A few days ago, I was trying to take a streetcar in Toronto- and the streetcar was just as congested as any suburban arterial. The lines in front of streetcars were so long that I couldn't get into the first streetcar. Or the second. Or the third. Instead, I had to wait a few minutes (horrors!) for the fourth streetcar.
I asked myself: what if streetcars only ran every hour, instead of every few minutes? Would the streetcars be equally crowded? Of course not. People would abandon the streetcars and start to use cars (if they owned them) and buy them (if they did not yet own them).
In my experience, there is an inverse correlation between the amount of public transit service and the amount of overcrowding on trains or buses: in places with extensive service, overcrowding is a problem- but in places where public transit is limited to hourly bus service (e.g. Jacksonville, Florida) buses tend to be delightfully uncrowded, and usually I can not only sit in a seat but put my bags on the seat next to me. In three years in Jacksonville, I do not think I ever had to stand on a bus.
This methodology should tell us something about how and when we build roads. If (as I have suggested) reduced transit service means less congestion on transit, why should roads be any different?
Induced Demand
It seems like induced demand might apply to transit as well as to highways. But in a good way.