Public Transportation Faces Post-Pandemic Challenges

Public Transportation Faces Post-Pandemic Challenges

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INSIGHTi

Public Transportation Faces Post-Pandemic
Challenges
April 18, 2022
The Coronavirus Disease 2019 (COVID-19) pandemic has had an unprecedented effect on public
transportation agency budgets. Public transportation agencies have kept many buses and trains running,
especially to support the travel of “essential workers,” but ridership and fare revenues have plummeted.
Public transportation agency budgets have been supported by federal supplemental appropriations totaling
$69.5 billion, about five times the pre-pandemic $12 billion in annual federal public transportation
support and more than three times the $19 billion coming from fares and other operating revenue
annually.
While the pandemic is challenging the public transportation industry nationwide, its financial effects are
pronounced most on agencies that operate the 15 subway and 32 commuter rail systems in the United
States, the largest of which are located in the New York metropolitan area. This is because subways and
commuter rail have lost a greater share of ridership than bus systems due to the pandemic and are
typically more reliant on fares to cover operating costs. These trends, if they hold, have implications for
federal public transportation policy.
Ridership Trends
Nationally, public transportation ridership in 2020 and 2021 was less than half of what it was before the
pandemic—about 4.7 billion and 4.9 billion trips, respectively, compared with about 10.0 billion trips in
2019. Subway and commuter rail ridership declined more than bus ridership, particularly early in the
pandemic. Patronage of all three modes has recovered to some extent, but in the final quarter of 2021,
ridership was far lower than in the final pre-pandemic quarter at the end of 2019 (Figure 1). Commuter
rail ridership, 45% of the pre-pandemic level, has been slowest to recover, while subway ridership was at
53% of the late 2019 level.
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Figure 1. Quarterly Public Transportation Ridership by Mode

Source: American Public Transportation Association (APTA), Public Transportation Ridership Report.
Note: Data are subject to revision.
Travel patterns, including commuting, are complicated. The disruptions caused by the pandemic,
particularly full-time telecommuting for many office workers, had a larger effect on subway and
commuter rail ridership than on bus ridership. While bus systems are widespread and serve many trip
destinations and purposes, most subway and commuter rail lines are oriented to commuting trips into
downtown employment centers of large metropolitan areas. The effect of greater telecommuting on
demand may have been compounded by population losses in some of these places, such as New York and
San Francisco, in 2020 and 2021.
Fare Revenues
With fewer riders, transit agencies have collected much less fare revenue. Prior to the pandemic, fares and
other operating revenues covered about one-quarter of the total cost of providing public transportation,
about $19 billion out of total capital and operating costs of $80 billion in 2019. Most of the rest was
provided by taxpayers at the federal, state, and local levels. While the five-year average (2015-2019) of
fare revenue as a share of total costs for buses was 20%, the shares of total costs for subway and
commuter rail coming from fares were 34% and 32%, respectively (Figure 2).
Figure 2. Fare Revenue as a Share of Total Expenses by Mode
5-Year Average, 2015-2019

Source: APTA, 2021 Public Transportation Fact Book: Appendix A, Washington, DC, 2021, Tables 62, 68, and 92.
Note: Expenses used in the calculations are the total of capital and operating expenses.

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The share of bus costs coming from fares is lower because buses provide service on many low-demand
routes and times of day to provide geographic and temporal coverage, whereas rail is typically deployed
on select routes and at times of the day that have high demand. Rail riders, moreover, have higher
incomes on average and may be willing to pay relatively higher fares to avoid peak period traffic and
parking costs. With comparatively lower incomes, bus riders are generally more sensitive to fares.
Policy Issues
Public transportation ridership declined by about 7% in the years before COVID-19 due to a combination
of factors, including the relatively low cost of driving, the rise of shared ride and micromobility options,
and the continued decentralization of jobs and housing. This trend was reinforced by the much larger drop
in ridership precipitated by the pandemic. On the other hand, higher gasoline prices and future efforts to
decarbonize the surface transportation system to combat the effects of climate change may encourage
greater use of transit.
Public transportation agencies, especially those with subways and commuter rail systems, are likely to
need additional support from taxpayers to avoid having to reduce service dramatically. One question is to
what extent such support can come from the federal government versus state and local government.
Another is whether additional support should be predicated on reducing costs and initiatives to increase
demand. One such initiative would reorient commuter rail systems away from rush-hour suburb-to-
downtown commutes to offer more frequent service throughout the day in both directions, including on
weekends. Another initiative being advanced in some places involves improving connections, including
coordinating schedules and providing free transfers among transit systems.
A longer-term policy issue is how transit agencies should adapt if ridership and fare revenues do not
return to pre-pandemic levels. One study, for example, estimates that 20% of full workdays will be done
from home post-pandemic, compared with 5% pre-pandemic. This outlook poses challenges for subway
and commuter rail systems that require long-term capital investments and for the federal programs that
fund such investments. The main such program, the Capital Investment Grant program, originally was
created to fund construction of new rail transit projects, but it now funds bus rapid transit (BRT) and
projects to increase the capacity of existing rail and BRT systems. An issue is whether future federal
funding should focus on buses, which last about 10 years and can be redeployed as demand changes,
rather than on rail systems that last 30 years or more and are far more efficient at transporting large
numbers of passengers in dense corridors but are not easily reconfigured in response to changing travel
patterns.

Author Information

William J. Mallett

Specialist in Transportation Policy

Disclaimer

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