How Bad Is “That Bad”?

The transit industry loses $50 billion a year. It’s customer base is dwindling. Business in many regions has declined by 20 to 40 percent. Yet Bloomberg, one of the nation’s leading business publications, says, “The outlook for public transit isn’t all that bad.”

Sheesh. Just how bad does it have to be to be “that bad”?

According to Bloomfield columnist Noah Smith, light-rail and commuter-rail ridership “are at all-time highs,” by which he means highs for 1990 to 2017, the time period used in his charts. In fact, his chart doesn’t show it, but according to the source of data in his chart (American Public Transportation Association (APTA) ridership reports), both light rail and commuter rail declined in 2017 and light rail (which APTA equates with streetcars) was much higher before 1955 than it is today.

It is true that both light- and commuter-rail ridership in 2017 were higher than 2014, a time period during which, Smith claims, heavy rail was “down only slightly.” But his charts use different scales, disguising the fact that heavy rail lost almost nine times as many riders during that period as were gained by light and commuter rail together. Moreover, commuter rail grew mainly because a new line opened in Denver while light rail grew because of new lines in Los Angeles and Seattle, and the growth in Denver and Los Angeles was offset by declining bus ridership in those cities. Between 2014 and 2017, buses nationwide lost 35 riders for every one gained by light and commuter rail.

Based on his charts, Smith concludes that “the decline in U.S. transit comes almost entirely from buses.” That’s true if 80 percent is “almost entirely” — my definition of “almost entirely” is somewhat greater, but that’s semantics. The real point is that buses are the backbone of the industry, providing 100 percent of transit ridership in most regions and, until the recent decline, more than 50 percent nationwide, so a loss in bus ridership can’t be dismissed as irrelevant.

Smith’s presumption is that bus and rail ridership aren’t connected. In fact, one of the reasons bus ridership is plummeting is that too many cities have bet on trains and cut bus service to pay for construction cost overruns, the high costs of rail maintenance, and debt service on rail bonds.

Here are some hard facts. According to data just released by the Federal Transit Administration, nationwide transit ridership in the first two months of 2018 was 2.2 percent less than the same two months of 2017. In turn, 2017 ridership was 4.9 percent less than 2016 and 11.5 percent less than 2014. Nearly all forms of transit, including buses, heavy rail, light rail, commuter rail, and streetcars, are declining.

If an 11.5 percent nationwide loss since 2014 doesn’t sound “that bad,” how about a 31 percent loss in Cleveland? Or 20 to 26 percent losses in Charlotte, Columbus, Miami-Ft. Lauderdale, St. Louis, Tampa-St. Petersburg, Virginia Beach-Norfolk, and Washington DC? Or 15 to 20 percent losses in Atlanta, Boston, Dallas-Fort Worth, Los Angeles, and Philadelphia, among many other regions? Since 2010, Memphis is down 40 percent!

These regions are all very different — some large, some small; some growing rapidly, some slowly; some with trains, some with only buses — but the trend everywhere except Seattle is down. And Seattle’s upward trend may have more to do with the confluence of Millennials, university students, and Pacific Northwest weirdness than the kind of transit Seattle is offering, so should not be construed as an example for other cities to follow.

Based on Smith’s erroneous claim that rail ridership isn’t declining or declining only “slightly,” he concludes that “trains will still be a good bet.” He has a caveat: trains will be a good bet if cities “decide to build dense, New York-style cores” — as if cities can snap their figurative fingers and turn into Manhattan.

I shudder to think what kind of advice he might have offered investors in the past. Do you think he would have said, “Despite the iPhone, Blackberry will still be a good bet”? How about, “Despite Amazon, K-Mart will still be a good bet”? Or “Despite Netflix, Blockbuster will still be a good bet”? Or, most likely, “Despite the horseless carriage, buggy whips will still be a good bet.”

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5 thoughts on “How Bad Is “That Bad”?

  1. C. P. Zilliacus

    If there is a true desire to have transit patronage levels similar to what is found in places like Japan and most of Europe, then motor fuel prices will need to rise enormously, which implies a large increase in the federal motor fuel tax (by raising it by 5 to 10 times higher than it is now).

    That is unlikely in the United States – no matter who is in charge in Washington, D.C.

    So claims of future increases in transit patronage in most of the nation should be regarded with a strong dose of skepticism.

    I think it also important to mention “peak oil,” which was supposed to lead to a huge increase in transit patronage at some unspecified time in the future but seems to have been forgotten by persons and groups that normally tout transit as an alternative to the private automobile.

  2. Builder

    I don’t pretend to have studied transit in Seattle but my son lives there so I have a passing knowledge of the place. I tend to attribute the transit increase there to Amazon. Amazon has added a tremendous number of jobs to downtown Seattle in the last few years. It only make sense that this concentration of jobs has induced more people to take the bus.

  3. aloysius9999

    “If there is a true desire to have transit patronage levels” in urban areas with public transit, they have to fund it themselves out of their pockets not mine.

    Rural USA where public transportation is almost nonexistent, isn’t going to pay high gas taxes just so some urban dweller can ride a cheap trolly to get their morning Starbucks.

  4. LazyReader

    The way I see it, the transit agencies have two babies to nurse.
    One is the systems themselves whose maintenance and upkeep have been neglected, only fixed on an ad hoc basis with occasional swings whenever there’s a surge in transit riders or price hikes.
    The other is the obligations these agencies have essentially sworn to finance the cradle to grave public benefits and pension obligations for life. That system has been politically ingrained for decades.

    The public employee protests in Wisconsin against governor Scott Walker are living proof of how inflexible public unions are when it comes to the fiscal ups and downs. Regardless of receipts, regardless of tax rates, revenues, they’ll seldom accept any attempt that would curtail their allowance. Say the government passes a 500 million dollar raise to support their government workers. That’s a lot of cash but since the total cost is spread among so many taxpayers they only see a 5 cent tax increase, a
    nickel. The taxpayer gets dinged for five mesely cents, really has no incentive to be outside all day protesting it. Would you spend all day protesting yelling at the top of your lungs over a nickel a year? That’s why government always grows bigger, whenever there’s a proposal that boosts spending, the group that stands to benefit FIGHTS for it, meanwhile the taxpayer shrugs the extra nickel.

  5. MJ

    He has a caveat: trains will be a good bet if cities “decide to build dense, New York-style cores” — as if cities can snap their figurative fingers and turn into Manhattan.

    That’s kind of a big caveat, don’t you think? There aren’t any more Manhattans being built in the US, and for obvious reasons: the economic and technological conditions that produced Manhattan at the time don’t currently exist and cannot be replicated. The best bet for transit in US cities is to hope for another Seattle (again, difficult to replicate due to unusual physical geography and high growth rates) or perhaps Las Vegas, which has had fairly strong ridership growth despite the proliferation of non-ideal urban form from the perspective of the planning community.

    Also, we’re obliged to look at where and how transit (rail, specifically) is in fact being added. At the margin, most of the additions are coming from places like Nashville, Austin, Dallas, Orlando, Phoenix, Minneapolis, and some West Coast cities. That’s what we’re getting, and the results in most of those places have not been promising. It’s time for Mr. Smith to engage in a bit of Realpolitik

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