For those motorcoach owner-readers narrowly concerned about their businesses’ futures, they might note that Coach USA, the nation’s second-largest motorcoach company, recently filed for bankruptcy. Never mind that hints of this catastrophe were littering the transportation landscape as this latest victim’s motorcoach business had been thinning steadily as Coach USA increasingly scraped by as a contractor to transit systems – scenarios where their drivers’ salaries were far less than they were (in constant-dollar terms) than in the heyday of U.S. motorcoach service (whenever that was). That their salaries as drivers of transit contractors were substantially lower than those of all or most of their transit agencies’ own drivers is just a footnote. If this snapshot fails to sober you up, what follows should jolt you out of your seat.
Fixed route transit service is not exactly doing well, either, despite enormous subsidies, none of which are provided to motorcoach operators (other than, technically, that small part of a transit agency’s subsidies that one might proportionally attribute to the operation of their far-less-costly contractors’ service). This apportionment does not count the vehicles or other capital items: Almost universally, transit agencies receive 80 percent of their vehicles’ costs from the Federal Transit Administration, and when contracting out service deploying these vehicles, they simply lease them to the contractors for, most often, $1/year. (The contractors usually perform the maintenance, including or excluding spare parts, but are paid for these things.)
But these factors are barely even the context for this collapse.
The Second Time Around
This is not just the title of a jazz standard crooned famously by Nancy Wilson and covered by countless other vocalists. It is the story of public transit in the United States – the “car country.” While I have written about this critical period of transit’s history often, some younger National Bus Trader readers, and older sporadic readers, may need to recall that the U.S. transit system almost collapsed in the late 1950s and early 1960s, as those systems that continued to operate often did so with a thinner and thinner skeleton of routes. As city dwellers began to disperse to tens of millions of homes in the suburbs – a move made possible by President Eisenhower’s construction of the first 49,500 miles of the planned 50,000-mile “Defense Highway” (part of an Act signed into law in 1956) – our urban densities began to thin out, and affordable fares began to cover fixed route operating costs less and less.
President Johnson addressed this problem, alongside other aspects of what was commonly referred to as “urban decay,” with the Model Cities Program, a huge core program within the Department of Housing and Urban Development. A component of the Model Cities Program that began the rescue of transit included the Urban Mass Transportation Administration (UMTA) – later renamed the Federal Transit Administration – which paid for 80 percent of a transit system’s (or municipality’s) buses. Three years later, with the formation of the U.S. Department of Transportation, Johnson quickly moved UMTA into USDOT. Alongside it, UMTA began providing operating assistance to these same transit agencies and municipalities, at “discretionary levels,” where most of the funding was provided by states, cities and or counties.
With transit not exactly a poster child for efficiency, within a single decade, fares covered only 50 percent of transit systems’ operating costs, nationwide — a smaller share than UMTA’s contribution of operating subsidies. An often poorly-understood concept known as “demand elasticity” effectively meant that one could not simply make up the difference by raising fares: Higher fares translated into lower ridership, and lower ridership translated into even less farebox revenue. Likely vying for the Low Innovation Award of the Twentieth Century, transit was mired in this downward spiral ever since, despite higher and higher subsidies from cities, counties, states and the Federal government, along with higher fares (which likely contributed, periodically, to lower ridership, and even less operating revenue).
By 2022, farebox revenue covered a lower percentage of the operating costs of almost any service that was not completely free that comes to mind. By 2018, the start of two years when transit ridership declined by roughly 10 percent nationwide – before being decimated by COVID – the nation’s transit system with the highest “operating ratio” was New York City – with fares topping out then, or perhaps a few years earlier, at 35 percent of operating costs. Other systems did far worse: Following the construction of a hopelessly-unneeded subway system whose first three lines put Los Angeles County $7 billion in debt decades earlier, by 2018, the County’s fares covered only nine percent of its total transit system’s operating costs (see NY Times – Transit Battered by Coronavirus . And then, of course, came COVID. For perspective, operating ratios for transit (bus and subway) in Japan are 160 percent. In Turkey, they are 90 percent.
Before COVID, Kansas City’s fares dipped below eight percent, and according to some accounts, failed to cover the cost of collecting and processing them. In response, the City eliminated bus fares altogether – while a few other systems (e.g., Las Vegas) eliminated fares for certain types of lines or vehicles (in that case, double decker buses). Needless to say, fixed route transit is near collapse yet again, despite cost-saving measures like contracting out service – cost savings brought about effectively by paying contractors’ drivers significantly lower salaries (and possibly in a few cases eliminating all or most fringe benefits) which will certainly occur when these agencies next engage transportation network companies (TNCs) to provide their service, as school systems in San Francisco and Los Angeles did roughly two years ago.
Narrowly Spread Delusion, Deception and Hypocrisy
Named the APTA 2016 TRANSform Conference and Expo, the American Public Transit Association (APTA) held is annual conference, in 2016, in New York City. Then still a City resident, I attended a meeting of the Access Committee, APTA’s paratransit and ADA-oriented Committee of roughly 300 members. Briefly wandering the hallways on my way in and out of the building, I was dumbfounded by the emphasis and braggadocio of technology as a solution for the industry’s resurrection – a term no one in the industry employed, and which I cite only for purposes of sarcasm. High among the technologies were “innovations” for fare collection. I wrote an installment about the embarrassing, if not ludicrous, history of fare collection approaches and technology for National Bus Trader in June, 2020 (see Fare Collection Folly Waste and Stupidity). It took considerable restraint to limit the mockery.
In the loose historical panorama of fare collection approaches and technology I cited was my observation of riding transit to and from my first and only semester of law school in 1969 Washington, D.C., and being mesmerized by the number of passengers who threw nickels and pennies into the farebox – observable to drivers, none of whom I saw once protested during the entire semester of two-way trips (see Drivers V Robots – Part 8). I followed up that installment with a more recent piece about the near irrelevancy of fares in an article this past June (see Fare Collection and Folly Waste Stupidity). On the theme of fare skimming, the latter piece was premature. A few months ago, The New Yorker (May 28, 2024) ran a major story centering on the fact that FORTY EIGHT percent of bus riders do not pay the fares. Thus, at its best – pre-2018 levels – fares would cover less than 18 percent of operating costs.
Gluing together these observations and statistics a half-century apart, it is ironic that, prior to 2018, the nation’s second highest fare collection ratio was in the District of Columbia, with fares covering 25 percent of operating costs. Even forgetting about my undocumented observations about the District’s fare evasion woes 55 years ago, New York’s experiences would seem to suggest that the District’s operating ratio would now likely lie well below 15 percent. In fact, earlier this year, the District’s City Council voted unanimously to eliminate fares altogether beginning in July of 2024 – although this never happened.
Given similar behavior nationwide – not likely, but as a mathematical postulate – one can only guess how much longer fixed route transit will survive in various parts of the country. At the extremes, even if fares are eliminated entirely, I can envision a few cities whose urban form and other formats might allow them to retain some, or even most, of their transit. The characteristics of these cities would seem to include:
- Major cities with insufferable traffic and, without transit, unbearable air quality
- Relatively-small cities with small downtown areas and limited suburban corridors into them – where natural ridership patterns would require only a small fleet traveling along the few heavily-used corridors
- Rich cities whose concentrations centered on limited corridors (e.g., San Francisco) needed and desired by both rich residents and commuters and their non-rich counterparts who could not afford housing in the City, and needed to commute long distances
- Tiny cities requiring only a line or two (picture Atlanta, whose two crisscrossing subway lines were covered by buses)
I am sure there are cities with other configurations where some degree of conventional fixed route service might be marginally sustainable, both financially and politically – particularly where honesty levels and/or income levels led to tolerable fare evasion and/or affordable enforcement costs for containing it. Otherwise, “fuhget aboudit:”
- Forget about a city curtailing those hours its subway systems should be replaced by “shadowline” bus service operating the same routes, or completing the outer segments of the lines during periods of low demand.
- Forget about exotic frequency-and-coverage innovations like “timed-transfer pulse systems” like Los Angeles County’s Carson Circuit Transit System (see Map Schedule Design).
- Forget about any sense of fiscal accountability in the decision to retain or curtail service: One line I know of in New Jersey provides fewer than one passenger trip per hour – the same service would likely cost a fifth to a tenth as much if provided by taxis, not to mention the elimination of wait time and the better directness of routing.
Enforcement and Impunity
Regarding the fare evasion component of the problem – whereby half of the achievable fares collected could be obtained through a combination of law enforcement officials supported by low technology (i.e., video cameras), such solutions would likely work in those few small or medium-sized cities where vehicles were not packed with too many individuals wearing masks or hoodies to defy identification. Thinking about such solutions in venues like New York City, it could not build enough jails to house the passengers caught cheating by tens of thousands of police officers whose time would cost more than all but the heaviest fines levied on the perpetrators – and then only effective if combined with reasonable jail time. Such solutions would seem almost inconceivable – and were barely discussed in The New Yorker article that inspired this piece.
In contrast, other nations have no remote problem this severe. In one Scandinavian country noted for its paucity of fare evasion — only 1.5 percent (barely worth bothering with as an enforcement matter, as many of these “deviants” are largely among that nation’s most dirt-poor) — this issue would barely qualify as a problem. I can also picture it not being a problem in nations where the punishment would seem to grossly outweigh the crime – like some Middle Eastern countries where pickpockets have their hands severed.
But in a polarized country like ours, the extremes of opinions about solutions (gratefully local solutions) would range from oppressive to “woke.” In some areas, one could also expect punishment to depend on other factors, like race – where punishment has become far more equitable in major crimes, but less so as they diminish in severity (like the use of certain controlled substances, or the complete tolerance of shoplifting goods whose combined value was less than $250.00). Such variables place limits on the ability to discuss solutions on a national scale – even while problems like fare evasion are likely problematic in a broad spectrum of urban, suburban and perhaps even rural communities – the latter partly or largely because the perpetrators would be far easier to catch, and thus, less punishments would serve as greater deterrents.
During Japan’s rare bus strikes, the drivers continue to run the routes; they simply refuse to collect the fares (which, again, cover 160 percent of the systems’ operating costs). And following major events in large venues, like the Olympics, the fans clean the stadiums. One would expect fare evasion to be a miniscule problem in such a society – just as it is also not a significant problem in Scandinavia, as noted. But fare evasion in a country where fully paid fares cover only a small fraction of operating costs; fare evasion is simply another tentacle of the pending collapse of fixed route transit. Forget about what this reality says about the future of public transportation in the United States. What does it say about the future of the United States in general?
