Friday, November 7, 2014

Costs and Subsidies of Transportation

The costs of transportation include many subsidies for public transportation, ranging from 75% subsidy - so the user pays only $2 of the $8 cost of a bus ticket - to over 90% - the $10 cost to ride a light rail costs the user only $1.  Subsidies include the cost of parking and road maintenance.

Green house gas emissions and fuel economy are about the same per passenger mile for cars as for public transportation.  Air pollution per passenger mile from cars is about double that of buses

None of this should be taken to mean I am against public transit or opposed to subsidies.  I am for both, but we should be aware of what are the true costs and revenue sources.  Wild claims that one form of transportation is subsidized and the other isn't are obviously false and help no one.

Subsidies for Public Transit:

One source claims that: "Most (public) transit systems in the United States have fare box recovery ratios between 25 and 35%. BART in the San Francisco Bay area is an example of a relatively high fare box recovery at almost 66%".

So typically, 65% to 75% of public transportation costs (buses, commuter trains) are subsidized.  If people had to pay the true cost of taking a bus, about $8 per ride, ridership would fall resulting in more congestion which is why people consistently vote to subsidize public transportation that they themselves don't use.  CA's subsidies for public transportation are the second highest in the country after NY's.  In LA, 67% voted for massive expenditures for public transport - most significantly, a metro-sized subway.  Most subsidies come from sales taxes in CA though other states use other taxes.


Another source gives the following table - note the "% Subsidy" on bottom row (click on table to enlarge):
(page 24: )
So if the bus fare is $2, the total cost including subsidies is about $8.

There are other indirect subsidies such as public parking, wheelchair access to buses, etc.  They have been quantified as well (click table to enlarge):
(page 75 )

Overall these come to about $0.20 per passenger mile for cars, and about $0.34 per passenger mile for buses.  Most of the subsidies for buses are direct while those for cars are indirect (economists call these "externalities") such as noise, roadway land value, pollution, etc.  Some of public transport subsidy is for social equity.  The air and water pollution from cars averages about twice that of buses.

Society collectively spends to help those needing transportation but unable to provide their own.  (click graphic to enlarge):
Clearly, buses make the most sense during peak hours.  A dedicated bus lane that only operated during peak periods would provide the most benefit with the least cost.

Above tables and charts are from

Sources of Subsidies:

Federal and state gas taxes pay for interstate highways.  Since trucks from out of state pay those taxes they also pay for the interstate highways they travel on.  Weight fees are collected on trucks in CA and when they enter CA since heavier trucks do more damage to roads.  That amounted to roughly $1B in 2013-2014.

The CA state base tax of 4.75% on gas is allocated to public transportation:

$0.58 of gas taxes are collected on every gallon of gas to pay for transportation.

By CA Prop 42 passed in 2002, 20% of gas taxes pay to subsidize public transport.  Another 40% pay for general roads, the remaining 40% go to local govt's for road and local transport costs.,_Allocation_of_Gas_Tax_Revenues_(March_2002)

CA raises and spends about $15B for transportation (including buses, and rail) of which $6B comes from gas taxes. (click on graphic to enlarge)

Part of the state retail sales tax is dedicated to reimburse local govt for public transit including bike paths.

C.f. "Financing Transportation in California: Strategies for Change" at

Fuel Economy:
  1. Plug-in hybrid  - 111 person-miles per gallon
  2. Passenger train -   72 p-mpg
  3. Airplane           -   43 p-mpg
  4. Bus                   -   38 p-mpg
  5. Car                   -   36 p-mpg
Avg. car ridership is around 1.6 so p-mpg is higher than vehicle mpg.  Buses make a lot of empty or mostly empty trips because many runs have to be made in off hours or people won't take the bus during rush hours, since they often need to be able to stay later than rush hour.


Green House Gases and Pollution:

(from page 55 of )

So on average, the GHG emissions per person-mile are about 17% higher for buses as for a passenger car.

On a vehicle basis, cars are less polluting than buses, but since buses average about 6 times the passengers, they end up about equal.  Obviously hybrid cars and buses are better than standard ones, and all-electric vehicles charged from solar or wind-generated electricity are the cleanest of all.

"One study found ... that each 1% increase in density increases transit ridership by 0.22% (PBQD 1996). Destination density (e.g., clustering of employment) tends to have a greater impact on transit ridership than residential density." (click on table to enlarge)
(page 21 )
Since the population of the El Camino cities for BRT (Santa Clara, Sunnyvale, Mountain View, Palo Alto) is less than 500,000 we will likely be limited to about 5% to 6% of residents using the bus.  That is a maximum since some people already take the train which counts in that 5%


Public transport is subsidized around the world and in the US.  Some forms are so heavily subsidized they might as well be free.  In some very heavily congested areas they are free.  The relief of traffic congestion makes it worhtwhile to make it free for all in congested urban areas with side benefits of reducing road improvement costs, reducing pollution, and speeding boarding times.

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