The Long Road to Public Transit Recovery

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While the stock market, unemployment rates, and GDP have recovered and even exceeded pre-pandemic levels, the same can’t be said about public transit ridership in cities across the US. In fact, the long road to ridership recovery (pun intended) complicates the economic picture for cities the longer the recovery drags on.

The Problem

Amongst the top 5 transit agencies by ridership, none have returned to pre-pandemic levels. If we look at all transit rail systems in the country, American public transit systems operate at 70% of pre-pandemic levels as of June 2023:

Notably, private vehicle miles traveled has recovered to its pre-pandemic level. The pandemic spurred a confluence of changes in behavior amongst consumers, businesses, and local transit agencies. These changes - listed below - are proving difficult to overcome:

• Public safety and health concerns pushed more people to use private cars or micromobility options (e.g. bike share)

• Public transit operators retired or shifted careers, causing services to degrade (e.g. delays)

• Work from home measures eliminated the need to commute from exurbs and suburbs to city centers.

The Bay Area’s BART system is especially illustrative here. BART has struggled more acutely than other major transit systems with daily ridership hovering around 30% of it’s pre-pandemic average. The system - as it was built - primarily served suburban commuters traveling to and from work in the Oakland and San Francisco city centers (where property values are also dramatically higher). In a post-pandemic, remote work environment which tech companies initially embraced, this source of ridership is severely reduced.

The Unreasonably High Return on Public Transit Investment

Public transit investments generally yield incredible returns on investment (ROI). As of 2020, the return was $5 for every $1 invested; that is, for every $1 spent on public transportation, $5 is added to GDP. A variety of industries are stimulated by the investment in physical infrastructure, jobs are created, and savings from vehicle ownership / maintenance are passed to consumers. Harder to quantify on a dollar basis but still important are the environmental benefits and access to opportunity gained from an expanded public transit network.

The Doom Loop

Fares from ridership typically pay for the daily operations of public transit systems but ridership also helps systems qualify for state and federal grants. Further, ridership is a key metric to prove to lawmakers with tight budget constraints that public transit is worthy of funding through state general funds. This makes low ridership in and of itself a problem, but the problem is compounded still by dwindling COVID relief funds which are projected to run out entirely within 2 years. The knock on effects continue from there:

• If transit systems can’t afford to operate and don’t get any additional funding, they cut back service or reduce the number of service lines.

• Wages for public transit employees are pared back

• More consumers rely on TNCs, taxis, or private vehicles and bear the respective costs

• Access to downtown areas where commerce occurs is dampened (resulting in lower revenues from sales tax)

This is a “doom loop”. We simulate this doom loop using the same $1B investment example as above:

What Transit Agencies Can (And Can’t) Do

Transit agencies can’t unilaterally implement congestion pricing to encourage public transit use nor can they change zoning laws. New York, for example, needed to get permission from the Federal Highway Administration to implement congestion pricing in 2024.

So, though additional state and federal funding are a required short-term solution, this moment calls for innovation. After all, there are only so many cuts to be made. Transit agencies across the country have begun experimenting with ideas like:

• Partnering with TNCs - Uber - to offer free rides to/from stations (Dallas Area Rapid Transit)

• Shifting services to accommodate late-night ridership and events rather than commuting for work (Bay Area Rapid Transit)

• Partnering with private real estate developers to build “transit-oriented developments” (simultaneously addressing affordable housing shortages and the last-mile problem public transit networks consistently face)

This is only the start; transit agencies can - and should - experiment with transforming commerce and spaces in/around stations as well. The next couple years will shape what public transit looks like for decades to come.