Transit Death Spiral Continues

Transit ridership has been dropping for four years and increased subsidies won’t fix the problem. Data released by the Federal Transit Administration yesterday show that nationwide ridership was 3.1 percent less in June 2018 than it had been in June 2017. Ridership fell for all major modes of transit, including commuter rail (-2.6%), heavy rail (-2.5%), light rail (-3.3%), and buses (-3.8%). 

June 2018 had one fewer work day than June 2017, which may account for part of the ridership decline. But ridership in the first six months of 2018 was 3.0 percent less than the same months of 2017, and again ridership declined for all major modes of transit.

As in previous months, I’ve posted an enhanced spreadsheet that has all of the raw monthly data from the FTA spreadsheet but includes annual totals from 2002 through 2018 in columns GZ through HP, modal totals in rows 2125 through 2131, transit agency totals in rows 2140 through 3139, and urban area totals for the nation’s 200 largest urban areas in rows 3141 through 3340. The same enhancements are included on the “VRM” or vehicle-revenue miles worksheet.

June 30 is the end of the fiscal year for many if not most transit agencies, so now we can compare transit’s 2018 fiscal year performance against 2017 (see columns HU to HW in the spreadsheet). Nationwide ridership in FY 2018 declined 2.7 percent from 2017 and of course it fell for hundreds of transit agencies.

Of the nation’s 50 largest urban areas, June ridership grew in eleven, January through June ridership grew in ten, and fiscal year ridership grew in just six. Seattle is one of the six, having grown by 1.4 percent, the others being Pittsburgh (0.2%), Providence (1.1%), Nashville (3.5%), Hartford (3.3%), and Raleigh (6.1%). Except Seattle, these urban areas have seen declines in other recent years so this increase is not a great victory and probably won’t be sustained for long in the future. 

As I’ve noted elsewhere, Seattle has enjoyed steady growth in transit ridership not because it built light rail but because it has increased downtown jobs from 216,000 in 2010 to 292,000 in 2017. Downtown jobs are the key to transit ridership because most transit agencies run hub-and-spoke systems focused on central city downtowns. But replicating Seattle’s downtown growth is impossible in most regions, as all but six American cities have far fewer downtown jobs; nor would most people agree to accept the costs Seattle is paying in terms of subsidies to new employers, traffic congestion, and high housing prices resulting from land-use restrictions that prevent jobs and housing from moving to the suburbs.

Fiscal year ridership declines in many urban areas were larger than the increases in the few regions where ridership grew. The worst were Charlotte (-15.1%), Cleveland (-11.7%), Miami (-10.3%), St. Louis (-8.2%), Memphis (-7.7%), Jacksonville (-7.0%), Baltimore (-6.6%), Richmond (-6.6%), Philadelphia (-6.5%), Cincinnati (-6.2%), Virginia Beach (-6.1%), Dallas-Ft. Worth (-5.9%), Phoenix (-5.6%), and Boston (-5.2%). This is in addition to significant declines in all of these urban areas between 2014 and 2017.

Officials at the Charlotte Area Transit System must be proud that the light-rail expansion they opened in March led to a 65 percent increase in June light-rail ridership over June 2017. Yet this was a hollow victory as the agency lost 36,000 more bus riders than it gained in rail riders.

Transit agencies get about a third of their operating funds from fare revenues, and the decline in ridership has forced many to reduce service. The vehicle-revenue miles page shows that nationwide transit service declined by 5.1 percent in June 2018 vs. 2017. While some people blame the ridership declines on the service reductions, at least one study says it is the other way around: service has declined because riders abandoned transit, forcing agencies to cut back on spending.

Transit ridership has declined in many urban areas despite increasing service. Among many others, Phoenix increased 2018 service by 11.0 percent yet lost 5.6 percent of its riders; San Jose increased service by 3.1 percent but lost 4.2 percent of its riders; Indianapolis increased service by 4.3 percent yet lost 3.9 percent of its riders; Austin increased service by 6.5 percent yet lost 1.1 percent of its riders.

It appears that ride hailing is the principal factor in ridership declines. A recent study estimates that ride hailing grew by 710 million trips in 2017. If just 36 percent of those trips were people who would otherwise would have taken transit, then ride hailing is responsible for all of the decline in 2017. Declining ridership leads to service reductions, which results in more ridership declines, producing a death spiral of revenue shortfalls followed by service reductions followed by more revenue shortfalls.

Some cities are supplementing transit revenues by taxing ride-hailing companies, which I’ve noted elsewhere is a little like taxing word processors to protect the typewriter industry or pocket calculators to protect the slide rule industry. At least one city is looking at taxing marijuana to subsidize transit.

It doesn’t really matter. The decline in transit ridership is beyond the control of transit agencies, and increasing subsidies to what is already the nation’s most-heavily-subsidized form of transportation won’t make much difference. The only question is when will appropriators realize that it is pointless to continue subsidizing a dying industry and start winding down those subsidies.