How to protect transit service from the next recession

During the last recession, cuts to transit service left people without a safe, reliable, or affordable way of getting where they need to go. (Photo courtesy of St. Louis Post-Dispatch)

Even though public transportation didn’t cause the late-2000s recession, transit riders were devastated by the service cuts that resulted from it.

Now, as we near the end of another decade, economic indicators are pointing to the strong possibility of another recession. When the next recession does occur, transit providers – and the elected officials, from federal to local, who allocate funding to them – must prove that they’ve learned to weather it. If properly sustained, transit connectivity could even help soften the next recession’s blow to the public and protect our society from further harm.

The auto industry recovered from the recession. Why didn’t transit?

Transportation policy implemented as a response to the 2008 recession did protect certain jobs and benefit communities that otherwise would have faced greater short-term challenges than they did. But this policy also entrenched the shortcomings of our present-day mobility, as automobile interests enjoyed the lion’s share of the rewards from taxpayers.

For decades, the likes of General Motors and Chrysler had prioritized manufacturing of SUVs and pickup trucks, which earn the companies higher per-vehicle profit margins than standard automobiles despite their poor fuel efficiency. However, during the 2000s, gas prices rose and, though the prices remained well below actual fuel costs, consumers not only embraced smaller cars produced by foreign companies, but also rode transit in steadily rising numbers through the middle portion of the decade.

Predictably, the auto industry found itself in a quagmire when the recession hit.

However, because a lot of people work for car companies, the federal government gave the companies an $80 billion bailout ($12 billion of which was never paid back) to preserve the employment they provide. Additionally, to create construction jobs, $27.5 billion in stimulus funds went to the country’s road and highway system, which carries the cars the bailed-out corporations build.

Transportation modes that don’t involve cars did see support, but not to the same degree. The stimulus package included $8.4 billion for local transit and $9.3 billion for intercity rail.

The vast majority of the local transit funds were restricted to capital projects, rather than system operation. Accordingly, even as transit providers purchased new vehicles and built new tracks, they couldn’t afford to sustain their existing networks as the state and local funds their operating budgets depend on dried up due to the slow economy.

Deep cuts to transit service resulted, stunting ridership and revenue. Specifically, nearly three-quarters of U.S. transit agencies had either implemented or were considering service cuts by 2010. For example, the Pittsburgh area’s Port Authority of Allegheny County eliminated 15 percent of its bus service hours in March 2011. Los Angeles Metro, despite its ambitious rail goals, slashed 10 percent of its bus service, most of which it never restored.

Much of the intercity rail funding, meanwhile, fell victim to the polarized political environment surrounding U.S. transportation. Following elections in 2009 and 2010, nearly inaugurated governors Chris Christie (NJ), Scott Walker (WI), Rick Scott (FL), and John Kasich (OH) all cancelled large-scale rail projects and returned the federal dollars intended for them. The largest project to survive – California’s under-construction high-speed rail line – has also proceeded more slowly than it should have, largely due to lawsuits and political bickering.

Public transportation doesn't just provide connectivity. It puts people to work. (Photo courtesy of MPR News)

Though U.S. auto companies promised to focus more on vehicle fuel efficiency at the time they were bailed out, today they’re once again prioritizing SUVs and trucks in pursuit of profit. People who drive those vehicles still have to worry about sudden oil shocks stemming from Middle East strife. In the meantime, transit systems remain underutilized, underfunded, and stigmatized.   

Thus, when the next recession hits, public transportation should be treated as an essential form of connectivity that’s vital to the economy, rather than something that can simply be tossed aside in an attempt to balance a budget. 

Policymakers at all levels of government can take steps to ensure this happens.

A federal focus on underdeveloped parts of our transportation system would create jobs, both directly and indirectly

Over a half-century of federal appropriations have shaped how U.S. transportation infrastructure – and, accordingly, U.S. transportation culture – looks today. In the 1950s, our country’s leaders decided to construct a state-of-the-art highway network, and thanks to decades of sustained commitment, they succeeded. Though our roads and highways – in contrast to our transit – are now more or less built out, roads continue to receive four times as much federal formula funding as transit does.

The next recession’s stimulus package should put people first, prioritizing frequent, reliable transit over special interests and politics, as follows:

Increase capacity while preserving space: Road expansions don’t make it easier for people to get where they need to go, as added capacity is quickly consumed by more cars. Fortunately, there is a more effective and less disruptive way to increase capacity: re-purposing existing road space.

Protected bike and pedestrian infrastructure gives people more options for short trips – over 45 percent of present-day car trips are three miles or less in length – while dedicated transit rights of way provide a more reliable, less stressful way to reach destinations both near and far. There would also still be street space for people who drive, who would wind up at least as well off as if roads were widened.

Like road expansion projects, re-purposing of street space requires construction – creating jobs in line with a stimulus package’s objectives – but taxpayers would get much more bang for their buck. For one, dedicated transit lanes facilitate faster service, which boost a system’s financial performance through a combination of increased ridership and reduced operating costs. Benefits would extend beyond just improved connectivity, as mobility would become safer and healthier, public spaces would become more inviting, and we’d breathe cleaner air while making progress toward greenhouse gas emission reduction goals. 

Fund high-quality mobility, not just infrastructure: While transportation systems require infrastructure, vehicles, and other capital assets to function, effective mobility requires more than just steel and cement. For automobile-based modes, non-infrastructural necessities include car companies’ manufacturing, sales, and marketing arms; public-sector regulators who ensure cars adhere to safety and environmental standards and drivers are qualified to be behind the wheel; police who enforce the rules of the road; and first responders who save lives when cars crash.

Similarly, public transit systems require operating funds in order to connect people to their jobs, errands, medical appointments, and other life needs. Thus, in order for the next transportation stimulus package to tangibly benefit the public, a substantial portion of the funds must go toward transit operation.

As labor typically constitutes at least 70 percent of a system’s operating costs, the majority of this funding would be injected straight into the economy, sustaining stable, well-paying jobs. Other beneficiaries of the funds would include producers of the electricity, natural gas, and diesel that fuel our transit systems, as well as the fleet maintenance programs that keep those systems safe and reliable.    

  

Give states and localities flexibility, but make sure they stick to their plans: Since the last recession, another powerful car-based transportation industry has arisen: app-based ride-hailing.

Ride-hailing, like public transit, typically doesn’t earn enough revenue from fares to cover its operating costs. Infusions of venture capital – largely from traditional auto and oil companies – covered the industry’s losses for years. But now that the likes of Uber and Lyft are publicly traded, they’ll have to demonstrate they can earn profit to sustain stable operations. This will be challenging for them, especially if a recession strikes.

However, as ride-hailing gigs have become a source of income for many – Uber alone has an estimated 1.5 to 2.5 million drivers in the U.S. – it’s possible that, in the case a recession pushes the industry to the brink, firms will lobby for a federal bailout comparable to that the auto industry received in 2008.

However, driving for a ride hailing company is much different than working for a car manufacturer – while the latter provides relatively stable jobs, the former refuses to consider its workforce employees. In addition, it’s debatable whether the transportation ride-hailing companies provide, which has worsened traffic congestion and experienced significant safety issues, has benefitted our mobility. 

Thus, it should be up to states and localities to determine how ride-hailing should fit into their transportation networks, as well as how, if at all, taxpayer dollars should be used to optimize that fit. There’s already evidence that ride-hailing firms see contracts with transit providers as a path to profitability – a direction that would put them into competition with traditional transit contractors such as Transdev and First Transit, rather than transit systems themselves – and a recession may force them to restructure their operations more exclusively to that end. Metropolitan areas may be particularly interested in bolstering ride-hailing firms’ bike- and scooter-share arms, which in some cases have proven more popular than their car services.

But for larger-scale capital projects, states and localities that receive stimulus transit funds should be required to use those funds to achieve the objective they were intended for. Uncertainty stemming from political manipulation, such as that which stalled rail projects in 2009 and 2010, makes it incredibly difficult to plan and construct an effective transportation network. Thus, while practical adjustments to projects are a natural part of the planning process, any jurisdiction that opts to return already-obligated transit or intercity rail funds to the federal government without sufficient reason should be required to forfeit not just those funds, but also an equivalent portion of their formula-based highway allocation.

States and localities must embrace long-term goals

Though the above-described federal-level steps would catalyze widespread benefits, states and localities that wait for Congress and the president to act risk being let down. Fortunately, they also can take steps, independent of what happens nationally, to preserve and improve their mobility while bolstering their economies and creating jobs, as follows:

Consider the social, economic, and environmental impacts of service cuts: Before they can be built, proposed transit expansions must undergo extensive environmental review. This process can take years, and often becomes a tool transit opponents use to file lawsuits and stall much-needed projects.

Service cuts, on the other hand, are much easier to implement. Typically, a transit agency facing fiscal challenges will release a list of routes slated for elimination or reduction. They’ll then hold a couple public hearings at which riders of these routes can plead for mercy; the agency may then back off the original proposal slightly, but will still lay down the hammer in the end.

Title VI of the federal Civil Rights Act is one of few viable existing tools that transit advocates can use to fend off service cuts. But in order to be stopped using this mechanism, a cut must constitute obvious discrimination against minority or low-income riders – a high and unclear threshold. Typically, a transit agency can submit a back-of-the-envelope equity analysis to fulfill Title VI requirements; failure to conduct the proper analysis may result in a Federal Transit Administration request for more analysis, but actual service restoration is much less likely. Even if the analysis finds a proposed cut does constitute discrimination, the cut may just be restructured, rather than rescinded.

But service cuts cause much more serious environmental and social harm than a transit expansion. Thus, they should be subject to a review process that’s at least as stringent. A thorough analysis of a proposed cut’s impact on automobile vehicle miles traveled (VMT) and associated costs – such as fuel, maintenance, crashes, congestion, and emissions – would be a start. A more sophisticated process could extend beyond VMT analysis to also look at trips that simply wouldn’t happen if a proposed cut to transit was carried out, and the lost wages, time, and other adverse economic impacts that would result.

A more stringent review process protecting against transit service cuts could lead to numerous positive impacts for the public, including:

• The costs of the review process could discourage officials from defaulting to transit service cuts and instead seek less harmful ways to balance the budget.
• To create some middle ground, officials could streamline the environmental review standards transit expansions are held to, lowering those expansions’ costs and making them a more attractive recipient of future stimulus funds
• In the long term, officials could analyze the reviews to quantify the level of transit service needed to provide adequate connectivity to residences, places of employment, and other life needs, establishing a sustainable transportation equivalent to automobile level of service (LOS) metrics.   

Align transit and land use to meet peoples’ needs: Service cuts are a form of corporate downsizing – transit officials hope to reduce costs while minimizing losses to revenue. Though systems are typically not designed to maximize ridership (such an approach would leave people who live in outlying areas without sufficient service), officials often cite ridership numbers when attempting to justify cuts. 

However, cuts make transit less competitive with other transportation options, causing ridership – and revenue – to decline sharply. As a result, transit providers often fail to achieve their budget-balancing goals through downsizing and may even resort to further cuts, furthering a destructive cycle.

Fortunately, there is a better option – strategies that boost revenue with only nominal effects on costs, in effect reducing the subsidies needed to provide transit service. There are two, interrelated ways of doing this: re-aligning transit networks to better match modern-day demand and adjusting land use policy to better integrate transit systems into the neighborhoods they serve.

Numerous regions have redesigned their bus systems in recent years, making them a more convenient way to get around amidst an increasingly competitive transportation sector. A recession would further push localities, especially those that have not yet pursued system redesigns, to re-discover the role of their transit systems:

• Serve more than just 9-to-5 commutes: One of a transit system’s tasks is to move day-shift commuters from residential areas to employment centers in the morning, then back in the afternoon. However, such trips are just a portion of the connectivity people need. Across industries, workers’ shifts start and end throughout the day and night, and everyone also has 24-hour-a-day lives that involve a lot more than just their jobs. During a recession, when a relatively high portion of the population may be out of work and require transportation primarily for errands and their job searches, non-workplace connectivity is particularly essential.  
• Keep up with expanding metropolises: Excessive sprawl presents a litany of challenges for transit providers. Perhaps the most pressing of these challenges is that if a metropolitan area expands outward, but the transit system doesn’t expand with it, the system will serve a smaller portion of peoples’ travel needs, leading to a decline in ridership even as population expands. Requiring new development projects to incorporate adequate transit connectivity, perhaps through a mechanism such as the sustainable equivalent to automobile LOS described above, would help mitigate this challenge and sustain revenue.
• Put efficiency ahead of trendiness: In response to the rise of ride-hailing apps, a number of transit providers have made efforts to incorporate technology-based transportation into their systems. Some have directly subsidized certain types of trips on external ride-hailing networks, while others have started up their own internal app-based van services. In several cases, however, these programs have come at the expense of continuing or improving fixed-route bus service. Given that even the lowest-performing fixed routes typically move more people than ride hailing-style replacements for those routes, transit providers should thoroughly consider impacts to ridership and revenue, looking at alternative approaches (such as simply tweaking the alignment and stop locations of coverage-oriented fixed routes to provide more effective mobility) rather than blindly trying to keep up with ever-changing transportation trends.  

A transit system’s performance is influenced not just by the alignment of its routes, but also by the built environment that surrounds those routes. The adverse effects that common zoning regulations such as restrictions on height, use, and density, as well as parking minimums and car-based impact fees, have on transit ridership and revenue are well-known. Re-thinking these regulations helps broaden a system’s ridership base and, accordingly, its farebox recovery. In some cases, a transit provider can redevelop land it controls and even capture some of the value a system’s connectivity adds to the development projects surrounding it, further reducing the need for taxpayer subsidies.

More subtle tweaks to the built environment also can greatly increase the usefulness and performance of a transit system. Such tweaks include low-cost improvements to the places where riders board transit, such as installation of benches, shelters, and real-time arrival information, as well as ensuring people have safe, direct ways to walk or bike to transit stops.   

Act in the interests of people who ride transit: Public transportation agencies find themselves so vulnerable to short-term trends in part because some of the officials who govern our systems rarely ride them, and thus may not fully understand the role of transit connectivity in a person’s life. Given the power they have over an agency’s budget, such officials may be quick to resort to a service cut not because it furthers the system’s interests (as mentioned earlier, cuts are at best only a stopgap solution to an agency’s underlying financial problems) but rather because their power allows them to check a box that satisfies other, non-mobility interests.

Transit providers could address this issue by restructuring their boards or other means of governance to better represent riders. When budgetary challenges arise, rider-representative leaders would be more likely to focus on addressing the systemic issues that underlie funding shortages, rather than just cutting service. Also, to the extent that any changes affecting transit riders are necessary, such leaders would strive to implement them in a more equitable and user-friendly manner – for example, implementing a fare increase without making rider-hostile changes to the overall fare structure such as eliminating inter-route transfers. 

A transit-focused stimulus would make long-term life better

The benefits of preserving and improving transit service through a short-term recession would extend beyond just the immediate connectivity that service provides.

Good transit service makes it easier for people to access jobs, employers to recruit workers, and businesses to attract customers. All of these interactions help stimulate the economy, helping offset the negative effects of a broader downturn. In addition, for each new car people don’t feel compelled to purchase due to availability of better mobility options, more than $9,000 per year is freed up for people to spend in their communities, providing a boost for localities big and small, urban and rural.

Good transit service also represents a basic regard for life. Car crashes are not only lethal to people in vehicles, but also to people on foot or bicycle that have to share the streets with them.  Accordingly, minimizing the need to use and interact with cars gives people an opportunity to avoid this danger and maximize their contributions to the world.

And finally, good transit service today will help us sustain our civilization. If climate change is allowed to proceed unabated, the resulting harm to our economy and quality of life will eclipse anything our society has experienced in recent memory. Transportation is the U.S.’s biggest source of greenhouse gas emissions, and automobiles the biggest contributor to that source, so sustaining and bolstering transit – and the superior connectivity it provides – is perhaps the best way to reduce those emissions.