THE URBAN TRANSPORTATION PROBLEM: A REEXAMINATION AND UPDATE

This chapter is concerned primarily with the comparative costs of alternative transit technologies, the technological and operating choices made by transit managers, and the lessons learned from these choices. Experience strongly suggests that policymakers and transit managers generally erred by using disproportionate amounts of available subsidy dollars to construct and operate costly and ineffective rail transit systems instead of improving bus service and reducing fares. The author of this chapter also argues that the decision to convert the largely private transit industry to public ownership and operation was a serious mistake. Subsidy dollars could have been used to pay private transit operators to provide unprofitable, but desirable, services, and the efficiency gains from private operation could have been used to buy more vehicle miles of bus service and lower fares. At the same time, governments failed to charge urban motorists prices that reflect the long-run social costs of providing highway facilities and services.