CONTENTS

Introduction
Why Think About It
What Would It Cost
What About Transit Riders Who Cannot Drive?
What About Transit Riders Who are Not Low Income?
What About Traffic?
Who Else is Talking About It?
Where Do We Go from Here?

INTRODUCTION

Our recent Heartland Institute thought piece op-ed "Why Not Just Buy Them Cars" has generated considerable interest.

To provide the requested additional information, this "Frequently Asked Questions" page is being developed. In "Why Just Not Buy Them Cars" we theorized that it might be worth thinking about to provide all low-income transit riders with cars than to continue to subsidize public transit in the United States. The principal purpose of such a program would be to expand the economic opportunities available to lower-income citizens, toward the purpose of facilitating early entrance to the economic mainstream. This might thus be characterized as the "Greater Mobility Opportunity" program.

WHY THINK ABOUT IT?

There are at least two related reasons to consider providing automobiles to low-income transit riders. The most important is introduced above --- that automobility improves employment opportunities and the prospects for entry into the economic mainstream for low-income households. This will be discussed in greater detail below. But first, there is the issue of transit's exorbitant costs.

1. Transit's Exorbitant Costs:

Transit expenditures have risen far beyond inflation in recent decades, but ridership levels are little changed. Since 1970, the nation has expended more than $0.5 trillion on transit subsidies, and now spends more than $25 billion each year (2002$). This is up from approximately $10 billion in 1970. Since that time, the number of people commuting to work by car has increased more than 50 million daily, while the number of people using transit to get to work has fallen 800,000. Transit's share of work trips has fallen nearly one-half.

To say that we have not received value commensurate with our investment would be an understatement. There was a time (1960s) when the cost per passenger mile of transit was less than cars. Today, it is nearly four times as high. A principal reason for transit's cost escalation has been the fact that it is provided as a government monopoly. In other transportation industries, deregulation and other competitive influences have actually reduced costs per passenger mile. But this has not been possible in the non-competitive environment of transit. So the first reason for the Greater Mobility Opportunity program is that the present system is too expensive. Transit as it is delivered in the United States is broken and it is time to think about reforms.

2. Low-Income Mobility:

There is a more important reason, however. A principal purpose of transit is to provide mobility to people who do not have access to cars for their trips, principally due to low-income. The share of transit riders falling into this category has been estimated at 70 percent. With transit cost escalation consuming nearly all of the new subsidies, transit service levels have been expanded far less than they should have been. This has left low-income citizens, especially in the inner cities, with less service and fewer opportunities to seek employment throughout the urban area or to shop at less expensive stores. Moreover, unemployment rates are high among African-American and Hispanic citizens, who represent a disproportionate share of low-income people. Research has demonstrated that better access to employment opportunities increases incomes. Further, a report by Steven Raphael and Michael Stoll of the University of California-Berkeley suggests that nearly one-half of the unemployment gap between African-Americans and Non-Hispanic Whites would be eliminated if cars were available to all. For decades governments have been seeking to reduce disproportionately high minority unemployment. Raphael and Stoll show us a way.

To be effective, an urban transportation system must take people from within walking distance of where they are to within walking distance of where they want to go. Walking distance is usually considered to be no more than one-quarter mile for most people.

Automobiles perform this task well. In the modern urban area, with its dense network of streets and highways, the automobile can take people from within walking distance of anyplace to within walking distance of any other place.

But transit is different. Only a small percentage of streets are served. For example, in the Portland, Oregon area, with one of the nation's best transit systems, there is transit service on less than 20 percent of street mileage.

But there is another complication. Transit routes provide mobility only along a particular narrow corridor. To reach any other part of town requires transferring to another route. The time to transfer from one route to another can consume one-half of the average automobile work trip travel time (approximately 25 minutes). This means that people captive to transit have far fewer mobility opportunities. At average peak hour speeds, an automobile commuter can expect to drive to within walking distance of five to ten times as much of the urban area as a transit commuter. And, it takes longer to reach this smaller area on transit. Average work trip travel times are nearly twice as long on transit.

This is a particular problem for low-income citizens who live in inner cities. Transit systems provide good access to downtown jobs, but little to the great majority of jobs that are not downtown. A Federal Transit Administration study showed that lower-income citizens in the Boston inner city could not reach fast growing suburban employment centers by transit.

WHAT WOULD IT COST?

Of course, the whole exercise was characterized as a "thought piece" right from the beginning. The starting point is the fact that transit costs per passenger mile are now more than 3.5 times as high as automobile costs per passenger mile. That, alone is justification for thinking about it. But it also happens that the numbers might also work, as is shown below.

The preliminary estimated costs are shown in the following table:

Projected Cost Table

Two alternatives are reviewed in the table referenced below. Each alternative assumes that the user would pay an "in lieu of fare" fee equal to the average transit fare per passenger mile (the amount currently paid by users).

1. Car Sharing:

Presently "car-sharing" programs are underway in a number of cities. Data from the Portland, Oregon system was used in this analysis. That program currently advertises options for using cars for from $0.24 to $0.27 per mile for cars purchased new. This includes all costs --- the car, insurance, repairs, fuel and a 24-hour assistance program. Car sharing works best in high-density urban core areas, where coincidentally, so many low-income transit riders reside (in fact, research indicates that most low-income trips outside urban cores are already by automobile). The cost per passenger mile of the Car Sharing Alternative (Alternative 1) is estimated at $0.27, which would require a subsidy of under $0.09 after the user (in lieu of fare) payment. The gross public cost would be $2.7 billion, leaving a transit subsidy surplus of more than $22 billion.

2. Leasing:

Programs could be established to lease quality subcompact cars averaging five years of age, and to lease them to eligible recipients. To people used to buying new cars every few years, this may sound like a "second-class" approach. But, in fact, the average US citizen does not drive a new car, and the average age of the automobile fleet in the United States is now approximately nine years. The cost estimated shown on the table are based upon a program that would purchase quality used subcompact cars and lease them to recipients. The cars would have air conditioning and AM-FM stereo radios. The average age of the fleet is assumed to be approximately five years. The Greater Mobility Opportunity program could use newer cars, but that would cost more. Or, it could use somewhat older cars, reducing costs further. This alternative could be used for all of the system, or used only where car sharing is not feasible. The cost per passenger mile of the Leasing Alternative (Alternative 2) is estimated at $0.44, which would require a subsidy of under $0.25 after the user (in lieu of fare) payment. The gross public cost would be $8.3 billion, leaving a transit subsidy surplus of more than $16 billion.

Optimal Combination

The final adopted system in an urban area could be a hybrid of car-sharing and leasing. Car sharing could be used where population densities are high enough. Leasing could be used where densities are not high enough for car sharing.

WHAT ABOUT TRANSIT RIDERS WHO CANNOT DRIVE?

Currently urban areas around the nation provide paratransit (dial-a-ride) service for riders unable to drive a car, especially elderly and disabled citizens. These services could be expanded to provide service to regular transit riders not able to drive. After deducting the Greater Mobility Opportunity program cost is deducted from the present transit subsidies, enough would be left over to expand paratransit services by more than 10 times.

It might also be necessary to expand school bus services. The great majority of school trips are on school buses already, not transit. In fact, every school day, school buses carry at least 50 percent more riders than all the nations subways, buses, commuter rail and light rail systems combined. The additional school bus services would cost little in relation to the newly freed subsidy funding from the Greater Mobility Opportunity program.

WHAT ABOUT RIDERS WHO ARE NOT LOW-INCOME?

Transit riders who do not qualify as "low-income" would pay the full cost of their rides. This would mean that the large subsidy supported transit agencies would have to survive by bringing their costs under control. There are a multitude of examples around the world of competitive mechanisms that have been used to reduce transit costs. London, for example, reduced its costs per bus mile by 50 percent over 15 years, with improved service and the highest ridership in recent decades. The well patronized transit services to strong downtown cores, like Manhattan, Chicago, San Francisco and elsewhere would become substantially less expensive and fare increases could be minimal or even not required. Poorly patronized services would need to be discontinued. The few riders on these discontinued services would add little traffic to roadways. Some riders would thus need to switch to their cars, but that would not represent an overwhelming traffic burden, as is discussed in "What About Traffic."

WHAT ABOUT TRAFFIC?

Many of the questions about the Greater Mobility Opportunity Program relate to traffic. Indeed, the some have expressed concerns that billions would be required to pay for new highway capacity. But there is no such risk. Randal O'Toole and I published a report for the Heritage Foundation early in 2004 documenting the fact that transit has little impact on traffic congestion.

There are, of course exceptions, such as the corridors leading to the strongest downtown areas, such as in Manhattan, Chicago and San Francisco. But the high transit demands in these few corridors, combined with cost reductions by newly commercial transit agencies, would be likely to keep transit market shares high and minimize traffic impacts.

A large share of the new low-income automobile use would be from the core cities to jobs in the suburbs. There is generally more free capacity for these reverse commute trips, so it is likely that the new travel by low-income people would create little requirement for additional roadway expansion. This is illustrated by the fact that only in the New York City area is the share of travel by transit more than five percent. In most places it is less than two percent.

Finally, concerns about highway cost expansion projections lead to a crass implication is that low-income citizens should be denied opportunity to keep traffic congestion from getting worse. I could not disagree more strongly with this view. If more traffic congestion is the price of greater opportunity, then so be it. Moreover, as indicated above, comparatively little additional highway investment would be needed.

Reference:

The Contribution of Highways and Transit to Congestion Relief: A Realistic View

WHO ELSE IS TALKING ABOUT IT?

Our article appears to be the first broad description of how such a program might work and to show its potential cost effectiveness compared to transit, similar concepts have been previously advanced. Notable examples are the Progressive Policy Institute (affiliated with the Democratic Leadership Council), the Brookings Institution and the Clinton Administration.

The Progressive Policy Institute put the issue succinctly:

In most cases, the shortest distance between a poor person and a job is along a line driven in a car. Prosperity in America has always been strongly related to mobility and poor people work hard for access to opportunities. For both the rural and inner-city poor, access means being able to reach the prosperous suburbs of our booming metropolitan economies, and mobility means having the private automobile necessary for the trip. The most important response to the policy challenge of job access for those leaving welfare is the continued and expanded use of cars by low-income workers (Margy Waller and Mark Alan Hughes, "Working Far from Home: Transportation and Welfare Reform in the Ten Big States," Progressive Policy Institute, August 1, 1999).