Responses to Declining Ridership, Part 1: Contracting, Independent Contractors and Brokers

Nearly 350 years ago, as his third “Law of Motion,” Sir Isaac Newton pointed out that, for every action, there is a reaction. But this principle is not restricted to physics. It is part of human nature. As we evolved as a species, then a society and then an economy, this principle has become more and more necessary. With the last four decades’ changes in the distribution of wealth, transit ridership should have increased. Instead, it has declined dramatically. The reaction to this decline has taken three basic forms: (a) an increase in private contracting (see ) , (b) the spread of the “independent contractor” model, and (c) the emergence of brokers (see, and

Enter History
These dynamics were common in the days even before COVID-19 struck — a decline affected by different dynamics in different modes:

  • The taxicab industry was gradually destroyed by the emergence of, and unfair competition with, TNCs (“transportation network companies” like Uber and Lyft) – unburdened as TNCs were by either medallion fees or traditional fringe benefits of any form (see
  • Transit ridership began declining several years before COVID-19 from a number of forces – the most obvious being a mode split to TNCs and a decline in the quality and safety of service (see
  • COVID practically eliminated non-essential travel by public transportation – destroying charter and tour services in the process (see, and cutting deeply into passenger rail, fixed route bus, subway and airline travel.
  • And, of course, none of these modes or services were helped by the gradual elimination of jobs, and the replacement of numerous operating functions formerly provided by trained management but now transferred to robots (see
  • Some of this ridership returned via corruption by AMTRAK (see Likewise, corruption by the airline industry — much of it initiated years before COVID — helped restore its ridership and profitability (see Otherwise, some of this mode split was squandered – as taxis were deployed to deliver food and medicine in the heart of the first wave of COVID-19. Other choices reflected ridership preferences – like the use of TNCs instead of taxies that, in most cases, contained Plexiglas shields separating the driver’s compartment from the passenger compartment (or in this mode, the front seat from the back seat). Some of these choices were influenced by the cell-phone-hypnotized culture of younger riders.

    Then, of course, came COVID. COVID almost destroyed the charter and tour portions of the motorcoach sector — although intercity/scheduled service is returning to near-normal levels, and tour service is slowly recovering. Social distancing combined with our failure (until COVID began to wane) to require mandatory mask usage mode split significant numbers of passengers from large, densely-packed vehicles (like buses, coaches and passenger rail cars) to smaller vehicles where passengers were largely isolated. But COVID had layers of additional impacts:

  • It triggered an explosion of migration from densely-populated urban areas (where public transportation made sense) to the suburbs and beyond. In 2021 alone – near the end of which COVID deaths began to plummet meaningfully, despite new variants emerging — 388,000 residents fled New York City alone (see As it always has, suburbanization will further erode transit efficiency: The densities needed for fixed route service to attract riders will thin out, while it is increasingly hardly and more costly to serve riders further and further spread out. At a certain point of low density (e.g., rural areas), fixed route service is completely unsustainable. Keep in mind how wasteful, costly and insufficient it is even in our most densely-packed urban areas.
  • While one might suspect traffic levels to have decreased — leaving more roadway space open, and shortening travel times for personal and public transportation vehicles alike — this did not happen (and will not happen) because of an obscure phenomenon known by planners as “latent demand.” In, simple terms, for every new spot opened on the roadway, there is another vehicle waiting to take its place.
  • For public transportation purposes, far more important than COVID itself was the shift from commuters to remote workers — although the decrease in commuters to drivers was not a one-to-one ratio. Regardless, working remotely actually proved viable for a significant subset of the population. To the dismay of public transportation, working remotely is certain to be a viable permanent arrangement for a still-significant subset of former commuters.

    Through all this, combined with inflation continuing to outstrip wage increases, public transportation will never recover to be what it once was. Even before COVID, transit ridership was failing so badly that at least one City (Kansas City) eliminated fares altogether because it cost almost as much, if not more, to collect and process them than the percentage of operating costs they covered. (Shortly after, Las Vegas eliminated weekend service, and eliminated fares for double-decker buses. And Portland came perilously close to eliminating fares.) In fact, the nation’s top-grossing transit system (in New York City) managed to cover 35 percent of its operating costs from fares. The recovery of others – pre-COVID San Francisco (with a separate transit system, A.C. Transit, serving the suburbs) was covering only 13 percent. Los Angeles was covering only nine percent. (See This dynamic raises a troubling question for public transportation: As this trend continues, and particularly if transit evolves to the point where it must be provided for free, how much longer will taxpayers support it?

    Regarding solutions other than actually improving transit service quality and efficiency — which we have proven woefully unable to do — a few Band-aids will work at the edges (like the elimination of weekend and owl service. Otherwise, once the frequency and coverage of service declines to a certain point, it becomes increasingly less attractive, and further reductions in service will translate into even lower fare recovery ratios: Each successive trip will cost the taxpayers more and more money. A cargo ship full of of Band-aids will fix nothing.

    Fast Reverse to the Past
    We would be naïve to not expect serious reactions to events and trends of such magnitude. Nor should we be surprised if and when we ever learn how we squandered the opportunity to minimize these impacts. (Much of this squandering was covered in previous National Bus Trader articles — as, for example, when in the heart of the first wave of COVID, New York City assigned most of its remaining taxicabs (about 11,000) to the delivery of food, medicine and packages — tasks which the City’s arsenal of unused trucks could have performed (see We could have banished TNC’s from the landscape. Or we could have engaged in actual planning efforts like route/schedule design and stop selection. Instead, we turned these tasks over to robots (i.e., software). With such failures, three troubling responses have emerged:

    1. The increase in private contracting.
    2. The increase in independent contractors
    3. The increase in brokers

    In Part 2 of this series, I will overview these responses. I will discuss private contracting and brokerage in considerable detail. And I will describe the extraordinary corruption and waste associated with the worst applications of them.

    Stay tuned.