A new perspective from Mineta Transportation Institute (MTI) spells out a decision that is before the industry concerning objectives: Should transit operate as a business or should transit operate as a public service? Or something else?
The authors of What is Transit: It’s Time to Decide, MTI Research Associate Joshua Schank and InfraStrategies LLC Senior Consultant Emma Huang, recognize the myriad of issues transit is asked to improve upon – from pollution and traffic congestion to resolving large society issues such as homelessness – and cautions that being the solution to all these challenges is pushing the industry toward financial instability.
“Transit’s fundamental financial paradox arises when transit is asked both to reduce the number of people driving cars and to provide a public service for those without cars,” the authors write.
The perspective explains the “transit as a business” objective must have customer service as its priority. The theory is that satisfied customers would translate to an increase in demand. However, in pursuit of a quality, sought after service, transit operators would need the flexibility to price this service based on demand like other services. This would mean some sort of subsidy would need to be developed to assist low-income people’s access to opportunities, which would allow transit agencies to focus on quality of their service, and government subsidies would help achieve larger social goals.
If transit is to operate as a public service, the authors argue it should be funded as other public services. This would mean operating zero-fare systems that are funded through taxes. The authors note measuring the impact of this objective should not be in ridership.
“Shifting transit to a public service could have the benefit of shifting the evaluation of the service to being primarily based on how well it is provided, rather than how many people use it,” explain the authors.
There is a third solution offered by the authors: Focus on a narrower, financially sustainable path forward that can also lead to viable social change.
“One method to find the right path forward for transit is to deal directly with funding first. The method by which revenue for public services is raised has a substantial impact on how it is spent. For example, the federal government has used a gas tax to fund much of its transportation investments over the last 60-plus years. This could be a way to financial stability for transit in the United States,” the authors explain.
The authors believe now is the ideal time for a frank discussion about transit’s purpose and goals with many urban areas currently negotiating the future of public transit.
“Revenues and ridership have fallen, COVID relief money is running out and new funding sources are needed to keep transit afloat. This is an ideal time to have a conversation about transit’s purpose and to focus the mission and funding of transit agencies on achievable goals to ensure transit is serving everyone in our communities and becoming even more accessible, efficient and sustainable in the future,” the authors said.
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The perspective can be viewed on MTI's website.
Mischa Wanek-Libman | Group Editorial Director
Mischa Wanek-Libman is director of communications with Transdev North America. She has more than 20 years of experience working in the transportation industry covering construction projects, engineering challenges, transit and rail operations and best practices.
Wanek-Libman has held top editorial positions at freight rail and public transportation business-to-business publications including as editor-in-chief and editorial director of Mass Transit from 2018-2024. She has been recognized for editorial excellence through her individual work, as well as for collaborative content.
She is an active member of the American Public Transportation Association's Marketing and Communications Committee and served 14 years as a Board Observer on the National Railroad Construction and Maintenance Association (NRC) Board of Directors.
She is a graduate of Drake University in Des Moines, Iowa, where she earned a Bachelor of Arts degree in Journalism and Mass Communication.
