Explained: the Ever-Increasing Transit Fare

“The reason local agencies seem to need so many fare increases is that they do a poor job keeping the price of taking a ride near the cost of providing it,” writes Eric Jaffe. To further examine the gap between cost and price, Jaffe examines new data from the U.S. Department of Transportation.

After concluding that average fares per mile from 2000 to 2010 for the ten largest U.S. transit agencies didn’t change much (just a 1 percent increase a year). Jaffe then compares average fares per mile to the average cost of operating the service per mile over the same period. “In 2000, that [operating] cost was $9.05; in 2010, it had climbed to $10.82. That's an increase of 19 percent — or about 2 points a year — nearly doubling the growth rate of fares.”

In so doing, Jaffe recognizes “an ever-widening gap between what the biggest transit agencies spend running their service and what they recover from riders.” In fact, “In 2000, the top agencies recovered nearly 40 percent of their costs through fares. That figure has since dipped below 37 percent.”

Jaffe also examines the differences in fare recovery for different modes and identifies a culprit in the inability to keep costs down (hint: it’s not salaries).