Transit Riders Save Using HugeTaxpayer Subsidies

Other People’s Money

by Randal O’Toole
posted in: Antiplanner, News commentary, Transportation

Good news! You can save money by selling your car and riding transit instead. The American Public Transportation Association (APTA) says the average person can save $8,500 a year taking transit instead of owning a car.

This is based on the AAA cost-of-driving formula, which says that driving costs an average of $0.54 cents per vehicle mile. Funny how Americans only actually spend $0.39 cents a vehicle mile, at least according to the Bureau of Economic Analysis (BEA). The difference? The BEA uses actual costs while AAA numbers are hypothetical.

So that might reduce the savings to only $6,100, which is still a lot. But the other big thing APTA is leaving out is the huge subsidies to transit. Transit subsidies amount to $0.61 per passenger mile. APTA assumed that, prior to giving up their car, the transit rider drove 15,000 miles a year. At $0.61 per mile, a transit rider who rides 15,000 miles a year gets about $9,150 in subsidies.

So you can save, maybe, $6,100 a year by imposing more than $9,100 in costs on other taxpayers. Good deal!

COST note: Using the national average of 1.6 people per car mile, the cost per car passeger mile is $0.24 instead of $0.39, which is based on one person per car mile. This means the cost of trasportation per car mile and the transit rider “savings” are much less per year than aleged by the APTA.

Assuming the transit subsidy of $0.61 per passenger mile is 70% of real costs, the total cost per transit passenger mile is $0.87 or about 3.6 times the cost per car passenger mile.

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