Transit Cost-Effectiveness

How cost-effective is our public transportation system?

Transit Cost-Effectiveness

Definition: 
Transit cost-effectiveness refers to both the total and net costs per transit boarding, both of which are adjusted to reflect inflation over time. Net costs reflect total operating costs minus farebox revenue (i.e. operating costs that are not directly funded by system users).

Bay Area residents benefit from one of the most robust transit systems in the United States. Even in lower-density suburban areas, frequent rail service and local bus connections are relatively common. But public transit is expensive to operate, and there is wide variability in cost-effectiveness across the region’s numerous operators. As costs have increased, riders have borne an increasing share of this expense through higher fares.

Regional Performance
The Bay Area has stabilized transit operating costs and is also relying on larger fare contributions from riders.

Although per-rider operating costs ticked slightly upward in 2015, transit cost-effectiveness has been relatively stable over the last decade-plus. Combined with rising revenues from increased fares, the subsidy required to operate service (net cost per boarding) actually declined by 17 percent between 2003 and 2015. Booming ridership on higher-fare systems like Caltrain and BART has contributed to this trend.

Muni remained the regional leader for lowest total operating cost per boarding in 2015, although costs ticked very slightly upwards in the last few years. When it comes to net operating cost per boarding, BART and Caltrain have made the greatest strides in recent years. Both systems saw nearly 70 percent declines in the past dozen years, reflecting surging ridership on both systems. BART riders paid $3.43 out of each $4.29 in total cost per boarding, requiring only 86 cents in operating subsidy, whereas on systems like SamTrans and VTA it was around $1.00 out of $7.00, requiring $6.00 in operating subsidy in 2015.

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Historical Trend for Transit System Efficiency - Region

 
National Context
High costs put the Bay Area in the middle of the pack when it comes to transit cost-effectiveness.

The Bay Area ranks fourth among the 10 largest U.S. metro areas for its transit systems’ average operating cost per passenger boarding and net cost per boarding, despite relatively high fares across the region which contribute to relatively strong farebox recovery. Due in large part to very high ridership numbers, the New York metro area’s transit network is by far the nation’s most cost-effective. The Bay Area’s middling transit cost-effectiveness rankings are largely the result of the region’s high operating costs.

While the Bay Area’s transit system is by no means the most cost-effective in America, transit operators in Dallas and Houston experience even higher operating costs per boarding. Reflecting their relatively transit-incompatible service areas – and a greater share of low-income or transit-dependent riders – these systems have net operating costs per boarding that are 60 to 85 percent higher than the Bay Area.

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Metro Comparison for Transit Cost-Effectiveness

Sources: 

Federal Transit Administration: National Transit Database

Time Series 2.1 Data Table (2003-2015)

Federal Transit Administration: National Transit Database

Monthly Module Adjusted Data Release (2013-2014)

Bureau of Labor Statistics: Consumer Price Index

All Urban Consumers Data Table (2003-2015; specific to each metro area)

Image: MTC Library, Photographer: Karl Nielsen (ID# KCN_9134)

Methodology Notes: 

Simple modes were aggregated to combine the various bus modes (e.g. rapid bus, express bus, local bus) into a single mode to avoid incorrect conclusions resulting from mode recoding over the lifespan of the Federal Transit Administration’s National Transit Database (NTD). For other metro areas, operators were identified by developing a list of all urbanized areas within a current Metropolitan Statistical Area (MSA) boundary and then using that Urbanized Area (UZA) list to flag relevant operators; this means that all operators (both large and small) were included in the metro comparison data. Financial data was inflation-adjusted to match 2015 dollar values using metro-specific Consumer Price Indices.