Denver, Politics, Transit, Transportation

O’Toole: Flawed analysis tries to rationalize transit’s decline

Ride-hailing services are not the principle cause of transit ridership decline, according to a new report from TransitCenter, a New York-based transit cheerleading group. This is based on a survey of 1,700 people in seven different urban areas, including Denver.

Comparing the results with a similar survey from three years before, the group found a large increase in automobile ownership and that people who increased the number of trips they took by auto decreased the number of trips they took by transit. However, people surveyed who increased their use of ride-hailing services actually increased transit ridership, so TransitCenter concluded that increased auto ownership, not ride hailing, is the cause of transit’s problems.

A major problem with the study is that the people surveyed were not randomly selected — if they were, most of them wouldn’t have been transit riders. The amount of self-selection in the survey biases the results and says little about why the people who weren’t selected for the survey don’t ride transit — and their reasons may be completely different from those who were selected. Even if the survey was valid, TransitCenter admits that most of the factors reducing transit ridership are beyond the control of transit agencies. It recommends that transit agencies do the one thing that is within their control, which is to increase the “reliability and frequency” of transit service. While that may be important, in many urban areas–metro Denver included–it is time to question whether spending any more money on transit is actually worthwhile.

Indeed, the survey data itself fills less than a dozen pages of this 90-page report, suggesting that the survey was really an excuse to make headlines with a report advocating more transit subsidies. This raises the question of “who is TransitCenter?” This question isn’t really answered by the group’s web site.

According to Wikipedia, TransitCenter “was created by the [New York] area transit agencies working with local governments and the business community, and funded by the federal government…” in order to create a program to “sell” the idea of letting employers deduct transit passes that they buy for their employees from their taxes. (That doesn’t mean TransitCenter is primarily funded by the federal government, but it did get $250,000 from the Federal Transit Administration in 2017.)

TransitCenter spends between $5 million and $6 million a year, but has assets of nearly $82 million, nearly all of which are in Vanguard mutual funds. The group applied to be a 501(c)(3) (tax-deductible) organization, but failed to meet the IRS’s requirement that it be a “publicly supported” organization.

Instead, it is considered a “private foundation” that gives out grants to other transit advocacy groups. The group’s 2017 IRS report indicates that grant recipients included the Nashville Chamber of Commerce (which supported a $5 billion light-rail plan), Streetsblog, In Our Backyards (of Brooklyn), the Livable Streets Transportation Alliance, and various other “alternative transportation” groups. Other recipients include George Mason University, Massachusetts Institute of Technology, and Portland State University, effectively rewarding academics who support transit subsidies.

In all, about 50 groups received between $1,000 and $50,000, with the average group receiving about $27,000. The total value of these grants was about $1.5 million. In addition, TransitCenter spent $2.8 million on staff and professional fees, $495,000 on “travel, conferences, and meetings,” and $343,000 renting office space in the heart of New York’s financial district (and conveniently located near subway lines).

So basically TransitCenter is just another lobbying arm of the transit industry. Meanwhile, contradicting TransitCenter’s report, a paper by University of Kentucky researchers finds that the introduction of ride hailing into a city reduces rail ridership by 1.3 percent per year and bus ridership by 1.7 percent per year, an effect that “builds with each passing year.” While the exact numbers are just averages, the paper’s conclusion that ride hailing is “an important driver of recent ridership declines” seems more realistic to me.

Of course, this has contributed to efforts to demonize the ride-hailing industry. TransitCenter grant recipient Streetsblog has compiled a list of “all the bad things” about ride hailing, and most of them have to do with transit. Among the reasons are:

  • “They hurt transit.” Actually, any private business that that reduces the burden on a heavily taxpayer subsidized program should be considered a good thing.
  • “They reduce political support for transit.” Since transit is the most heavily subsidized form of travel in the United States, that’s also a good thing.
  • “They operate in transit-friendly areas.” People walk and bicycle in transit-friendly areas; shall we demonize them?
  • “They mostly replace biking, walking, or transit trips.” So what? I know some transit riders and cyclists hold a holier-than-thou view about their transport choices, but I don’t subscribe to it.

Streetsblog also claims that ride hailing increases traffic fatalities, citing a University of Chicago study. However, that study relies solely on a correlation-equals-causation argument: traffic fatalities began rising soon after ride-hailing companies were formed, so therefore ride hailing caused those fatalities. But the other thing that happened at about the same time as ride hailing was the increased use of the smart phones that enabled ride hailing, which increased distracted driving. I suspect distracted driving has had a much greater effect on traffic fatalities than ride hailing, which accounts for only a tiny percentage of total driving.

Public transit is not an end in itself; it is a means to an end or ends. If other forms of travel can provide that means without government subsidies, then we don’t need to defend transit against those other forms. Instead, we should celebrate the fact that we don’t need to keep subsidizing an obsolete transport technology that is slow, expensive, and inconvenient.

Randal O’Toole directs the transportation policy center at the Independence Institute, a free market think tank in Denver. A version of this column originally appeared in his blog, Theantiplanner.

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