IMPROVING PUBLIC TRANSPORTATION IN A CHANGING FINANCIAL ENVIRONMENT

Rapid cost escalation of transit operations, decreasing willingness and ability of state and local governments to meet subsidy demands, and a leveling or decline in ridership have caused transit fare increases and reduced service. Since almost 80% of operating expenses go to wages and fringe benefits, increased productivity offers the only real source of cost control. It is suggested that public transportation, rather than public transit, be considered the problem and more cost effective ways of providing such service in urban areas be sought. Alternatives already being utilized are: (1) Contracting for services by private operators at lower cost; (2) individual political jurisdictions opting out of areawide compacts to provide cheaper services; (3) Amending monopoly operating rights of transit agencies and taxi operators to allow competition; (4) User-side subsidies; (5) Subscription commuter bus services; (6) Promotion of ridesharing; (7) Fostering private sector financing roles. Changes in institutional and political arrangements in many areas are important in achieving results.