Public Transit Ridership Impact Economic Development Metro Economics Essay

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This research analyzes the impact of public transit ridership on the economic development of a metropolitan area, using previous public transit ridership literature. The research will help transportation policy makers in the future, as emphasis is placed not only on ridership but also on how to run an effective public transit system in order to achieve maximum ridership. The literature established a relationship based upon increased ridership, which implies economic growth. However, transportation policy makers are advised to include efforts to increase the metropolitan area's livability.


The rebirth of public transportation is a critical part of America's future. Transit ridership is increasing dramatically primarily because federal and state investments in transit have made it possible to offer higher quality service. According to The National Business Coalition for Rapid Transit, the public clearly values public transit. In the last five years, transit use has risen 21 percent. In 2000, Americans used public transit 9.4 billion times, representing the highest transit ridership in 40 years. 81 percent of people polled link public transportation to improved quality of life, believing that increased public investment in public transportation strengthens the economy, creates jobs, reduces traffic congestion and air pollution, and saves energy (NBCRT, 2009).

In the major metropolitan areas of the country, the engines of the nation's economy, public transit is an essential transportation option that can cut through congestion to provide access to job markets and remove auto trips from the highway system, thereby helping to maintain highway capacity for the shipment of goods and material. Americans used public transit in record levels in the third quarter of 2008 according to a survey released on December 8 by the American Public Transportation Association (APTA). Despite falling gas prices, public transit ridership increased by 6.5 percent over last year's third quarter, the largest quarterly increase in public transportation ridership in 25 years. More than 2.8 billion trips were taken from July through September, rising 8.5 percent on light rail (streetcars), 7.2 percent on buses, 6.3 percent on commuter rail, and 5.2 percent on subways. The upward trend is present across the country, while vehicle miles traveled on the nation's highways declined by 4.5 percent for the same period between 2007 and 2008, according to the Federal Highway Administration. With current concerns about the global impact of modern living, gasoline price uncertainty, and increasing traffic congestion, commuting by public transit may offer some solutions. In 2007, only 5 percent of private industry workers had access to commuter subsidies (Bureau of Labor Statistic, 2009).

As Congress seeks to stimulate the economy, investment in public transit represents an important opportunity for job creation and economic development. APTA found that at least 736 public transportation projects worth a total of $12.2 billion could be initiated within 90 days of approval of federal funding. The investment would create more than 340,000 American jobs and help transit systems meet the steadily growing demand for public transportation. For a two-year period, APTA identified transit investments of $32.4 billion that would create more than 900,000 jobs. A number of studies support the value of public transit investment for job creation. A 2004 study by the Surface Transportation Policy Project (STPP) found that every $1.25 billion spent on public transit creates approximately 51,300 jobs, while the same expenditure on roads and bridges would create 43,200 jobs. On the local scene, increased ridership implies access to jobs, which denotes more funding in terms of income tax. The long-term benefits could include the possibility of the individual acquiring a property, which implies more funding for the Metro in terms of property tax. Not forgetting the fact that today's increased ridership could influence tomorrow's decisions about transportation infrastructure.

Literature Reviews

There is a gamut of literature on ridership however; I will focus primarily on those that are about fluctuations in ridership. There are numerous factors ranging from supply and demand to service fares, which have known to be a critical factor in ridership according to Kohn. Using the Canadian example, he argued that factors that affect supply and demand are complex, constantly changing, and difficult to identify and discern. For example in the 1990s, in Toronto, Canada's most populated city, subsidies fell 39 percent, fares increased 50 percent, service levels decreased 12 percent and ridership fell 20 percent. These data imply that fare increases, and subsidy and service reductions combined to produce a drop in ridership. At the same time, however, there was a major economic downturn in the Toronto region resulting in a substantial reduction in work trips (Kohn, 2000).

Other factors such as social marketing programs could be of value as information instruments in support of transportation demand management (TDM) policies. Such programs can function as an effective channel of communication in building dialog and garnering wider public support of demand management policy and in delivering important transportation messages directly to commuters (McGovern, 2005). Transportation management seems not to be considered very important when measuring ridership but according to Perl & Pucher ( 1995), referring to the Canadian experiment, recounts that a mix of policy preferences and management style makes urban transit systems more effective, in terms of offering an alternative to auto travel, but less efficient in supplying services. However, there are conflicting factors that might hinder management in the course of planning especially in a collaborative environment. When participants who favored different management styles are brought to gather, their conflictions assumptions undermine their ability to collaborate (Innes & Gruber, 2005).

Previous research has also focused on income factors. According to Hamilton, Hokkanen & Wood (2008), without public transit, many low-income people would have no means of transportation. The goals of public transit systems are diverse and go beyond moving people. However, other factors might enhance or prevent commuters from using the public transit system. Access to public transit findings suggests that self-reported walking distance to transit has a statistically significant influence in San Jose, California, but not in Buffalo, New York in terms of predicting transit ridership frequency. Drivers are more sensitive to walking distance than non-drivers are. Models estimate that in San Jose, each additional five minutes in perceived walking time to transit decreases transit ridership frequency by five percent for non-drivers and by 25 percent for drivers. Older adults are likely to ride transit more often if they are male, nonwhite, and low income (Hess, 2009).

Policy Framework

From the literature, there seems to be a relationship between transit ridership and economic development therefore, emphasis will now be placed on how to increase ridership. Public transit ridership increase could be affected both internally and externally. External factors are largely exogenous to the system and its managers such as the service area population, employment levels and growth, fuel prices, income, parking policies, residential and employment relocation. Such factors typically function as proxies for large numbers of factors to affect transit demand. Internal factors on the other hand, are those over which transit managers exercise control, such as service quality, fare levels and structures, service frequency and schedules, route design, marketing and information programs (Taylor & Fink, 2003).

Public transit ridership had been known to be influenced by various external various factors as the economy fluctuates however, soaring gas prices are pushing more Americans to take public transit, with streetcars, trolleys and other light rail experiencing a 10.3 percent increase in ridership for the first quarter of the year, according to a report released by the American Public Transportation Association. Americans took 2.6 billion trips on all modes of public transportation, including subways and buses, in the first three months of 2008, a 3.3 percent increase, or almost 85 million more trips than in the same period last year ( Sun,2008, p. A02) . Rising fuel prices over the last few years have also led to significant increases in costs for public transit agencies. As fuel prices continue spiraling upward, the added costs are a significant concern for transportation officials. A possible benefit from higher gas prices, though, is an increase in public transit ridership. As the cost of fueling a car increases, people may seek out ways to reduce fuel consumption, and one such option is public transit however, a sudden large price increase may lead to a jump in transit ridership, but will riders permanently change their driving habits, or will they eventually accept the higher gas prices and return to their old routines? To adapt to the higher gas prices, they may buy more fuel-efficient vehicles or move closer to work. On the other hand, people could start using transit after a spike in gas prices, and their habits could change permanently such that they continue using transit even if gas prices drop (Mattson, 2008).

Table B shows that gas prices went as low as $ 1.74, recording a ridership of 186,100. However, with gas prices at a maximum of $4.14, ridership increased to 254,400. This is a clear indication of how gas prices impact ridership. Transportation policy makers can predict that commuters will resort to public transit when gas prices hike. However, ridership will decrease whenever gas prices go down. Another external factor in increasing ridership is the lack of competitors. Commuters with no vehicular access will patronize the system even at a higher cost due to the fact that there are no other agencies offering better services. This does not imply a concept of transit monopoly.


The literature on transit ridership has various recommendations to address transportation policy issues ranging from current to future projects to be undertaken. One of such projects is the Suburban Access Transit Route (STAR), used by transit agencies in the Chicago metropolitan area. This project receives funding from the 2005 SAFETEA- LU federal transportation bill. STAR links the suburbs with each other, thereby reducing commuter time.

In creating new routes, public transit systems can also create new transportation corridors based on where potential riders will be. Public transportation facilities and corridors are natural focal points for economic and social activities. These activities help create strong neighborhood centers that are more economically stable, safe and productive. Transit managers should also provide compact development at appropriate densities to support transit ridership and reduce sprawl. In doing this, certain thresholds of development should be considered along transit corridors and in nodes. A gradient of densities should exist within walking radius of a transit stop, with the highest intensity of use located nearest the transit facility (La Plata Co., 2009). More so, Hamilton et al (2008), point out that in order to attract and keep riders, public transit systems have attempted to upgrade .This is very important in increasing ridership as well as reaping the full benefits of public transit system. There are numerous benefits of increased ridership. Increased ridership implies traffic decongestion and less pollution (See Table A). Nearly half of all Americans believe traffic is a serious problem where they live. Most (57%) do not feel their commute will improve over the next three years, and nearly a quarter expect to spend more time commuting. Public transportation helps to alleviate our nation's crowded network of roads by providing transportation choices. With regard to economic growth, a transit coalition report, "Dollars & Sense: The Economic Case for Public Transportation in America," found that every dollar taxpayers invest in public transportation generates $6 or more in economic returns (CFTE, 2009).


In recent years, public transportation has benefited from an increase in ridership. The correlation between increasing transit ridership and economic growth across the States has led many observers to link the two together, suggesting that more and more commuters are opting for public transportation to reap the maximum benefits as well as avoiding the high cost of gasoline.

The transit ridership literature has proven various ways through which investment in increased ridership could promote economic development. However, to achieve maximum impact on economic development, a lot depends on increasing the productivity of private firms, increasing the efficiency of public transit itself, fostering innovation, improving the quality of life and thus the supply of labor and entrepreneurship, affecting perceptions, or changing land use and spatial patterns. The historical effects of transit ridership on economic development have clearly been beneficial, but these benefits have diminished over time, whereas the costs and potential for harm have increased. If long lasting infrastructure investments are not adaptable, they will fit poorly with increasingly rapid and unpredictable change. To realize the potential for public transportation to positively influence economic development in the future, decision-making should be structured to make transportation efficient and flexible and take citizens' concerns for equity, self-determination, and stability into account.

Previous research has also proven that increased use of public transportation is the most effective strategy for achieving significant energy savings and environmental gains without new taxes, government mandates, or regulations. Emissions from road vehicles are the largest contributors to smog; currently, over 200 million passenger cars and light trucks account for about 50% of air pollution nationwide. Even at current levels of use, increased transit ridership every year saves close to one billion gallons of gasoline and reduces harmful emissions by millions of tons thereby, making metropolitan areas more livable and economically viable.