Success of Tollway Projects vs. Mass transit Systems

By Anonymous

Is it accurate to state that it’s easier to capture the value of saved time in a toll highway situation than in a mass transit MRT/BRT situation? If this is so, why is it so? How would this situation be mitigated?

The success of tollway projects throughout the world and the continual struggle of mass transit systems, particularly metros/subways, to operate profitably despite very high ridership suggests that it is significantly easier for the state to capture the value of saved time from drivers than riders. But why is this?

One potential explanation is that users of mass transit have lower ability to pay, and/or a lower valued of time, than drivers. Both of these are likely true, particularly in developing countries. However, although riders of public transportation have a lower value of time, they also likely have fewer alternatives. This is not to say that those with fewer alternatives should be overly burdened, but to suggest that perhaps there may be greater ability to recoup costs and thus offer a high level of service.

Another explanation is socio-political: it is not just that it is more difficult to capture value, but it is less socially and politically acceptable to do so from those who, as mentioned, have fewer alternatives. This explanation seems the most probable – just as societies today tend to have progressive tax codes and various degrees of social welfare programs, our transportation systems also reflect our collective belief on how the burden of public goods should be allocated.

Is this a situation which must be rectified? That depends. Well-funded cities have mitigated the situation by continually subsidizing the operations of transit systems, and this has worked most of the time. Yes, there is a fair bit of complaining and angst every time the subsidy hits a ceiling and fares must be raised, bringing up the question (again) about why the system must subsidized at all, but isn’t an on-going subsidy just another way of capturing value? The subsidy is funded, of course, by taxpayers – including the vast majority of riders.

For less well-funded cities, however, the answer is more complicated. If lack of stable funding is precluding a transit system from being built, and the transit system has real valuable benefits, an alternative method of funding is needed. One idea is a clearly defined municipal transit tax. This would introduce a more predictable revenue stream and thus lend support to development of a system, and if the benefits of a system are real, presumably the public will be willing to fund it.

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One thought on “Success of Tollway Projects vs. Mass transit Systems

  1. There are two other important factors that impact transit usage and willingness to pay – lack of realized time savings and underpricing of the competing driving alternative.

    In many cases, a trip on transit may not be faster than a trip by car, eliminating the time savings component of value described above. A sample commute may include driving to a station, parking, catching a train and then using another bus or train to reach the workplace. Depending on the length of each segment and transit headways, the length of the transit trip can easily exceed the length of a car trip to the same destination. More transit-oriented zoning, including higher density allowances within a 3/8 mile radius of stops, can provide substantial non-monetary support for a local or regional transit system by bolstering usage through elimination of the “extra” legs on either end of the transit trip.

    Another important consideration is the endemic underpricing of roads and parking. The subsidy buried in free or low toll road and parking capacity erodes the attractiveness of transit options. While gas, insurance and vehicle depreciation all cost money, the government consistently subsidizes passenger car travel. Implementation of a VMT and market-based parking reforms would increase the dollar cost of driving, making transit relatively more attractive on a cost basis.

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