Maryland has long had a state law requiring transit systems to collect enough fares to cover at least 35 percent of their operating costs. While it is admirable to set a target, this particular target is disheartening for two reasons.
First, 35 percent is a pretty low goal. The 2015 National Transit Database lists 48 transit operations that cover between 100 and 200 percent of their costs, including New York ferries, the Hampton Jitney, several other bus lines, and a bunch of van pooling systems. No rail lines cover 100 percent of their operating costs, but BART covers 80 percent, Caltrains covers 72 percent, New York and DC subways cover 64 percent, and New York commuter trains cover 60 percent. On average, commuter bus and commuter rail systems earn half their operating costs. So 35 percent lacks ambition.
Even worse, most Maryland transit operations don’t come close to meeting the target. Maryland commuter trains cover 45 percent of their costs. But Baltimore’s light rail only covers 17 percent, and its heavy rail covers a pathetic 13 percent. Standard bus service also covers just 13 percent of its costs, though commuter buses come closer to the target, reaching 28 percent.
Maryland lawmakers have figured out a solution to the second problem, if not the first. They simply passed a bill abolishing the target. Now, transit advocates hope, the state can spend even more money building obsolete transit systems that won’t be able to afford to maintain because they can’t even cover a third of their operating costs.
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Transit is “not profitable,” said one advocate, “but it’s essential for an economically competitive region.” Just how economically competitive has Baltimore been since it sunk billions of dollars into light- and heavy-rail lines that don’t cover even a fifth of their operating costs? Maryland certainly won’t make itself more economically competitive by increasing the tax burden still further so they can build more obsolete transit lines.
Failing to cover costs isn’t a symptom that you are economically competitive. It is a symptom that you’ve failed to provide things that people need and want. The Antiplanner can understand why people think we need to subsidize food stamps or other aid to low-income people. I can’t understand why people think nothing of throwing huge amounts of money towards marketable operations like transit.
C. Northcote Parkinson, the author of Parkinson’s Law, said that organizations that set goals low so they would be easy to meet were suffering from a disease he called injelititis. The transit industry has been suffering from this disease since the mid-1960s, when it discovered it could live off the public trough rather than actually have to provide services that people want. Once this disease reached its late stages, he said, the only cure required “a change of name, a change of site, and an entirely different staff.”
There’s still a chance that Maryland’s governor may veto the bill. Let’s hope he does.
Beautiful stinging rebuke! If the Chinatown buses and Megabus can operate with fares at 100+% of both operating and capital costs then… guess what…. you are not offering the people something they want. Bottom Line. Bottom Line. Bottom Line. If people wanted it, they would pay for it. It the people wanted it, there would be a free market competition for it. This is just wrong on so many levels.
As a former Baltimore resident, I can say I’ve never used the light rail or the Metro rail….they simply weren’t in the way of where we needed to be on a daily basis. My mother owned a 2.0 liter turbo 80’s mustang *shudder*, and it was our method of getting around all the time.
So true. If you’re going to run a business that costs $10,000 a day to operate, you’re going to need to find 10,000 customers who are willing to pay $1 a day for what you have to offer, or 1 customer willing to pay $10,000 a day or some other combination that results in $10,000/day in revenue. Otherwise, your business isn’t feasible.
It’s simple, yet consultant feasibility study after consultant feasibility study misses that simple fact. Instead, transit consultants define “feasibility” as finding enough subsidies to cover the certain and predictable losses.
What portion of the total cost is the operating cost? Half? On subways it must be less than half.
Yet OFP2003, roads are mostly paid for by property taxes and are not expected to be profitable to survive. The real cost of driving is some where above $2 per mile. :$
THWM,
You’re right regarding roads. I think the difference is whether the transit created is a useful part of a city’s infrastructure portfolio, or whether it is essentially civic jewelry.