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Conditions and Performance Report
Appendix H—The Costs and Benefits of Transit

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Operating Costs by Policy Function

Benefits by Policy Function

 

The three public policy functions served by mass transit in the United States are described in Chapter 2. These functions are: basic mobility, providing mobility services to the poor and elderly; congestion relief, helping to alleviate automobile congestion on crowded urban expressways and arterials; and location efficiency, enabling urban residents to live in high density, mixed use developments without dependency upon auto transportation.

Operating Costs by Policy Function

The cost of a particular transit trip depends on a number of variables. The most important factors include:
1) Time of day (peak or off-peak)
2) Vehicle type (bus or rail)
3) Trip distance.

Exhibits 2-16 and 2-17 show how the trips under each of the three policy functions vary across each of these factors. This variation can be combined with estimates of the contribution of each of the three cost factors to allocate transit operating costs by policy function. Exhibit H-1 illustrates the relative contribution of each of the three market niches to transit costs by time of day in 1995. Transit services for the 34.7 percent of trips filling congestion relief roles (those made by above-poverty households with cars) account for 47.6 percent of costs. The basic mobility trips (40.1 per-cent) incur 33.0 percent of operating costs, while the like figure for the 25.3 percent of trips made for location efficiency is 19.4 percent. This cost pattern reflects the emphasis that most transit systems place on providing a means for commuters to circumvent congested highways.

Exhibit H-1. Transit Function Costs by Time of Day, 1995

Exhibit H-2 shows the costs by transit policy function remaining after the subtraction of fare revenues. This procedure provides an estimate of the subsidies that local, State, and Federal taxpayers provided to local transit operations in 1995. The greatest subsidies are incurred for congestion relief, where 56.1 percent of public subsidies were incurred in 1995. The 40.1 percent of basic mobility trips accounted for only 28.8 percent of public subsidies. Similarly, 25.3 percent of location efficiency trips incurred 15.1 percent of public subsidies.

Exhibit H-2. Transit Subsidies by Function and Time of Day, 1995

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