The public transportation money pit

Today’s Chicago Tribune contains the following article:

http://www.chicagotribune.com/news/chi-getting-around-16nov16,0,3657428.column

The following data tell the story:

• The average fare collected by the CTA is 98 cents, according to the transit agency. It takes into account full-priced fares, reduced fares, passes and free rides.
• The cost for the CTA to provide service averages $7 per ride, including some capital costs such as maintenance and some system improvements.
• The cost per ride jumps to $9.90 if major projects such as the ongoing Brown Line capacity-expansion project or the planned extensions of the Red, Orange and Yellow/Skokie Swift Lines are factored in, CTA officials said.

How is that for a business plan? Your cost is $9.90 but you only collect $0.98. Brilliant! The CTA is constantly in financial crisis and this explains why.

Note that the published full fare for a CTA ride is $2.25. So in addition to having a cost structure that is totally unjustified by revenues we find that the CTA is offering so many discounts that they are actually collecting less than 50% of the full fare for each ride provided.

This is an appropriate case study to be presented to local governments that are currently considering additional public transportation expansion. Public transit is always and everywhere a money losing proposition.