How To Save American Mass Transit

As U.S. transit agencies approach a fiscal cliff due to dwindling ridership, some public transportation advocates have called for eliminating customer fares in an effort to increase ridership. At the same time, large mass transit systems are experiencing a persistent fare evasion problem that has fed broader public concern about transit crime and safety. But forgoing this source of revenue would worsen transit’s already gloomy outlook as decades of research have found that ridership is more sensitive to service quality than fare price. Instead, advocates should be more realistic about transit’s role in delivering 21st-century transportation in the U.S. and demand efficiency improvements so that transit can function well in the niche markets where it can provide the most value.

The COVID-19 pandemic caused nationwide mass transit ridership to crater by 95 percent at its worst. Congress responded by sending nearly five years’ worth of pre-pandemic federal transit funding—$69.5 billion—between March 2020 and March 2021. Unlike conventional federal transit aid, these funds were largely unrestricted and could be used by transit agencies as they saw fit. 

In contrast to transit’s fiscal bailouts, ridership recovery has been slow. December 2022 ridership remained 34 percent below December 2019 levels, according to the Federal Transit Administration’s National Transit Database, which also indicates that nationwide farebox recovery of operating costs from transit riders fell from 30 percent in 2019 to 13 percent in 2022, with taxpayer subsidies accounting for nearly all of the remaining balance. This figure does not include the capital costs to build and refurbish transit systems, where taxpayers have been responsible for virtually the entire tab since the middle of the 20th century.

Transit experts are increasingly expecting a prolonged ridership winter, with ridership forecasted to remain below 2019 levels at least through the remainder of the decade. As this reality has started to set in, some transit advocates have called for desperate measures to regain lost ridership, most notably transitioning to fare-free transit. 

Supporters of fare-free transit do have a point that ending fare collections can increase transit ridership. But it’s important to understand that not all ridership gains are created equal. Transit is often sold to the public as a solution to social costs related to the use of private automobiles, such as traffic congestion and pollution. Fare-free transit may entice those who were already dependent on transit, as well as people who would have otherwise walked or biked. But it likely won’t draw many new riders who can drive their own cars. This means that while fare-free transit can provide private benefits for riders, it is unlikely to meaningfully increase the social benefits often touted by transit advocates to justify additional government subsidies.

This proposed move to fare-free transit has also been justified on progressive social justice grounds, with some advocates arguing that transit service should be treated as a commons and that fare enforcement unfairly targets individuals living on the margins of society. Critics counter that fares are already low and heavily subsidized and that fare enforcement can be used to stop people from entering transit systems who then commit crimes.

In the real world of scarcity and tradeoffs, eliminating fares may also starve agencies of revenue th