Gas Prices Send Surge of Riders to Mass Transit:
Some cities with long-established public transit systems, like New York and Boston, have seen increases in ridership of 5 percent or more so far this year. But the biggest surges — of 10 to 15 percent or more over last year — are occurring in many metropolitan areas in the South and West where the driving culture is strongest and bus and rail lines are more limited.
So naturally the mass-transit business is booming, right? Well, no:
The cost of fuel and power for public transportation is about three times that of four years ago, and the slowing economy means local sales tax receipts are down, so there is less money available for transit services. Higher steel prices are making planned expansions more expensive.Typically, mass transit systems rely on fares to cover about a third of their costs, so they depend on sales taxes and other government funding.
Fares cover about a third of their costs.
Presumably mass-transit systems require large up-front investments and fairly large fixed costs, but the marginal cost of each additional rider should be negligible. That’s the promise of mass transit, after all. So when ridership jumps 5 percent, that should be free money — but they’re having trouble making ends meet.
It’s almost as if these mass-transit systems don’t make economic sense…