Transit Doesn't Need to Profit

Detractors often bring up the profitability of public transit as a point against spending money on transit projects, but does transit actually need to make money? Let's talk about that.

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Ever wondered why your city's transit just doesn't seem quite up to snuff? RMTransit is here to answer that, and help you open your eyes to all of the different public transportation systems around the world!

Reece (the RM in RMTransit) is an urbanist and public transport critic residing in Toronto, Canada, with the goal of helping the world become more connected through metros, trams, buses, high-speed trains, and all other transport modes.

[dkelly]

Weird how subsidized (and free at point-of-use!) highways and roads are seen as "good" despite being massively expensive and not turning a profit whereas transit is just seen as an economic detriment even if farebox recovery is high. Neoliberalism can do weird things to thought processes.

[Jason-gqfo]

So much this, it’s so annoying that people expect it to make direct profit. Do you expect roads to make profit? It’s been proven that good infrastructure boosts the economy in so many other ways

[jan-lukas]

Here in Germany all local public transit is subsidized by the state. The only exception are the Intercity and ICE trains as well as the few other comparable services by other companies. This is deemed normal here, and new projects aren't assessed on profitability for the transit agency, but in profitability for the whole economy! Germany obviously has its own problems, but at least this is something we do have figured out. And the 49€ ticket is obviously another great way to push ticket prices down with more subsidizing

[neolithictransitrevolution]

Big externality you missed, the time lost to congestion. Also, the mental health effects of being in road rage mode for hours a day.

Edit: Adding injuries and death, and the medical and legal bills associated

[martinjanu]

I like to imagine just how much better transit could be overall, if we divided the money used for car infrastructure more fairly towards public transit that can serve a lot more people more efficiently 🤔

[mot.schutzen]

Well public transit should be considered as a utility like water and electricity, and not some kind of luxury. The money spent on a well-designed transit system can be earned back mostly by taxes and not fares.

[xsnozskwg]

It's always been a silly requirement because roads are never expected to make money and no sane government would allow for cars if their maintenance and fuel was meant to be covered by taxes.I'm also glad you mentioned we still would have some roads because seemingly on every transit video ever someone seems to think pointing out how much better almost any other mode of transit is means we want to dump every car in the ocean and tear up the roads for dirt bike trails.

[michaelvavala]

Well said, Reece. I drive most places because I live in the outskirts of the GTHA but I also know that money will have to get spent anyway. Rather than spending $9B on a highway that will only serve a portion of the area if we used that money to build more and better transit we actually take drivers off the road and generate income to help maintain that infrastructure. You don’t get that same luxury when building new highways. Plus like I said, transit expansions help the whole area its connected to whereas a new highway does not.

[Итън]

Great video as always. One thing I would be really interested in you talking about is the EU helping fund transit projects across Europe. As someone from Bulgaria, they have helped fund our Sofia metro which has had a tremendous impact on our city. This is why you see many poorer countries liek Bulgaria have relatively decent transit infrastructure. Especially in the main cities.

[Nico_M.]

One thing to consider, is that a good public transport system can save the community a lot of money and time, by forcing public and private projects to study where to be located, which in turn makes the public transport system more efficient. And here's the thing: if you only consider car trips, with just being connected to a highway the developer may think it's enough, but if you take into account public transport trips, you need to consider how the system behaves (capacity, frequency, reliability, etc). And if we're talking about a public project, such as a public university, or a change in zoning regulations to allow for housing projects in a new area, they need to coordinate with transport officials to make sure the system will behave properly.

[wilsistermans]

Public transportation may make money on some lines, but making money as a whole should not be the goal. That will mean less profitable lines will disappear.
A good public transport system may reduce the use of cars in the city. That means less pollution and a more livable city where people can live without even owning a car. Less cars in the city reduces costs of road maintenance, so the city can benefit from good public transport, even it does not make any money.

[neolithictransitrevolution]

Should fares make enough to opperate a transit system? Maybe. But, your transit should be increasing land values where it is built, and property taxes should be increasing because of this. You don't charge per use in an elevator, you make more from rent on the nth floor units.

Also, Transit is lower cost than car infrastructure. So frequently, to compete with subsidies given to cars and increase ridership, you should be Subsidizing transit. This might not be profitable in a vacuum, but when you account for infrastructure funding the balance changes.

[TheRuralUrbanist]

Sometimes a profit to society is loss for a specific transit agency, firm, or company...

When your region grows because of transit, the taxes generated should often be enough to show an overall 'profit' for the region. In other words, the transit system is the cost, taxes are the revenue. (Sorry for making a neo-liberal argument😅)

[AverytheCubanAmerican]

MTR not only operates or sells in other countries like Sweden, the UK, and Australia, but also just across the Pearl River Delta in Macau! There, they're building a LRT. During Portuguese rule, Macau didn't have a mass transit system, and so in 2002, the SAR government proposed a LRT and entrusted the MTR in doing a study, building, and operating it. The original proposal was criticized for not being cost-effective and obstructing views, and so it was temporarily shelved in 2003 before being revived in 2005 when a second study by MTR recommended a mixed underground and elevated system with three lines: an Airport Line, Macau-Taipa Line, and a peninsula encirclement line.

Construction work for it began in 2012, starting with the Taipa Line opening in December 2019 (which also serves the airport). The Macau Peninsula will have two lines circling it, one for the western side (Porto Interior Line) and one for the east side (Macau Peninsula Line). The Taipa Line extends to Barra station on the peninsula so it would connect with these two lines. There will also be a line to Coloane from Hospital das Ilhas station on the Taipa Line, a line that will go over to Hengqin in Mainland China from Lotus Bridge station on the Taipa Line, a line connecting the Macau Outer Ferry Terminal to the HKZM Bridge Checkpoint (to serve bus passengers to or from HK), and an East Line that goes through the New Urban Zone.

[SupremeLeaderKimJong-un]

Transit externalizes its "profit" to the community. A good example of this is real estate values. When a rapid transit station pops up, development and prices go up around the stations! Look at Bay Ridge in Brooklyn for example. Before it had a subway, Bay Ridge had nothing...the surrounding area of the R stations exploded because of the subway. Not to mention making the jump to make transit free is very much possible. That's what Luxembourg did, where it's ALL (buses, trains, trams) been free since 2020! In 2020, Luxembourg had the highest car density in the EU, 696 per 1, 000 people versus the average 560. The country has suffered from bad traffic and high levels of climate-heating emissions as a result. And it's paid for through their taxes!

By eliminating a mode of transit because it's not profitable, then you're isolating so many people. When a government puts profit over people, that tells me everything I need to know about how much they actually care. And of course it wouldn't be profitable if the government isn't doing enough to provide not only convenient transit that takes people where they wanna go but also pedestrian infrastructure, because adding a simple sidewalk and shelters can go a long way.

[lamitron]

1:20 that poor guy was about to walk up the down escalator at canary wharf 😭

[humanecities]

The most important video I’ve seen this week. This is what I’m constantly telling people. It’s worth it from the perspective of health, cost, transportation efficiency…

[dosa]

Here in Mumbai, one simply can't imagine life without public transport systems

[Schobbish]

Love the Elizabeth line bag guy going up the down escalator at 1:20

[yjp]

I think this is one thing South Korean transit systems get right -- all the payment stuff is integrated and extremely cheap. You can get from one end of Seoul to the other end with 4 transfers from buses to subways and back for quite literally a total of 1-2 dollars, and it makes a huge difference compared to other systems I've experience even in places with amazing (and otherwise much better) transit systems like Japan.