Cost of a Ride

Problem: High costs and low ridership are the bane of fixed-guideway transit investments. The net capital and operating cost per passenger mile of recent investments ranged from $0.22 to over $10 in 2008. A better understanding of characteristics of the most successful transit investments can help inform future investment policy and improve the performance of existing transit systems. Purpose: We evaluated the ridership, operating costs, and capital costs of recent transit investments and identified job and population densities that can support more cost-effective fixed-guideway transit service. Methods: Combining investment and station-level data from over 50 American fixed-guideway transit investments with time-series data on 23 transit systems and surrounding land uses, we modeled the influence of job and population densities on transit ridership and capital and operating costs. Based on these results, we estimated the marginal costs per passenger mile of increasing transit ridership through system expansion, increased service, and decreased fares. Results and conclusions: Controlling for neighborhood, regional, and transit service attributes, population and job density are positively correlated with both ridership and capital costs. As density increases, so do capital costs and ridership. Density, however, has an inverse relationship to capital cost per rider and total costs per passenger mile. Higher densities tend to improve transit's cost effectiveness, in spite of higher capital costs. Takeaway for practice: Job and population densities around transit stations are frequently below minimum thresholds needed for cost-effective transit investments and operation. This contributes to high costs per passenger mile on many transit systems. We generate density guidelines for cities and towns to use as a point of comparison and a potential target for zoning around existing and proposed transit stations based on actual or projected capital costs. Research support: This project was supported by a grant from the University of California Transportation Center.