Coronavirus May Have a Lasting Impact on Public Transit Funding

Ridership is likely going to plummet, which will make it harder on local transit agencies
March 10, 2020, 5:33pm
Woman wearing mask in NYC subway
Bloomberg / Contributor via Getty Images

Coronavirus is beginning to upend American life. The stock market is crashing, universities are cancelling classes or moving them online, conferences are being canceled, and airlines are struggling. Unsurprisingly, public transportation is also going to be greatly impacted. It’s still early to know exactly how this will unfold, but without proper mitigation efforts from local governments, we could be feeling the effects of coronavirus on public transportation service for years to come.

In the short term, we can expect fewer people to use public transportation as part of a broader policy of avoiding public gatherings. We don’t have a great idea how most transit systems have been affected yet, because most report ridership numbers monthly and, believe it or not, we’re still really early into the US’s exposure.

But we do know this is already happening in San Francisco, where BART lost eight percent of ridership between the last week of February and the first week of March, a massive drop by public transportation standards. And it certainly stands to reason other transit systems will experience something similar, given that universities are cancelling classes and many workplaces are instituting work-from-home policies (not to mention some transit agencies themselves like New York’s MTA are encouraging people to avoid it if possible).

Taking these precautions, such as limiting public gatherings, in the name of public health is obviously worth doing. But not only must we prepare for coronavirus itself, so too must we prepare for the effect those precautions will have. And for public transportation, which is always in a financially precarious position, those precautions could really screw things up if other measures aren’t taken.

We’re talking about money here. Transit agencies are going to lose a lot of money. They get most of their money from two sources: fares and government subsidies, and both could be impacted by coronavirus. Some agencies depend on fare revenue more than others. On average, fares fund 32 percent of transit operations in the US, according to the Department of Transportation, and it is almost unheard of for an agency to get more than 50 percent of its operating budget through fares alone.

To just ballpark some figures for a moment, let’s consider New York’s MTA, which estimated it will receive $6.5 billion in fares this year out of a total budget of $17 billion. An eight percent reduction in fares would result in a $520 million shortfall, which is no joke for a transit agency already struggling to balance its budget. (I know that an eight percent reduction in ridership, to use BART’s figure, is not equal to an eight percent reduction in fares, especially for the MTA where fares vary wildly between commuter rail and the subway and bus system, but we don’t have any better figures at this stage.) The story is similar around the country, where even small revenue drops of a percentage point or two often force transit agencies to make tough decisions about whether to cut service or amenities.

Transit agencies are also spending more money during the coronavirus outbreak cleaning their trains, buses, and facilities more often, which is not tremendously expensive for a few weeks, but if they have to do it for months it could add to the financial pressure.

Not only will people be taking fewer transit trips because they have fewer places they need to go, but also because the alternatives are getting cheaper. Oil prices, and therefore gas prices, are tanking. Outside of New York, where most people own cars, this will make driving even more attractive. So too will the fact that most people drive in their cars alone or with friends and family they’re regularly exposed to anyway, which has its benefits during a virus outbreak.

Of course, it’s too early to tell the magnitude of any of these shifts. But it’s likely transit agencies and their advocates will have tougher cases to make when budget season rolls around.

On average, 56 percent of a transit agency’s budget comes from state or local subsidies, according to that same Department of Transportation report—the rest comes from the federal government or is directly generated by the agency through advertising or other initiatives—and a big part of convincing politicians those subsidies are worthwhile is by demonstrating people use the system with, you guessed it, ridership figures.

So, if ridership plummets, that argument becomes harder, especially if government budgets become stressed bailing out all the other at-risk businesses and populations that need more money. When it comes to governments at all levels, transit has a long history of taking the back seat during crunch time. And if people abandon it in droves due to coronavirus, history may repeat itself once again.