Operating Costs and Performance of American Public Transit Systems

The escalation of operating costs is threatening the existing level of transit service in the U.S. Over the last two decades, lengthening passenger trips, as a result of suburbanization and lower development densities, have been a major factor influencing increasing costs per passenger. Over the past decade, the cost of operating transit service has risen 148%. Since operating revenues have not kept pace with costs, transit subsidies have grown even more rapidly than operating costs. The following have been major factors in the rapid rise of operating costs: 1. Labor compensation has grown faster than the cost-of-living, without any increase in average productivity. Labor is the major component of transit operating cost, accounting for over 80 percent of the total. 2. There has been a state of inflation in the U.S. economy. 3. Public transit activity has been concentrated in the largest and most expensive cities. The paper concludes by summarizing approaches which could be used to help control costs.