Fiscal Policy

Trains in Vain: The Uncertain Outlook for Public Transit after COVID-19

A passenger waits as a New York City subway train pulls into the station in Brooklyn, N.Y., March 3, 2021. (Brendan McDermid/Reuters)
Biden is requesting $85 billion to fund public transit. Do cities actually need more trains and buses?

President Biden’s infrastructure plan proposes doubling federal support for public transit to $85 billion. The White House hopes “to modernize existing transit and help agencies expand their systems to meet rider demand.” But what if rider demand does not grow — or what if it even declines, as it has in many places? Cities with little public-transit demand will be left with onerous infrastructure that gobbles up funding from other important municipal services.

Before building more transit lines, the federal, state, and local governments must have a clear handle on future demand for transit, lest they place more financial stress on American cities.

The COVID-19 pandemic has changed the way we shop and conduct business. Using Instacart and shopping at Amazon have become commonplace for many Americans. Medical appointments have shifted dramatically to online or phone interactions. With many employees working from home, Zoom and Microsoft Teams meetings have become standard practice.

The pandemic has driven people to substitute communication technology for travel, allowing employees to move to cheaper, less crowded towns and reducing city density. This doesn’t bode well for urban transit systems, as population and job density are prerequisites for a viable transit system.

When the pandemic ends, it’s not likely that these practices will disappear. While the future is highly uncertain, there is a good chance that people will commute less and visit stores less frequently. There’s no sense in making large investments in transit infrastructure given this uncertainty.

The Federal Transit Administration data show that transit ridership is almost 8 percent below its 2014 level. Even with a very healthy economy in 2019, ridership declined in 40 of the country’s 50 biggest cities. One projection indicates that vehicle miles traveled by transit will be more than 10 percent below pre-pandemic levels in 2024.

Of course, this projection should be taken with a grain of salt. We’re living in unusual times, and any forecast is highly uncertain. But that’s the point. Why rush to make permanent, capital-intensive investments in a mode of transportation that was doing poorly before the pandemic, got hammered during the pandemic, and is forecasted to recover more slowly than other modes of travel?

In uncertain times, private businesses with money at risk frequently choose to postpone or even cancel investment projects. That makes sense: If things do sour, at least the business isn’t stuck with unproductive, unprofitable capital projects.

Politicians should use the same reasonable approach when it comes to transit investment. Since the future demand for transit is highly uncertain, and recent trends are negative, the best policy is to wait. Unfortunately, the Biden administration and other government officials don’t behave the same way as businesses.

But why? Because they’re not risking their own money. They get votes for funding infrastructure construction from groups that represent labor, and they appear to lose little if the transit cars have few passengers. They’re not held accountable by voters. So they risk — and waste — taxpayer money that could be used for other purposes.

And the risk is real. Shifts in consumer and business behavior over the past year suggest that online meetings could replace a sizeable portion of work hours. This will probably vary by firm and industry — obviously applying to white-collar jobs but not for jobs that require physical labor such as construction.

Doctors and patients have become familiar with online visits. Some people will continue to gather with family and friends online, especially for those who don’t live nearby — though it may not replace traditional Thanksgiving dinners.

Given transit’s highly uncertain and potentially negative outlook for transit demand, the president needs to act more like a company CEO than a politician and delay transit investment until a time when ridership demand is growing. Moving too quickly, based on pre-pandemic commute statistics or unreliable predictions, will almost surely make the president’s transit plan a bust.


The Latest