Throwing Good Money After Bad

Randal O'Toole, Senior Fellow with the CATO Institute, submitted this Op-Ed weeks ago to the Tampa Bay Times who refused to print it. We are printing it with his permission.

Randal O'Toole
CATO Institute

Tampa Bay transit ridership has declined 9 percent in the last year and 20 percent in the last four years. This mirrors a nationwide transit decline that is taking place in almost every major urban area and calls into question the tens of billions of dollars in subsidies taxpayers spend on transit each year.

Thanks to those subsidies, transit has become one of the nation’s most expensive forms of travel: where Americans spend about 25 cents a passenger mile driving their cars, and highway subsidies add another 2 cents, Tampa Bay transit agencies spend $1.05 moving one passenger one mile. 

Subsidies covering more than 80 percent of the cost of transit make transit fares competitive with the cost of driving. But transit can't compete with the speed and door-to-door convenience of automobiles. Research reveals that the average Tampa Bay resident can reach more jobs in a 10-minute auto drive than a 60-minute transit trip.

Transit advocates argue that subsidies to transit are needed to provide mobility to low-income people. But today nearly everyone has a car. The latest census data show that fewer than 3 percent of Tampa Bay workers live in households with no cars. Only 22 percent of them take transit to work, showing that transit doesn't even work for most people who don't have cars.

As low-income people acquire cars, transit has become a toy for the wealthy. Census data reveal that, while the number of low-income transit commuters is declining, the fastest growing segment of transit commuters is among people who earn more than $75,000 a year. Both the median and average incomes of transit commuters are greater than the national median/average. Why are we subsidizing transportation for high-income people?

Another myth is that transit is a greener form of travel than driving. In fact, Tampa Bay transit uses almost twice as much energy and emits twice as much greenhouse gases, per passenger mile, as the average automobile. 

In 2017, the average Tampa Bay transit bus, which is capable of carrying more than 40 passengers, had less than 5 people on board. This explains why, if you drive alone in your SUV, you are using less energy and producing less pollution per passenger mile than Tampa Bay transit.

Other urban areas have attempted to restore ridership by pumping more tax dollars into transit yet have nevertheless seen ridership decline. For example, Phoenix increased service (measured in transit vehicle miles) by 11 percent in the last fiscal year (July through June) but ridership fell by 6 percent; Austin increased service by 7 percent but ridership fell by 4 percent; and Indianapolis increased service by 4 percent but ridership fell by 4 percent.

This is just a continuation of long-term trends. In the last 50 years, around $1.5 trillion (adjusting for inflation) of your tax dollars have been shoveled into the transit industry, yet the number of transit trips taken by the average urban resident has fallen from 57 in 1967 to 38 in 2017.

Transit didn't work well several years ago thanks to the low cost, faster speed, and greater convenience of driving. The growth of ride-hailing services such as Uber and Lyft combined with stable gasoline prices mean that it is even less competitive today. These things aren't going to change, which means transit is only going to decline still further in the future.

In fact, the next transportation revolution will not be light rail or bus-rapid transit but autonomous cars. Waymo, General Motors, Ford, and numerous other companies are racing to flood the nation’s cities with autonomous cars in ride-hailing service in the next few years. This will take even more riders from transit and, in many areas, will replace transit entirely.

That means this is the wrong time to think about spending even more money on transit, as the All for Transportation plan proposes. New infrastructure such as dedicated bus lanes or light rail would be especially wasteful. Increased subsidies to transit will just be throwing good money after bad.

Randal O’Toole (rot@cato.org) is a senior fellow with the Cato Institute and author of Romance of the Rails: Why the Passenger Trains We Love Are Not the Transportation We Need.