Some months ago, I wrote about the deterioration of the Boston area transit system, linking to an article I published in Commonwealth Magazine. We are now witnessing the sequelae of the syndrome I presented there. The Boston Globe reports that the MBTA is seeking major fare increases and service cuts:
The MBTA would raise subway fares by up to 70 cents and dramatically cull bus routes, eliminate ferries, and end weekend commuter rail trains under a plan unveiled yesterday to help erase a projected $161 million deficit.
To be fair, this is not just about Boston. The New York Times recently published an article entitled "The Recession Squeeze on Buses and Trains", documenting similar problems in lots of places. About Boston, the Times noted: "[R]idership is up, but so is debt; last year, virtually every dollar paid by riders went to debt service."
It is a mistake, though, to link these problems with the recession. There are long-lived structural issues at play.
A friend has helped me review the MBTA’s most recently reported statistics (for 2010) to the National Transit Database. These numbers demonstrate that fares collected per boarding (column 1) generally do not cover even the direct vehicle operations plus maintenance costs per boarding (column 2). Those costs, by the way, exclude the amounts needed to maintain fixed infrastructure and cover general and administrative categories.
Now, these are average costs, and it is harder to estimate the marginal costs of an additional trip; but there is every reason to believe that those marginal costs exceed the marginal revenues received per trip. In other words, an increase in ridership may actually cause the system's net income to fall. This is a terrible vicious cycle for a transit system.