The ubiquity of urban sprawl, congestion, and pollution have brought about massive federal subsidies of public transit systems in US cities. The recipients of the subsidies, however, have not always produced the most efficient transportation systems. The public transit systems in New York, Atlanta, and D.C., for example, are drastically less efficient in terms of ridership, externalities (traffic), costs, and size than those of Western Europe. A \$132 million streetcar project in D.C. promises to increase traffic congestion (because trolleys will share the street) and travel at an average of 12 mph along the 2.4 mile route. Compare this to Cleveland's 6.8 mile rapid transit bus system costing $50 million. The picture only gets worse considering the bus system in D.C. runs the same routes as the trolleys at a higher speed, lower cost, and greater passenger capacity. Something is not right.
Considering the incredible inefficiencies in the public transit system, some have argued that public transportation should not be so heavily subsidized by the government. More efficient systems develop when they sustain themselves through user revenue (e.g. subway or bus fares). However, the extremely high fixed costs of public transit systems and extremely low marginal costs tell us that user fares, presumably equivalent to marginal costs, would simply not generate enough revenue to be sustainable. Price discrimination, in which the poor pay less than the rich per ride, might be one way to solve the problem, some suggest. Regardless of the public-private debate, local government officials must create more effective, efficient systems considering externalities, realistic ridership rates, and substitute goods. Unfortunately, doing this might prevent them from receiving targeted federal subsidies of particular transit systems (that are often inefficient) like the one in D.C.
Emma Catlett
Sources:
http://www.economist.com/news/united-states/21611123-federal-subsidies-have-inspired-some-silly-transit-projects-rolling-blunder
http://www.businessinsider.com/the-right-way-to-subsidize-public-transit-2013-4
Considering the incredible inefficiencies in the public transit system, some have argued that public transportation should not be so heavily subsidized by the government. More efficient systems develop when they sustain themselves through user revenue (e.g. subway or bus fares). However, the extremely high fixed costs of public transit systems and extremely low marginal costs tell us that user fares, presumably equivalent to marginal costs, would simply not generate enough revenue to be sustainable. Price discrimination, in which the poor pay less than the rich per ride, might be one way to solve the problem, some suggest. Regardless of the public-private debate, local government officials must create more effective, efficient systems considering externalities, realistic ridership rates, and substitute goods. Unfortunately, doing this might prevent them from receiving targeted federal subsidies of particular transit systems (that are often inefficient) like the one in D.C.
Emma Catlett
Sources:
http://www.economist.com/news/united-states/21611123-federal-subsidies-have-inspired-some-silly-transit-projects-rolling-blunder
http://www.businessinsider.com/the-right-way-to-subsidize-public-transit-2013-4
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