With declining ridership, growing costs, and increasing competition, the nation’s transit industry is on the verge of complete collapse. The trends leading to this collapse appear to be permanent, yet transit officials across the country are pretending they are only temporary. Instead of preparing for the collapse, they are simply seeking more subsidies.
The Antiplanner has witnessed in the collapse of an industry before, and the results are not pretty. I spent the first two decades of my career fighting money-losing timber sales on federal forests. Between 1990 and 2000, those sales declined by 85 percent, turning communities built around sawmills that purchased federal timber into near-ghost towns.
Some communities could see the handwriting on the wall and made the transition to a recreation economy. Bend, Oregon, near where the Antiplanner currently lives, is thriving as a resort and recreation town, with one of the fastest-growing populations in the country. Coos Bay, Oregon, near where the Antiplanner used to live, turned up its nose at the recreation economy, saying its high-paid union millworkers would not be satisfied flipping burgers and changing bed sheets. The area is currently depressed and–despite outstanding beauty and recreation opportunities–its population is stagnant.
Like timber communities, transit cities have the choice of preparing for or denying the impending collapse. Those that prepare for it will enable a smoother transition to future transportation systems while those that deny it will create huge problems for local taxpayers.
The Sacramento Bee recently observed that Sacramento transit ridership has fallen a shocking 30 percent since 2010. That isn’t the only agency to see catastrophic declines in ridership: the city of Phoenix lost 34 percent of its riders since 2009; San Antonio’s VIA lost 26 percent since 2012; Cincinnati’s Metro lost 34 percent since 2009; and Memphis’s MATA lost 35 percent since 2009. Major transit agencies in Los Angeles, Chicago, Miami, Atlanta, DC, St. Louis, Cleveland, Orlando, Indianapolis, Milwaukee, Austin, Norfolk-Virginia Beach, and Charlotte have all suffered double-digit declines since their post-financial-crisis peaks.*
In the past, transit agencies could count on periodic energy crises to boost both ridership and political support for continued subsidies. Oil prices were once at the mercy of the OPEC oil cartel, and a small Mideast war could send gas prices shooting up to $4 a gallon. But fracking has made the U.S. the master of its own destiny when it comes to energy prices. While the country isn’t energy-independent, it can limit price fluctuations by increasing its own production at will. Thus, transit can no longer expect a rescue from high oil prices, at least for the next decade or so.
Instead, transit is facing growing competition from ride-hailing companies such as Uber and Lyft. Right now, that competition is eating away at transit’s high-end riders, but when driverless cars are perfected it will take away middle-end and eventually low-end riders.
At the same time, the industry has been quietly ignoring two major costs: maintenance and employee benefits. The industry is known to have a $90 billion maintenance backlog and the DC subway is only one of many systems that routinely break down. Meanwhile, to keep unions happy, most major transit agencies have incurred huge unfunded retirement and health-care obligations.
Even New York City transit is having problems, suffering a decline in ridership last year combined with growing maintenance failures. One politician’s solution is a “millionaire’s tax,” that is, a “three-year surcharge on personal income tax for city residents making more than $1 million.” This is supposed to be just temporary because the problems are going to go away after three years, right? Wrong. They will never go away.
Unfortunately, most political leaders and transportation experts can’t imagine cities without public transit. “Transit is under great risk of shrinking,” warns UC Davis Institute of Transportation Studies director Dan Sperling. “That is not in anyone’s interest.” Actually, it is very much in taxpayers’ interests, as they have been paying through the nose to prop up a declining industry for close to (and in some places more than) five decades.
New York is the only American city that I can’t imagine without transit. Every other city can get along just fine without public transit with only minor adjustments that can be phased in as transit is phased out. Whether that transition is smooth or bumpy depends on whether regional planners accept that transit is disappearing or attempt to resist the change by throwing more of other people’s money at it.
* I calculated these by applying the percentage change in APTA’s 2016 ridership report to 2015 data from the National Transit Database. Since APTA’s ridership report is based on the calendar year and the Transit Database is based on the fiscal year, the final numbers may be slightly different.