Free Public Transit: U.S.Auto bailout tip of iceberg

Friday, November 14, 2008

U.S.Auto bailout tip of iceberg

For decades the U.S. taxpayer has directly subsidized the carbon-fuel, automobile, and sprawl industries. Now "emergency" direct subsidies are being considered for automakers.

But these direct subsidies are just the tip of the iceberg. The autosprawl system generates large "profits" for the above industries, but these are not real economic profits. The profits come from ignoring the costs [externalities] and wastefulness [opportunity costs] of this system.

The biggest hidden cost is greenhouse gas emissions and the consequent floods and drought. The second is oil and pipeline wars. There are many more problems absorbed by society for the unnecessary autosprawl system. How many can you name?

The solution is to stop the subsidies and invest in public tranportation.

Free is Cheaper

How is free transit cheaper? Don't you have to make up for lost fare revenue? The answer is that your city will save so much money in other areas, and quality of life will improve so much that you will get back much more than the lost fares. Some examples are listed below. If you want to see specific numbers, see our spreadsheet here.

Increased return on investment. Public transit involves large fixed costs. When fares are gone, there are more riders per vehicle, getting more value from the investment.
Reduced parking costs. With free transit, fewer people will park downtown. City parking authorities can cost $180 million a year, paid by fines, which are just a tax on customers and delivery services.

Reduced traffic congestion. Studies have shown that the time lost in traffic costs urban economies hundreds of millions of dollars.
Less money exported for gasoline. A medium sized city can export 1 million dollars a day in gasoline money for cars. Free buses will reduce this considerably.
Better quality of life, priceless. In Hasselt, Belgium, when fares were removed, people in hospital started receiving more visitors.