Public Transit: A Bad Product at a Bad Price

Report Transportation

Public Transit: A Bad Product at a Bad Price

February 13, 2003 4 min read
John Semmens
Senior Research Fellow

The Executive Summary of this study was reprinted from an Issues Analysis from the Laissez Faire Institute, originally published in January of 2003.

For the full study, including detailed analysis and graphical data on the topic, please click here (Microsoft Word file).

The Decline of Public Transit

Urban public transportation systems have been in decline since the end of World War II. At that time, public transit vehicles provided 50% of travel in urban regions. Last year, 2% of urban travel in America was provided by public transit.

This decline has occurred despite Herculean government efforts to prevent it. Non-riders are forced to pay two-thirds of the cost for every transit rider's transportation. Per person mile of travel, government now spends twenty times as much on public transit as it does for roadways.

The decline of public transit is the result of powerful demographic forces that show no sign of reversal. Basically, the demand for public transit is inversely related to personal income. As people's incomes rise they can afford the more comfortable and convenient travel provided by owning and operating an automobile.

The "race" between the automobile and public transit is over. The auto has won. Nothing short of an economic debacle that drastically reduces urban standards of living can overturn this outcome.

Unwilling to face this reality, public transit's devotees are busy repackaging an early loser in the race (trolleys), hoping that a new name (light rail) and a new public relations campaign can persuade people that the tax increases needed to try to resuscitate this dinosaur are necessary.

The Light Rail Fad

Those who advocate light rail transit rely heavily upon the alleged "success" of trolleys in the cities that have them. Many have gone on pilgrimages to places like Portland and San Diego and returned with tales of great wonder and astonishment.

Why, these cities actually have trains. Frequently, there are passengers. Local transit bureaucrats and politicians rave about how wonderful these light rail trains have been for their cities. However, bureaucrats seeking to expand their empire or justify their budgets and politicians who have plowed millions of taxpayer dollars into these ventures have every incentive to exaggerate the benefits.

Of all the options in the current public transit mix, for most cities, light rail is probably the worst possible choice. It requires its own special track, so it lacks the flexibility of buses which can be run over existing city streets. Yet, its carrying capacity is far less than that of heavy rail.

There isn't a single light rail transit system in America in which fares paid by passengers cover the cost of their own rides. The aggregate deficit for 2000 (the latest year for which complete data are available) was more than a billion dollars. The average cost per passenger mile is around $1.20. These costs are far higher than the average cost per bus passenger mile of about seventy-five cents. Of course, no transit option matches the average cost of automobile transportation, which is about thirty-four cents per vehicle mile.

Light rail's inefficiency is matched by its unfairness. On average, taxpayers pay nearly 90% of the cost of light rail passenger travel. This is worse than the average for all transit modes. When all transit modes are considered, riders pay about one-third of the costs. Light rail compares even more unfavorably with auto transportation where private passenger vehicles currently pay more than 100% of their share of the cost of the road system.

Light rail's inefficiency and unfairness aren't offset by effectiveness. Only in Portland does light rail transit account for as much as one percent of the urban person-miles of travel. The average share of person-miles of travel for light rail transit was only three-tenths of one percent.

Light rail is touted as a means of reducing urban traffic congestion. The claim is that it will lure drivers out of their cars and, thereby, reduce traffic congestion. If all of the light rail passengers would have otherwise been driving their own cars, light rail would, on average, be removing three cars in 1,000 from the roads. However, studies have shown that about 80% of new light rail passengers were former bus passengers. Taking this into account, the real impact on traffic is for light rail to remove less than one car in 1,000 from traffic.


The transit numbers tell a tale of inefficiency, inequity, and ineffectiveness. In no city is transit run on sound business principles. There is little effort to try to generate compensatory revenues from customers. Huge and unending losses are the result. Riders are asked to pay a pitifully small share of the costs.

Modern urban travelers want convenience, comfort, and speed. The automobile best fits these requirements. This is why the auto is the choice for the overwhelming majority of urban travelers. The inconvenient, frequently uncomfortable, and slower transportation offered by public transit modes does not meet the needs of more than a small fraction of urban travelers. Given its inferior performance characteristics relative to other transit options, light rail is the most unappealing choice for trying to meet the needs of the small fraction of urban travelers who rely on public transportation.

For the full study, including detailed analysis and graphical data on the topic, please click here(Microsoft Word file).

John Semmens is an analyst with Laissez Faire Institute
828 N. Poplar Ct., Chandler, Arizona 85226; e-mail:


John Semmens

Senior Research Fellow