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.
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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.
Millionaires tax?
I have a better and more fair idea: a tax on land owners in the downtowns served by transit.
thanks
JK
“Rail Transit Decommissioning Studies” the next wave of planning reports?
I second everything the anti-planner says in this post but I think that he places too much stock in driverless vehicles. Driverless vehicles will certainly provide a great improvement in productivity for those who choose to own them. But as far as out-competing transit agencies it will be ride-sharing services whether with driver or without that will be the true game changer. Lyft Shuttle and its follow-ons will very likely destroy public transit as we know it in the next 36 months.
Eh, seems like wishful thinking. Government and entrenched interests are far too invested in transit for it to bubble and crash. Timber sales crashed in part because of the new push of environmentalists. Not sure what similar phenomenon would happen for transit.
Every city, county, state looks to a “millionaire tax” or as some call it a “predominantly high income” or “Upper echelon” tax increase to rescue themselves out of the fiscal grave they dug for themselves. New York state tried it to raise six billion for it’s budget deficit, instead it only got a third of that and compelled the states richest residents such as billionaire Tom Golisano to move both himself and his company to Florida. More so they don’t even need a special tax like that, they can accumulate it via other sources. Say the government passes a small 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 get’s 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 benefits fight for it, meanwhile the taxpayer shrugs the extra nickel…….but those nickels add up. And this explains California’s last decade, a cycle of taxation, spending, taxation, demanding we tighten our belts while their spending splurges. It offers a coming attraction of the future of the US as a whole.
“It’s impossible to negotiate with the government” No, that quote isn’t attributed to any famous conservative like Newt Gingrich or Ronald Reagan, those were the words of George Meany in 1955, the former president of the AFL-CIO, one of the nations largest labor unions. A man famous enough it warranted being on the Simpsons. https://www.youtube.com/watch?v=bd8vNJoVwf8
While the founders of the labor movement viewed unions as a means to get workers more of the profits they help create, the government on the other hand their workers however don’t generate profit. They merely negotiate for more of your tax money. When they “strike” they strike against the taxpayers they’re meant to serve. Franklin Roosevelt considered this unthinkable and intolerable. It also means voters get no final say on public policy anymore. Instead whom they elect, must negotiate with unions. Meany was not alone, up thru the 50s unions agreed….that collective bargaining had no place in government, but starting in Wisconsin in 1959, states began to allow it. Back then it used to be “You go work for the government” the pay sucks but there are perks, you cant get fired and the benefits are generous. Now when you include salary and pension obligations they make 2-3 times the nations median income. The influx of dues and members hanged the tune about unions in the public sector and they spread and encompassed the nations major public roles, teachers, transit, etc. Ultimately no mayor or governor has any real power to stop them, the contract is signed almost immediately upon introduction into office it’s that or risk pissing off the states most powerful political donors. The writings on the wall and we foresaw the effects of a heavy handed government public sector and it’s lack of finances to pay for a growing pool of retiring government workers who still think they can collect six figures from age 50 onward. And the executive branch that signs off on this has no real concern cause they’ll be out of office by the time contracts are up for renegotiation or worse when the liability becomes a burden. Look no further than the little town of Prichard, Alabama a city famous when it’s entire public pension plan went up in smoke. In 2003, the city hired an actuary to analyze and summarize their employees’ pension plan. He warned the city that at the current rate of government expenditure the plan would run out of money by the 2009. Right on schedule in 2009, the town went broke. So the town simply declared bankruptcy and stopped sending pension checks. That was just one little town…..imagine a major city like Los Angeles or New York. Imagine a state. Only government could somehow hire a massive workforce, impose a specific value on it despite not producing any GDP to speak of and demand that you the taxpayer would have to pay to give these people basically six figure salaries for decades to come all the while having to take care of yourself.
It will be so nice when Uber finally shuts down when its venture capital runs out, probably in another 3 years or so, assuming the VC firms behind it don’t pull the plug on its hopeless business model sooner. And getting ride of Kalanick is a good start.
Ditto for the self-driving car delusion. I suppose this will go on for a few years longer than Uber, but not much longer, but enough material until The Antiplanner retires. http://www.talkmarkets.com/content/top-ten-reasons-self-driving-cars-are-useless?post=131571.
And this article is modest in what it saying compared to Our Robots, Ourselves by David Mindell, someone who has decades of experience with automated vehicles. Never mind the morons who believe in robocars with religious fervor who won’t believe a robotics expert like Mindell, or understand what happens to transit ridership when you cut service and raise fares, which happened in all the places cited by The Antiplanner and many more.
Four words: automated fixed route transit.
I used to tease the bus drivers where I worked from 1985-2005 about automated buses, particularly when one was grumpy. Quite surprised that automated buses are now in beta testing in various places, and likely to be generally available to the industry within a few years, while full-on level 4 and level 5 robocars will never materialize. For one thing, a set route is a simple problem compared to what a full robocar would theoretically have to deal with.
msetty,
living on your sister’s Napa Valley ranch while not taking transit anywhere must really put you in tune with the future of transit and driverless cars. I wish I had such insights!
”
. 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.
” ~anti-planner
We’re really in the middle of Fracking 2.0 right now. This is a much improved version of fracking over what we had just 5 years ago. 10 – 15 wells can be drilled from the same pad, the fracking fluid is exclusively made with ingredients approved for human food use by the FDA ( aka darn tootin safe ), the newly drilled wells strike oil thanks to 4D seismic & other technologies ( no more wild catting Vegas style rolls of the dice ), and can be up and running in a matter of months. In some fields per barrell break even costs are already below $30. Production in the US can quickly and _naturally_ rise if and when prices rise and can do so relatively quickly. Fracking 2.0 has turned mining oil into a manufacturing process.
The cherry on top is that North America is already energy independent. What we still do import from OPEC countries will likely drop by 25 – 40% when Keystone XL is completed. While it won’t be utopia, we can already see the effects of this today. Venezuelan production is collapsing. In previous decades this would’ve likely caused a spike in US oil prices. Yet we’re at a 10 month low with prices closing at under $43 / barrel.
BTW, Venezuelan production is already down 20 – 30 % from 2 years ago with some analysts predicting it will drop that much again in 2017.
@msetty, I agree that the automation will occur in buses already. But they’re not seperated from traffic as these on trial in Helsinki, https://www.theguardian.com/technology/2016/aug/18/self-driving-buses-helsinki. The routing is the _easy_ part to solve. Dealing with other traffic, cyclists, dogs, pedestrians and other hazards is the hard part. If they’ve mostly solved that problem for buses, they’ve essentially solved it for cars. The trick would be bringing the cost of the system down to make it practical for cars.
MSetty,
The “self-driving car delusion”? If so, it has deluded a lot of wealthy people. Many of the world’s largest and best-capitalized companies from four different industries (auto manufacturing, auto parts, software, transportation services) are racing to be the first to solve all of the problems in the document you cite, and I suspect many of them have already been solved. The winners will reap hundreds of billions, so the pressure is on and failure is not an option.
Plus, the oldest baby boomers aren’t yet at the age that they want to or have to give up driving. That won’t happen for another 8-10 years. Few boomers will voluntarily give up their comfortable and spacious suburban but at the same time they’ll demand to be independent and won’t be content to rely on relatives or local bus service, even in the unlikely event that bus service is available within the block or two that they’d be comfortable walking.
They’ll demand AVs. And baby boomers always get what they want. It’s inevitable.
I too am doubtful that self-driving cars will take over more than half the driving in the next several decades. People prefer their own vehicles for so many reasons, especially because they store stuff in the car they want available.
But I can see self-driving cars replacing most transit and taxi trips, and perhaps doubling or tripling the number of those rides because of its greater convenience. Almost always people foresee vast changes from technology that never come close to that prediction, and ALWAYS a major technology change goes far differently than anybody expects.
Something like that should be the assumption for planning. But that would have huge impacts on things the Antiplanner is talking about. It would blow apart most projections of train and light rail commuting.
“I too am doubtful that self-driving cars will take over more than half the driving in the next several decades.”
People said the same thing about motorized carriages taking over horse drawn carriages.
You will look as silly as they do with your silly silly backwards opinion.
“It does raise questions about how humans will earn money to buy the things robots provide. Maybe the rich will voluntarily share the wealth and offer guaranteed incomes to all. Ha! That’s probably another joke.” -Josh Freed
Gee, I was told we would all be riding Segway’s by 2010 and urban walking would be revolutionized. When is the last time you saw a Segway used by anyone but tourists?
Hey Frank — Something will change life a great deal in the next 20 years, but you don’t know what that is and neither do I. You are worse than planners who think they can predict the future with certainty. Have some humility and realize your limitations.
In fact, the Antiplanner is making the same mistake as Frank. The Antiplanner used to argue that urban planning was largely doomed because nobody could predict the future and free market economics dealt with the future better than any planner could.
But lately the Antiplanner has been just arguing that he is a better planner than most urban planners, and that he can see the future is self-driving cars. Maybe so, maybe not, but lately the Antiplanner is about planning for his vision of the future more than just leaving it to the free market.
Or am I going to far and the Antiplanner is just using self-driving cars as an “example” but not advocating for planning for them in the future?
”
Many of the world’s largest and best-capitalized companies from four different industries (auto manufacturing, auto parts, software, transportation services) are racing to be the first to solve all of the problems in the document you cite, and I suspect many of them have already been solved
” ~ anti-planner
You’re misspeaking, Mr. O’Toole. We know that the lion share of the issues have _already_ been solved. That’s why we’ve had Google and others testing their cars out on regular streets,rolling out their programs now to do things like pack families into Phoenix in their 100% driverless minivans.
Google & others have solved the big problems. They’re just testing to solutions and tweaking them to ensure and demonstrate their safety. Maybe the end product will never be good enough for political or consumer acceptance. But from a technical point of view, they more or less have a finished product.