Fixing the mass transit crisis

A bailout + reform strategy

It’s Tuesday and while I don’t want to forget to encourage you to subscribe during our trial period — the annual price will rise to $90/year starting next week I also did want to pay it forward a little bit by recommending some other recent Substack content I’ve seen.

Peter Beinart’s piece on the intellectual climate among his generation of center-left foreign policy wonks is excellent. I hope that you read it. Even more so, I hope that Anthony Blinken and Michèle Flournoy and Jake Sullivan and everyone else working on national security for Joe Biden reads it.

I’m also happy to announce that Slow Boring is now set up with a discount rate for groups of four or more and a discount rate for students and educators. If you lead an institution that might be interested in a bigger bulk discount for a larger group then please contact me and let’s discuss it.

Now, on to the main event — the crisis in American mass transit, where the pandemic created budget problems that are going to lead to huge service cuts that will prevent ridership from recovering even as the pandemic abates.

The pandemic hammered mass transit

Big mass transit systems are overwhelmingly geared toward bringing commuters into the central business district.

The nexus between transit and thriving central business districts is in my view somewhat underrated by the current crop of American urbanists in terms of their forward-thinking ideas. But one way or another it’s a fact of life. And the Covid-19 pandemic has absolutely hammered central business districts. The first blow is that a huge share of white collar office workers have been working remotely. Those are exactly the jobs that tend to disproportionately concentrate in CBDs, and thus disproportionately drive transit ridership. But it’s worse than that, because CBDs also contain tons of blue collar employment that can’t be done remotely but that implicitly depends on the presence of white collar office workers to make sense.

That’s janitorial services, but also coffee places and lunch spots. It’s bars where people go for happy hour. But it’s also just regular stuff like a CVS or a dry cleaner or a haircut place. All of those kinds of places have taken a huge hit to demand, lots of them have closed, and plenty more are operating on reduced hours and staffing levels.

Those blue collar CBD workers are in some ways the core constituents of mass transit, and there are many fewer of them along with fewer white collar commuters.

Then on top of that there’s the perception that transit is especially dangerous during the pandemic. Back in March, Greater New York City was a huge outlier in terms of Covid and it’s also of course a huge outlier in terms of mass transit usage. That created an association in many people’s minds between transit and the pandemic, an association that was further exacerbated by a piece of sloppy but widely circulated research blaming the subway for the pandemic. That was a double tragedy, both fueling complacency in the bulk of the United States where nobody rides transit and further suppressing transit ridership in transit cities.

The result of all of this is that ridership, and thus farebox revenue, have collapsed even at a time when additional cleaning protocols and such have increased costs. Now to plug those costs, transit agencies are talking about huge cuts.

We’re facing a service/ridership death spiral

The CARES Act helped transit agencies maintain service during the peak pandemic months. But it expired months ago, and it’s not clear any new help is on the way. So cuts are coming now or being scheduled for early next year:

The perversity of this is that vaccinations are going to start literally this week.

It will take months until everyone is vaccinated, but simply reaching health care workers and people in nursing homes will greatly reduce the IFR of the virus and make it much safer for society to let people go about their business. So the uptick in activity should start happening very quickly, even in advance of full vaccination. We should expect demand for going to CBDs to recover steadily through the first half of 2021 and essentially normalize by summer.

But if you drastically reduce the quality of transit service, then even if demand for CBD-going recovers many fewer people will use transit for their CBD-going needs.

And it gets worse. The DC proposal, for example, essentially involves turning Metro into a commuter rail service. That means it’s not really going to make sense for a middle class person to decide they’re going to forego car ownership because they live near a Metro station. And once you incur the expense of buying a car, securing a place to park it, and commit to paying insurance then it’s generally appealing to drive the car a lot rather than relying on transit. That’s particularly true if the transit is coming less frequently.

That becomes a death spiral — falling service quality reduces ridership which reduces revenue which reduces service quality. In a place like DC that means much worse traffic congestion and more pollution. In New York it to an extent calls into question the viability of the metro area at its current scale.

We need bailout and reform

As I’ve been emphasizing, right now the federal government can borrow money for less than the rate of inflation. Under the circumstances, there is no reason to let something as socially damaging as the unraveling of major cities’ mass transit systems happening when it could be fixed by sending them some money.

A federal bailout would cost, in essence, nothing and the social benefits even to people who don’t live in the impacted cities would be more than zero.

But politics being what they are this seems unlikely. Not only is the senate controlled by Republicans, the map is massively tilted against the interests of big cities.

What’s more, critics will say with evidence behind them that these agencies have plenty of bloat in them. Here in DC, for example, Metro is designed for the trains to be operated automatically. But ATO was turned off in 2009 after a crash that wasn’t even the fault of the ATO system, and somehow over ten years later it’s not back in automated mode. In New York, the MTA uses two-person crews to operate the subway when basically every comparable system in the world gets by without conductors.

The problem with proposing waste-reduction as a solution to budget crisis is that it doesn’t work fast enough. But as Daniel Trubman says, the problem with not cutting waste during a crisis is that when it’s not a crisis the agencies don’t reform.

But this is well suited to a solution based on borrowing. Right now, a federal 10-year bond trades for less than 1 percent interest rate. Congress could create a program where transit agencies can borrow money from the federal government at 1 percent interest, and pay it back over 10 years with reforms to operating practices. That would score as reducing federal debt, it would save save cities from drastic transit cuts, and it would led reforms flow forward in a sensible way. Of course somebody would need to supervise the program to make sure the reform plans are credible, and to make it work as part of a bipartisan deal I’d suggest putting Elaine Chao — a veteran transportation official who happens to be married to the senate majority leader — in charge of the whole thing.

It’s so crazy it might work, right?


As a postscript: On Wednesday, I’m going to be moderating a panel featuring Alon Levy, Eric Goldwyn, and Elif Ensari sharing some of the early findings from their ongoing research project on mass transit construction costs.

I’ve written a lot about this issue over the years, largely inspired by Alon’s work, but what people really want is answers. And fortunately now they’ve hooked up with Eric and Elif and got funding together to do a proper big study of the question.