Thursday, August 13, 2009

Cash for Buses?

In an Op-Ed in our local paper, Linda Campbell offers suggestions to attract more riders to the Fort Worth bus system (the "T"), including:

Run buses more often, to more places.

Yes, it’s expensive, but how else to convince potential riders that buses can accommodate their transportation needs? Besides my regular route from south of TCU to downtown, I’ve taken buses all over town and gone as far as possible on the system to points south, southwest, northeast and west.

My alternative is to scrap the whole system and use the money to buy all regular riders new cars. Potential riders need no convincing that cars can "accommodate their transportation needs." A tad expensive you say? Well let's see.

According to the National Transit Database, the T has operating expenses of $51 million and collects fares totaling $6 million on 7.6 million "trips." Local and Federal tax revenues subsidize the T's operating costs to the tune of $41 million (and capital costs an additional $22 million). That is, on average riders pay 12% ($0.78 per trip) and subsidies to pay 80% ($6.74 per trip) of operating costs. (The difference is made up by "Other Funds.")

Suppose regular riders take the bus to and from work 250 days a year. This means they are subsidized $3,370 per year (500*$6.74) or nearly $17,000 over five years, a conservative estimate of the life of a car. If we include subsidies to capital costs, this comes to $21,000. Using this money to buy each rider, say, a Smartcar would actually both save money and improve the mobility of these erstwhile bus riders. I know this could never be implemented, but it helps to put into perspective the costs, both to tax payers and to riders, of public transit in a medium sized city.

My fair city, Arlington, has the notoriety (honor?) of being the largest in the US without public transit. City officials keep placing a public transit measure on the ballot. And the good citizens of Arlington keep voting them down. I have new found respect for the intelligence of Arlingtonians.

4 comments:

  1. Quite a few users of public transit are physically or mentally incapable of driving. How would an automobile help those people?

    I do agree that the cost of the Fort Worth system is high. It sounds like they are still on the left side of the u-shaped cost curve. More riders per bus route would probably mean lower overall cost per-trip.

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  2. Even my beloved but tightfisted Arlington, without public transit for the general public, still provides "Handitrans" for the disabled. Even here though, I wonder if reimbursing taxis for this service for the disabled might be cheaper.

    Misterbrister's main points are confirmed. A quick literature search on public transit cost function estimates reveals that, in general, average costs decline and decline fast. Also, a glance at the average cost data at the National Transit Database indicates that many cities' fare revenue recovers as much as one-third to one-half of operating costs and not Fort Worth's paltry one-eight. I would still claim, however, that public transit's U shaped average cost curve is often completely above the demand curve.

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  3. To steal from some environmental economics literature, what about the contingent valuation people might place on the "opportunity" to ride or the knowledge that their fair city has a public transit system with pretty trains?

    Of course, as former Arlington resident, I voted against the transit taxes in 2002. The idea of pretty trains wasn't enough for me.

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  4. The problem is measuring just how big this contingent valuation is. What is the "marginal contingent valuation" of *my* city having pretty trains beyond knowing that pretty trains exist elsewhere (The Simithsonian American History Museum has a wonderful exhibit)? What is the "marginal contingent valuation" of a possible future public transport ride over using taxicabs?

    I will acknowledge that contingent valuation has merit in principle, just as studying Keynsian fiscal policy has merit in principle. In practice, however, both are abused so much by politicians to justify their preferred policy that I suspect they both have done more harm than good.

    For example, I suspect the contingent valuations of ANWR claimed by Texans' in the oil patch would depend more on whether they produce oil (e.g., competitors) or supply oil services (e.g., complements) than on their love of a pristine Alaskan wilderness. Likewise, other than a small one under Clinton, we have never had the Keynsian budget *surpluses* indicated by that model.

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