U.S. Transit Subsidy Policy: In Need of Reform

Public transit in the United States has depended increasingly on public subsidies since the inception of the federal mass transit assistance program in the early 1960s, and has not proved successful in countering the effects of increased automobile ownership and use and of decentralizaton of residences and places of employment.

Abstract

Public transit in the United States has depended increasingly on public subsidies since the inception ofthe federal mass transit assistance program in the early 1960s. The subsidies are associated with declining efficiency and labor productivity, as urban transit systems have overcapitalized, simplified fare structures, and extended service into sparse suburban markets. Despite these subsidies, transit has not proved successful in countering the effects on its market of increased automobile ownership and use and of decentralizaton of residences and places of employment.