydog. Even States with toll roads (Indiana, Illinois and Maryland) that I can think of, ALSO collect tax dollars for their highway systems. I even read recently that many toll roads that were supposed to be at "break even" or "off the taxpayer doll" have no plans to convert to non-toll roads. The legislators of those States are now hooked on the revenue.

[BostonianinGR]

Excellent question MJLO. I can shed some light on the cost structure of public transportation (PT) (I'm an Urban/Transportation economist by training).

- The cost structure of PT's generally revolve around two issues (1) Huge fixed costs (2) Economies of Scale. Fixed costs are initial (start-up) costs that do not vary with the number of buses or trains you actually run per day. These costs are usually high for light/heavy rail (cost of rails stations, wagons, etc etc) but are much lower for buses.

Economies of Scale ( a complicated term for a simple concept...) basically means that your costs decrease as your produce more and more units of an output (in this case the output is usually measured by the number of passengers served, or trains/buses per hour). Once you have set up the light rail, secured right of way etc, these fixed costs decrease as output increases. Thus, since it beccomes cheaper to supply these services to each additional passenger, as ridership increases it becomes easier to pay back these huge initial fixed costs. (You can charge the same price, but your costs are lower when you have more and more customers hence profit margins are higher, which can be used to pay off the initial fixed costs.)

So the answer to your question depends on which of these two effects dominante. If the fixed costs are sufficiently enormous, then it is almost impossibe to pay of these huge fixed costs. The general consensus among the economic literature is that the fixed cost from light rail are too large so that the economies of scale never decrease sufficiently to the point where it is possible to pay of these huge fixed costs. Thus, government subsidies are the only way to make this possible (especially when you include depreciation of tracks, cost of replacement and maintenance of trolleys or rail cars etc.)

However, the RAPID uses buses so the fixed costs are relatively small. Hence, if ridership increases sufficiently, the economies of scale "effect" should kick-in and reduce the fixed (start up) costs to the point where it actually can become profitable. In fact, precisely because of this, many large cities are are implementing "electric buses" that run in their own specially-designated lanes (the new "Silver Line" in Boston uses this method).

So anyway that's my answer......a rather long winded one I admit, but then public transportation is my passion.......and you got me started.....

-BTW are actually several studies which examine the question you raise. Some of the them can be found at http://www.nctr.usf.edu/ (National Center for Transit Research). Their journal (I think you need a subscription to it, but if see an article you like I can get it for you) has all the studies you could want.

[Rizzo]

^In that case, do you believe the economic growth and potential profitabilty of surrounding business on or near LRT lines far outweight the initial hard/soft costs of LRT lines? I think there was a local study that put a LRT line with three times in profitability gain. A one billion dollar system would create a three billion dollar economic growth in the local economy.

[francishsu]

I am wary of these studies that quantify the economic benefit in relation to dollars spent. For example, the Federal Highway Administration says that ever dollar spent on roads results in over $5 in ecomonic benefits. These numbers are so easy to fudge and any group sponsoring a study is going to end up smelling like roses in the study.

One approach that you can take is something like what the MBTA (Massachusetts public transit) has taken, where they are allocated 20% of state sales tax revenue and assessment fees from all the local districts served. That is counted as revenue, along with the direct sources of fares, advertising etc. So if your public transit investment is going to spur economic growth, you should reap the benefits from the increased revenue from sales taxes and local assessments.