Public transportation

Cities Try to Avert 'Transit Apocalypse' With Taxes on Uber, Lyft

Transportation innovation is seeing more people flee outdated public transit.

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Enriquecalvoal/Dreamstime

Mass transit agencies across the country have been having a hell of a time paying for their creaky and often ill-used bus and light rail lines. A couple of cities have come up with a novel solution: tax the transportation services that riders have been using instead.

Yesterday, San Francisco's Transportation Taskforce 2045 produced a proposal to impose a fee of $.20 to $1 per trip on ride-sharing services such as Uber and Lyft. The revenue would be used to shore up the city's Muni bus system and to pay for a bunch of bike lanes and streetscaping projects.

Chicago Mayor Rahm Emmanuel has a similar notion. His 2018 budget includes a $.15 tax on ride-share trips, with the revenue earmarked to fund the Chicago Transit Agency. "We will be the first city to tap the ride-share industry for resources to modernize our transportation system," he told Chicago's city council.

Behind the rhetoric about "modernization" and building transit systems for the future is an attempt to prop up antiquated forms of public transportation that are increasingly irrelevant to today's urban centers.

According to a new study by the Cato Institute's Randal O'Toole, per capita transit ridership has been on a slow but steady decline for the past 50 years. In 1970, the average urban resident took 50 transit trips a year. By 2016, John Q. Citydweller was taking 39, even though politicians directed more than a $1 trillion to the construction and operation of new rail lines, street cars, and fleets of public buses over that period of time.

The raw number of public transit riders has also been in decline over the past three years. Between 2014 to 2016, transit ridership fell 4.4 percent. In the first seven months of 2017, it was down another 3 percent. O'Toole pins this decline on lower gas prices and the rise of ridesharing services. A 2017 survey conducted by researchers at Berkeley found that a third of ride-share users would have taken public transit were Uber and Lyft were not available.

As transit gets squeezed from the outside by cheap and convenient competitors, transit agencies are buckling under the internal pressure of long-deferred maintenance and underfunded pension and health liabilities.

New York's subway system is looking at a $6.3 billion maintenance backlog. D.C.'s WMATA needs to spend $17.4 billion over the next 10 years to fix the maintenance backlog in Washington's Metrorail system. In 2015, the Federal Transit Administration estimated that the transit industry as a whole had a $89.8 billion backlog, a number O'Toole considers "conservative."

Meanwhile, the Chicago Transit Agency has $1.5 billion in unfunded pension obligations—almost as much as its $1.8 billion operating budget. Boston's unfunded pension and health care benefits are double its operating budget of $1.6 billion.

These huge liabilities require agencies to spend an incredible amount of money they don't have on things that will at best prevent transit service from degrading further.

As a fix, O'Toole suggest that transit agencies "stop wasting money on expensive and noncompetitive transit services and focus on providing basic, cost-effective services for those who need transit the most, while putting their economic houses in order by reducing maintenance backlogs, debts, and unfunded obligations." In other words: Stop building new rail lines, and replace the current lines with bus services as they outlive their usefulness.

Instead of grappling with these long-run problems, transit agencies are exacerbating them by building costly light-rail extensions that fail to attract riders. The debt-ridden, fire-prone Washington Metro thought it would fix its problems with the fancy new Silver Line. It didn't, and now the region is building a $2.65 billion Purple Line to service the area's Maryland suburbs.

Seattle's $54 billion transit expansion is expected to net around 30,000 additional daily riders by 2040. That's $1.8 million for each new rider.

These transit expansions are years away from completion, leaving cities with little short-term recourse than to crack down on their competition. Hence the ride-sharing taxes proposed in Chicago and San Francisco. Hence also the onerous regulations and strangely targeted inspections that have befallen San Francisco's only private bus service.

It's a shame. Mobility is crucial both to vitality of urban areas, and to individuals' ability to live richer, fuller lives. Instead of taxing the transportation modes of the future in a vain effort to shore up the transit services of the past, cities should look for ways to embrace ride-sharing, driverless cars, and whatever other innovations are on the horizon.

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  1. You’re not going to replace or even remotely threaten transit in dense cities like SF or NYC (at their highest populations ever) with Uber and Lyft – let’s get that out of the way. Yes, Uber and Lyft have a place and yes, they should not be taxed to fund transit. Obviously there are glaring problems at many transit systems like the pension problem you highlighted, but every time you lump in Seattle’s boondoggles or the dying systems in many cities across America with vital systems like Muni and the MTA that are experiencing peak ridership I feel that you’re clouding the issue.

    1. Seattle’s boondoggles or the dying systems in many cities across America with vital systems like Muni and the MTA that are experiencing peak ridership I feel that you’re clouding the issue.

      It is my life’s goal to make Seattle’s problems everyone else’s.

      1. Dear god no.

          1. Holy Hell is ‘Powerpoint as news’ beyond irritating.

          2. 12,000 seems low, honestly. I swear there are like 6,000 camped out in Pioneer Square alone.

          3. That article checks so many boxes I lost count. But please keep trying the same failed policies harder.

            1. And this was the most important box that got checked.

              one percent transgender, and one percent as neither male, female, or transgender.

    2. Obviously there are glaring problems at many transit systems like the pension problem you highlighted, but every time you lump in Seattle’s boondoggles or the dying systems in many cities across America with vital systems like Muni and the MTA that are experiencing peak ridership I feel that you’re clouding the issue.

      Not having my thumb on the pulse of the Muni and the MTA is there anything that prevents them from being the exception that proves the rule or, more likely, just not *yet* as fucked up as the rest? The pension problems seem hardly unique or uniquely relevant to transit.

      1. I looked up their financials here and as best I as I can tell they are running at a pretty big deficit if not for subsidies. And even with subsidies they expect to be running at a deficit by 2020.

        So, even if it is peak ridership they are not doing particularly well.

        1. Yeah, I don’t mean they’re paying for themselves or anything – I should have been clear about that. I just mean they’re not going away – not when to take an example something like 60% of the commuters into Manhattan ride the subway. Versus 4% or whatever in a typical city.

          1. I take that as a likely example of just how badly run public utilities are. My guess is that it is one place that mass-transit could survive well if it wasn’t a shit show.

          2. 0% of the commuters in my city ride the subway.

      2. The simplest explanations are density and jobs. In almost every other city in the country transit is dying because there isn’t a critical mass of people to keep it afloat and all the jobs moved to the suburbs. That is not the case in NYC or SF.

        The systems themselves are incredibly f—-d up. But the cities coudn’t function without them. Not without losing, say, half their population first.

      3. The trains are seeing ridership increases but the buses are seeing drops. This is the result of wealthier single people being able to afford higher rents near train stations and refusing to take the bus because it’s for poor people and slower.

        1. wealthier single people being able to afford higher rents near train stations

          That’s always been the case. What’s changed is that the buses are slower than ever. There were also huge service cuts a few years ago.

          1. Well “near” has become nearly a mile now.

            And service cuts always prompt further ridership drops. Why be dependent on the bus that runs at 12:30 am when they’re going to slice service at 11pm next time? Uber/Lyft may raise prices at low-supply hours, but at least they have an incentive to supply.

  2. Rule #1 of the System: Preserve the System.

  3. So this would be an open admission that people need to be forced to ride the trains by making any possible alternative more expensive than the train. Well, at least they’re becoming clearer on their intentions I suppose.

    1. Any possible alternative is already more expensive. Except biking or walking, I guess.

      1. Not if you divide cost by ridership it isn’t. But, of course, very generally speaking the people riding most of those trains are likely not the people paying the taxes that maintain and purchase them.

        If you’re talking about the yearly card or daily fare option you’d be right, I would think.

        I get your point above regarding New York specifically, but few places have the same population density. They probably would have been better off building roadways down there instead of tracks, but I’d admit it’s probably impossible to know for sure. There are limits to how much and what you can build on a marshy island, so I won’t pretend to know the ‘right’ answer for that bizarre City-State.

        1. Where – NYC? It’s not marshy. It’s bedrock. Also, the first subway was built in 1904. Not many people had cars then. And again, the throughput on a subway train is many times higher. Without the subway NYC would have been limited to a fraction of its current size.

          1. Everywhere is bedrock if you go far enough down, but like I said I’m not very familiar with New York in particular. I’m well aware that it’s population density makes it an outlier in feasibility though, right along side comparable Japanese cities that also use a lot of trains.

            Most American cities don’t get that dense, and from what I’ve seen even in places like New York their systems don’t survive on rider fee’s.

            Frankly, part of the issue is that there is not as much of a logical incentive to build up in the United States as one thing we have a surplus of is open land. Trains, as a form of transport, are not terribly well suited to dense population centers but then again nothing really is ideal other than walking or biking due to simple storage constraints. That’s one reason why a train could be considered ‘better’ than individual vehicles there; where are you going to store them all when space is at a premium? You see the same in San Francisco.

            Paying more money to store one’s vehicle than you paid for it isn’t something most people are willing to do.


            Without the subway NYC would have been limited to a fraction of its current size.

            I find this unlikely since trains in other metropolitan area’s do not appear to create or limit urban sprawl. It is possible, I will admit, but this effect was most noticed after the invention of the automobile, not the train or subway.

            1. By size I mean population.

              1. If trains increased the potential population of New York wouldn’t that mean that we could just build some trains in Detroit and people would move there? I think that’s almost exactly backwards but I’ll admit I’ve lost sight of the point and, furthermore, I don’t think that’s what you’re saying. I haven’t seen you post memorable things that would indicate that you’re dumb, and that would be a dumb point, so I assume I’m misunderstanding you somewhere along the line.

      2. Not once you factor in the *total* costs – including subsidies – it isn’t. In fact once you do that pretty much only buses come close to being as cheap as getting your own used car.

        1. That’s why I’m a fan of killing the public sector unions BAMN. They are the cause of that situation. There is no other reason economies of scale shouldn’t make it more cost effective to haul around tons of people than individuals one by one.

  4. Meanwhile, the Chicago Transit Agency has $1.5 billion in unfunded pension obligations

    It was the pension plan’s huge payout to Terry Kath’s widow that hit the fund hard.

  5. Isn’t the point of living in a city to walk everywhere?

    1. Why, if you never leave your little burrow, you’ll never be more enlightened and socially aware than those hicks out in flyover country who never leave the county!

    2. Not a lot of people are lucky enough to walk to work.

  6. God I hate public transit and the dregs of humanity that advocate for it. I love mass transit, too bad public transit ruined it. Cutting service because of “low-ridership” just compounds itself. They could try things like zoned fares, flexible routes, overnight surcharges, etc.

    In every instance the excuse is “poor people need certainty”. And what they wind up delivering to “poor people” is service that takes more and more time out of their day – which is even worse for them than a fare increase. When you go from providing bus service every 15 minutes to providing bus service every 30 minutes, you’ve essentially added a full hour to the time it takes to leave the house, get the ride, do your business, get the return ride, return home. More time spent waiting for service than actually getting service – which is costly to the customer.

    Even when you can get someone higher up to understand this, the only solution is to prove service every 15-minutes but in a much narrower window. Now you have to cram your business into a tighter and tighter window. Which again is just a different kind of cost increase. They really don’t give a flying fuck about the poor, it’s just the convenient bureaucratic excuse for their own laziness and inability to figure out how to properly price their product to reach the most customers profitably.

    1. There is definitely a lowest-common-denominator aspect to it all. Which is why you get people screaming every time they want to raise the fare, even in NYC where a good chunk of people can easily afford it.

      1. I’m actually not against removing the fig leaf altogether and just making public transit free. You can still measure its success on traffic abatement and ridership, and calculate the cost of the system against those metrics.

        1. The fig leaf is the only thing putting any semblance of economics into the thing. Free transit means riding in a mobile outhouse or a mobile flophouse. And the union will demand a 20% raise for combat pay. Free means service will be cut so drastically you won’t even know its there. Ridership will plummet. Basically it will mean one trip per hour – and 4 drivers on the payroll to cover for it.

    2. This, in spades. “Mass transit” and “public transit” are two entirely different things. Free market would fix this so well it would even amaze that vile totalitarian Rahm Emmanuel.
      Constitution “general welfare” that benefits everyone, not benefit some at a cost to another.

  7. I’m actually not against removing the fig leaf altogether and just making public transit free.

    I’m definitely against making public transit, or any other public service, “free”. This sort of thinking makes people think that there really is such a thing as a free lunch, when in fact the lunch is far, far from being free. Something has to be charged, even if a token amount. Hiding costs from people who use a service ? what could go wrong?

  8. “‘We will be the first city to tap the ride-share industry for resources to modernize our transportation system,’ [Emmanuel] told Chicago’s city council.”

    If I want to read Ayn Rand I’ll go to the library, thank you very much.

    1. As if uber drivers aren’t already paying all the other taxes that get funneled to the inefficient public transit system.

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