Los Angeles Metro Bus Is Very Productive And Cost ... · capital, at the agency’s discretion....

METRO’S28BY2028PLAN:ACRITICALREVIEWXV.METROBUSISVERYPRODUCTIVEANDCOSTEFFECTIVE,RAILISNOT,BUTMETROFAVORSRAILOVERBUSByThomasA.Rubin,CPA,CMA,CMC,CIA,CGFM,CFMandJamesE.Moore,II,Ph.D.May2019

Metro’s28by2028Plan:ACriticalReview|XV.MetroBusIsVeryProductiveandCostEffective

ThomasA.RubinandJamesE.Moore|Metro’s28by2028Plan:ACriticalReview

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XV.METROBUSISVERYPRODUCTIVEANDCOSTEFFECTIVE,RAILISNOT,BUTMETROFAVORSRAILOVERBUS

INTRODUCTIONAsshowninthepreviousBriefs,Metrohasaveryhighlyutilizedandwell-performingbussystem.MetroanditsSouthernCaliforniaRapidTransitDistrictpredecessorhavehadthehighestaveragebusloadalmosteveryyearsincetheNationalTransitDatabase(NTD)timeseriesbeganin1979.ExtremeovercrowdinghadexistedonLosAngelesbusessincethefirstfuelcrisisinthe1970s.TheConsentDecree(CD)inLabor/CommunityStrategyCenteriswhatforcedMetrotoaddserviceandreduceovercrowdedbusconditions.By2002,afterMetrohadbeenworkingforoversixyearstocomplywiththebusserviceimprovementsrequiredbytheCD,Metro’sbusservicehadimprovedtothepointthatLAhadonlythethirdhighestcrowdingofanyU.S.urbanbussystem.1Thisbriefdemonstratesthat,despiteMetro’sconsistentandpublicclaimsoflowbuscrowding,lowbusfaresandhighstructuraldeficit,itslightandheavyrailsystemsarefarlesscost-effectivethanitsbusservice.

COMPAREDTOITSRAILSYSTEMS,METRO’SBUSSYSTEMISHIGH-PERFORMING,DESPITEMETRO’SCLAIMSTOTHECONTRARYAnexaminationofMetro’sFY14AdoptedBudget2demonstratestheagency’spreferencetoexpandrailserviceandhowithasmisrepresentedtheperformanceofMetrobusservicetosupportthiscourse.Figures1,3,4,and6arerecreatedfromMetro’sdocumentbasedonthedatadisplayedthere.Figures2,5,and7arecomparativeandpreparedfromdatafortheFederalTransitAdministration’s(FTA)NationalTransitDatabase(NTD)2012reportingyear,themostcurrentdataavailableatthetimetheMetroFY14budgetwasbeingprepared.3

METRO’SCLAIMOFASTRUCTURALOPERATINGDEFICITISFALSE

Figure1,fromMetro,4showsadeepeningEnterpriseFundOperatingDeficit(theamountoftaxpayerfundsrequiredtooperateMetro’stransitsystem).

1 U.S.DepartmentofTransportation.FederalTransitAdministration.NationalTransitDatabase(NTD),1979-2017

reportingyears.Paperreportsto1996,websitethereafter.https://www.transit.dot.gov/ntd2 LosAngelesMetropolitanTransportationAuthority(Metro).AdoptedBudget,FY2014.15-16

https://media.metro.net/about_us/finance/images/Adopted_FY_2014_Budget.pdf3 NTD,2012reportingyear.4 Metro.AdoptedBudget,FY2014.Unnumberedtableonpage15.



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Figure1:EnterpriseFundOperatingDeficit:Ten-YearForecastFY13AdoptedThruFY22Forecast

Source:Metro.AdoptedBudgetFY2014.Formanyyears,Metrousedthelabel“structuraldeficit”torefertotheshortfallbetweenwhatwasrequiredtooperatethebusandrailsystemandtheactualfundsavailable.Metropresentedthisvaluetojustifyincreasingfares,reducingbusservicelevelsorboth.Metro’s“FiscalYear2005RevenuePerformanceReport”totheBoardincludesthestatement:

Onealternative is to raise fares toa level thatwouldcompensate for thepassenger revenuedeficit.…Anotheralternativeistoreduceservicetoalevelthatwillbalanceforthestructuraldeficit(emphasisadded)forFY05.5

Incontrast,Figure26showsthattherehasneverbeenashortageoffundsthatMetrocouldusefortransitoperations.Metrohascontrolofflexiblefundsthatmaybeusedforeitheroperationsorcapital,attheagency’sdiscretion.Metroconsistentlywantstomaximizetheuseofitsflexiblefundsforcapitalprojects,andhas.Asindicatedinitsbudget,capitalspendingisMetro’sbiggestpriority.Capitalspendinglargelyrepresentsnewrailprojects.

5 MetroFinanceandBudgetCommittee.November18,2004.2.

http://media.metro.net/board/Items/2004/11_November/20041118%20Item22F&B.pdf6 Authors’analysisofdatafromMetro,AdoptedBudgets,FY08-FY14andProposedBudget,FY1.

https://www.metro.net/about/financebudget/financial-information/#budget

$0.0 $0.0 $0.0 $0.0

-$42.8

-$77.6-$86.3

-$106.7

-$186.6-$197.9

-$250.0

-$200.0

-$150.0

-$100.0

-$50.0

$0.0FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

Ope

ratin

gDe

ficitinM

illions$

Deficit



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Figure2:FundingAvailableforMTAOperationsSubsidiesandPercentUtilized

Source:Authors’calculationsfromdatainMetrobudgetdocuments.

METRO’SFOCUSONUNLINKEDTRIPFARESISMISLEADINGInFigure3,7Metrostatesthat,“Metro’sfaresareamongthelowestofanymajortransitagencyintheworld.”ThefigureshowsMetro’sfulladultcashfareof$1.50.Yetusingthefareperunlinkedpassengertrip,notthefareperlinkedtrip,doesn’ttellthewholestory.Forexample,ifatransitpassengerfirstboardsabusandthentransferstolightrail,thisistwounlinkedtrips—oneeachforbusandlightrail—andonelinkedtrip.ComparedtotheU.S.nationalaverageof1.51unlinkedtripsperlinkedtrip8(1.51:1),Metrohasaveryhighratioofunlinkedtolinkedtrips,2.38:1.9Thisisaconservativevalue.SomeMetrosurveysreportedover3:1.10

7 Metro.AdoptedBudgetFY2014.“FigureA:Metro’sfaresareamongthelowestofanymajortransitagencyin

theworld.”15.https://media.metro.net/about_us/finance/images/Adopted_FY_2014_Budget.pdf8 AmericanPublicTransitAssociation.AProfileofPublicTransportationPassengerDemographicsandTravel

Characteristics.May2007.Table23.http://www.apta.com/resources/statistics/Documents/transit_passenger_characteristics_text_5_29_2007.pdf

9 Metro.MetroResearchDataCenter(RDC).BusResultsSurveyofSpring2005.https://www.metro.net/news/research/

10 Ibid.SystemResults,Spring2005;RailResults,Spring2005.

$1,194.2

$1,334.4

$1,154.6 $1,192.0$1,299.5

$1,373.8$1,502.5 $1,544.8

$799.9$861.1 $866.3

$776.5 $808.5$894.7

$951.9 $971.867.0% 64.5%

74.4%

65.1% 62.2% 65.1% 63.4% 62.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15$0

$200

$400

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$1,000

$1,200

$1,400

$1,600

$1,800

%ofA

vailableSubsidiesU

tilize

dforO

peratio

ns

$Miilions

TotalSubsidiesAvailable ActualSubsidiesUtilized PercentageofSubsidiesUtilized



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Figure3:Metro’sFaresAreAmongtheLowestofAnyMajorTransitAgencyintheWorld

Source:Metro.AdoptedBudgetFY2014.Inanyevent,Figure3’sfocusonunlinkedtripsobscurestheimplicationthatMetrohasanunusuallyhightransferratio,sounlinkedtripsisonlypartofthestory.WithoutthetransferratiosoftheothertransitoperatorspresentedinMetro’scomparison,contrastingMetro’sfarestootheragenciesisanapples-to-orangescomparison.OnaverageMetro’sridersmustmake1.576times(2.38/1.51)=1.576timesasmanyunlinkedtripsasotherU.S.transitusersasawhole.ThisputsMetro’srelativefareperlinkedtripat1.576x$1.50=$2.36,whichisgreaterthan$2.25,thehighestU.S.fareMetroshowsinFigure3.

METROMISREPORTSLOADFACTORSLoadfactorsareconventionallyexpressedasapercentageoftheseatedload.Planningloadfactorsaremetricsforanoperationaltargetthatshouldnotbeexceededinmostcases.Forexample,inFigure4,Metro’s1.23factormeansthatthemaximumnumberofpassengersonboardshouldbenomorethan123%ofthenumberofseats;e.g.,fora40-seatbus,thecalculationwouldbe40x1.23=49.2.InFigure4,11Metrostatesthat,“Metro’sloadfactoris1.23thatindicates(sic)theleastovercrowdedsystem.This,however,contributestohigheroperatingcosts.”

11 Metro.AdoptedBudgetFY2014.“FigureB:Metro’sLoadFactoristhelowestamongpeeragenciesintheU.S.”

16.https://media.metro.net/about_us/finance/images/Adopted_FY_2014_Budget.pdf

$0.24

$1.23 $1.36$1.50 $1.50 $1.50

$1.66 $1.70$2.00 $2.00 $2.00 $2.00

$2.25

$2.90 $2.94$3.07

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

BaseBusFares



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Figure4:Metro’sLoadFactorIstheLowestAmongPeerAgenciesintheU.S.

Source:Metro.AdoptedBudgetFY2014.Figure4appearstopresentpassengerloadingplanningstandards,whichareplanningtargetsusedforthelevelofservicebasedonanticipatedpassengerloads.SinceMetroismulti-modal,anyaggregate,system-wideloadfactorwouldhavetoaccountforallofMetro’smodes.YetnoneofMetro’sloadstandardsis123%.TheMetrobusloadfactorstandardwas130%ofseatedload.12Forrail,theloadfactorswere175%forlightrailand230%forheavyrail.13Busesaredesignedforlowerstandingloadsbecausetheyhavenarrowaislesandfewerdoors,andthestairsatbusdoorscutintostandingroom.ThevalueshownforMetroof123%couldbesomenonstandard,aggregatemeasure,butsinceMetroismulti-modal,anyaggregate,system-wideloadfactorwouldhavetoaccountforallofMetro’smodes.Thereisnowaytocombineloadfactorsof130%,175%,and230%toproduceacombinedoverallfactorof123%.Loadfactorsareoperatingtargets,andactualvehicleloadsmaybedifferent.InMetro’scase,thesestandardsareaspirational.Metro’sactualpassengeraveragesareverydifferent,asshowninFigure5.Actualvehicleloadsarewhatimpactcost-effectiveness,andwhatareimportanttothequalityofriders’experiences.InFigure5,passengerloadfactortargetsappearasthevalueatthebaseofeachagency’ssetofbars.InitsFY14AdoptedBudget,Metroreportedthatitsloadfactoristhelowestoftheagenciesshown,12 Metro.“BusServiceGuidelines.”http://www.metro.net/about/metro-service-changes/bus-service-guidelines/13 Metro.“RailServiceGuidelines.”http://www.metro.net/about/metro-service-changes/rail-service-guidelines/

1.23

1.431.52

1.72 1.74

1.99 1.99 2.032.16

2.42

0

0.5

1

1.5

2

2.5

3

LACTMA NJTransit MTS WMATA NYCMTA CTA SEPTA RTC BART MBTA

Metro'sLoadFactoris1.23thatindicatestheleastovercrowdedsystem.Thishowever,contributestohigheroperatingcosts.



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whichcannotbereconciledtoMetro’sadoptedloadfactors.TherealityisthatMTA’sactualbus,heavyrail,andlightrailloadfactorsexceedeveryvalueinMetro’speergroup(exceptforMassachusettsBayTransportationAuthoritylightrailpassengerloadof33.3).Overall,Metrohasthehighestvehicleloads,andthehigherthepassengerload,thelowerthecostallocatedtoeachpassenger.Figure5:MetroFY4AdoptedBudgetandFY12ActualLoadFactors

Source:Metro.AdoptedBudgetFY14.BudgetLoadFactor.NationalTransitDatabaseforIndividualAverageLoad.

METROBUSHASAFARHIGHERFAREBOXRECOVERYRATIOTHANMETRORAILCOMPAREDTOU.S.TRANSITOPERATORPEERSAtransitsystem’s“fareboxrecoveryratio”istheshareofoperatingcostsrecoveredfrompassengerfares.Generallyspeaking,themoreatransitsystempaysforitselfthroughfares,thelowertheshareofcoststhathavetobecoveredbytaxpayers.InFigure6,14Metrocomparesitsfareboxrecoveryratiotootheragencies,stating,“Metro’sfarescoverthelowestpercentageofoperatingcostofanymajortransitagencyintheworld.”

14 Metro.AdoptedFY2014.“FigureC:Metro’sfarescoverthelowestpercentofoperatingcostofanymajor

transitagencyintheworld.”16.https://media.metro.net/about_us/finance/images/Adopted_FY_2014_Budget.pdf

• • • • • • • •• • • • • • • •• • • • • • • •• • • • • • • •• • • • • • • •• • • • • • • •• • • • • • • •• • • • • • • •• • • • • • • •• • • • • • • •

MTA FY14 Budget Figure B Motor Bus Heavy Rail Light Rail

LACMTA NJTC MTS WMATA NYCT CTA SEPTA RTC MBTABART0.0

0.5

1.0

1.5

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2.5

MTA

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4 Bu

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Transit Agency

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11.110.3

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23.6

13.8

26.9

20.0

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24.4

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24.4

33.3



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Figure6:Metro’sFaresCovertheLowestPercentageofOperatingCostofAnyMajorTransitAgencyintheWorld

Source:Metro.AdoptedBudgetFY2014.Incontrast,Figure715providesthe2012fareboxrecoveryratiosfor45ofthetop50U.S.transitoperatorsintheFTA’sNationalTransitDatabase(NTD).Thefivetop-50agenciesnotincludedinFigure7aremainlylargecommuterrailoperatorsthatdon’toperateanysignificantbusorotherrailservice.Ofthe45thatoperatebus,heavyrail,and/orlightrailtransitservice,Metro’stotalfareboxrecoveryratiowasthe20thhighest,exceedingthatof25transitsystems—includingAustin,Baltimore,Buffalo,Charlotte,Cleveland,suburbanChicago(multiple-countyagency),Dallas,Detroit,Houston,LongBeach,Miami,Oakland,OrangeCounty,Orlando,Phoenix,Pittsburgh,Sacramento,SaintLouis,SaltLakeCity,SanAntonio,SanFrancisco(whichisshowninFigure6withahigherfareboxrecoveryratiothanMetro),SanJose,Seattle(KingCounty),suburbanSeattle,andsuburbanWashingtonDC(MontgomeryCounty,MD).Metro’sfareboxrecoveryratioisnotthe“…lowestpercentageofoperatingcostofanymajoragencyintheworld.”Onthecontrary,Metro’sfareboxrecoveryratioisrepresentativeoftheindustry,andabovethemedian.

15 Figures7-14,inclusive.Authors’calculationsfromdatafromNationalTransitDatabase2012.

http://www.ntdprogram.gov/ntdprogram/pubs/top_profiles/2012/Transit%20Profiles%20Top%2050%20Agencies.pdf

26.2%

34.3%38.3%

42.7% 42.8% 44.0% 44.3%46.0% 47.2%

51.2%55.0%

71.6%

83.1% 85.8%87.3% 87.7%

101.4%

0%

20%

40%

60%

80%

100%

FareboxRecovery



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Figure7:FTA“Top45”TransitOperatorsBus+HeavyRail+LightRailFareboxRecoveryRatio

Source:NationalTransitDatabase.Figures8,9,and10summarizeMetro’s2012fareboxrecoveryperformanceforheavyrail,lightrail,andbus,respectively.Metro’sheavyrailfareboxrecoveryratiowasthefourthlowestintheU.S.,onlyexceedingtheratiosofthethreesystemsmostwidelyregardedasindustryfailures:Miami,Baltimore,andCleveland.Metro’slightrailfareboxrecoveryratioalsoranksnearthebottom,farbelowthesimpleandweightedaveragesforitsnationalpeersgroup.Inshort,Metro’srailoperationunderperformsrelativetonationalnorms.

75%

69%

58%

50%

43% 43%42% 42%

41%

38% 38%37%

36%34%

33%32%

31% 31% 31%30% 30%

29%28%

27% 27% 27% 27%26% 26% 26%

25% 25% 25%24% 24% 24%

23%21%

20%19% 19%

18%17%

16%14%

13% 13%

0%

10%

20%

30%

40%

50%

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70%

80%FareboxRecoveryRatio

Non-MTA Operators Los Angeles Co. MTA Weighted Average Simple Average



10

Figure8:FTA“Top50”HeavyRailOperators(11)FareboxRecoveryRatio

Source:NationalTransitDatabase.Figure9:FTA“Top45”LightRailOperators(21)FareboxRecoveryRatio

Source:NationalTransitDatabase.

75% 73%

67% 67%

53% 52% 51%47%

40%

32%28%

23% 22%

0%

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80%

BART NY DC WTDAVG

PHIL BOS CHI SIMAVG ATL LA MIA BALT CLE

56%

50%

46%43% 42%

40%37%

32%29% 29% 28% 27%

24% 23% 22% 21% 20% 19%17% 16% 15%

13%

0%

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30%

40%

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60%

SD BOS PHILPORT DEN SLC MSP SAC WTDAVG

StL SEA CLE SF HOUCHAR NJ BUF LA PIT BALT SJ DAL



11

In contrast,Metro’s farebox recovery ratio forbus is 11thhighestof 43. LosAngelesbusperformscompetitively relative to national norms. It is well above themedian and average values for U.S.systems.Overall,Metro’sbusoperationsaredoingverywellcomparedtoitsU.S.industrypeers;itisMetro’sheavyrailandlightrailoperationsthataredraggingdownMetro’soverallperformance.Figure10:FTA“Top45”BusOperators(43)FareboxRecoveryRatio


BETTERMETRICS:SUBSIDIESPERPASSENGERANDPERPASSENGER-MILEThefareboxrecoveryratioisanimportantandwidelyusedtransitperformancemetric;however,byitself,themetriccanbemisleading.Forexample,alow-costoperatormayhavealowfareboxrecoveryratio,butthetaxpayersubsidyperpassengerorpassenger-milemightstillbelowerthanthoseforhighercosttransitoperatorswithhigherfareboxrecoveryratios.Theobjectiveistooperateatransitsystemthatdeliversthemostvalue,typicallymeasuredintermsofridership,inexchangeforscarcetaxpayerfunds.Lowsubsidiesaremoreimportantthanhighfareboxrecoveryratios,inpartbecausetheymeandeliveryofmoreservice.Thebestcomparisoncombinestaxpayersubsidiesperpassengerandperpassenger-mile.Figures11,12,13,and14summarizesubsidiesperpassengerversussubsidiesperpassenger-mileforU.S.transit

69%

44%42%

38%38%38%37%

35%34%

32%31%31%31%

30%30%30%29%

28%28%27%27%27%27%27%

26%25%25%

24%24%24%23%

22%22%21%21%

20%19%19%

18%18%17%

16%14%

13%13%

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systemsoverall,andseparatelyfortheheavyrail,lightrail,andbusmodes,respectively.Ineachcase,thebestperformingsystemshavecoordinatesclosesttotheorigininthelowerleft-handcornerofthegraph.Figure11:FTA“Top45”TransitOperatorsSubsidy/PassengerandPassenger-Mile

Source:NationalTransitDatabase.Overall,Metro’sperformanceisnotablybetterthanthemedianofitsnationalpeergroup,10thlowestofthe45onbothmetrics,withonlyeightoperatorsbeatingitonbothmeasures.ThisrelativelyhighlevelofperformanceisparticularlyimpressivebecauseMetrooperatesinLosAngelesCounty,oneofthehighestcostareasintheU.S.,andthedatainFigures11-14arenotadjustedtoaccountforcost-of-living.

SJ

DAL

OAK

SEA2

CHI2

PIT

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$0.05

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Figure12:FTA“Top45”HeavyRailOperators(11):Subsidy/PassengerAndPassenger-Mile

Source:NationalTransitDatabase.Disaggregatingbymode,Metroheavyraildoespoorly,onceagainoutperformingonlythethreelong-standingU.S.lowperformers.

CLE

MIA

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Figure13:FTA“Top45”LightRailOperators(21)Subsidy/PassengerAndPassenger-Mile


Withrespecttolightrail,Metro’sperformanceistowardthemiddleofthenationalcohort,betterthantheaveragesonsubsidy/passenger-mile,worseonsubsidy/passenger,butbetterthanMetro’sheavyrailperformance.

PIT

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SEADAL

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SD$0.10

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Figure14:FTA“Top45”BusOperators(43)Subsidy/PassengerandPassenger-Mile

Source:NationalTransitDatabase.Metrobusisaveryhighperformer,withonlythreebusoperatorslowerwithrespecttobothsubsidyperpassengerandsubsidyperpassenger-mile.

METROMISREPRESENTSBUSPERFORMANCETOTHEMEDIATopromoteitscaseforrail,Metrohasunderstatedrailcostsandoverstatedbenefitswhilemisrepresentingitsbusasunderperforming.

SJ

DAL

SLCOAK

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16

Considerthefollowingquotationfromthethen-MetroCEOinacoverstoryonMetroinMassTransitmagazine:16

Alldaylong,oursystemisoperatingat3to4percentcapacity,seatmilestopassengermiles,...Addingmorebusestoaroutethat'soperatingatanaveragespeedof9milesanhourisn'tgoing to do anything. Peoplewho need to ride it are already riding it;we're not picking upmorepeople.

Ona40-passengerbus,aseatedloadof3%-4%wouldbeanaveragepassengerloadof1.2-1.6.AtthetimetheMassTransitstorywaspublished,thelatestNTDdataavailablewasforthe2002reportingyear,forwhichMetroreportedanaveragebuspassengerloadof16.5,17or41.25%utilization—over10timeswhatMetro’sthen-CEOisquotedasreporting.FromFY04,theyearbeforethemisleadingMassTransitarticlewaspublished,throughFY07,thelastyearoftheConsentDecree,Metroheavyandlightrailridershipincreasedby11.8millionboardingscombined,whilebusridershipincreasedby48.1million18boardings,overfourtimesasmuch.Metrobuswas“pickingupmorepeople.”

METROUNDERFUNDSTHEBUSSYSTEM,SPENDINGDISPROPORTIONATELYONRAILMetrohasspentorbudgeted$19.6billionfornewpassengerrailprojectsthroughthePurpleLinePhase1.19AddinthePurpleLinePhase2at$2.4billion,20andPhase3at$3.2billion,21andMetrohasspentorbudgetedover$25billion(FY19dollars)onrailexpansionsinceMetroreacheditsall-timeridershiphighinFY85.Despitetheseexpenditures,Metro’stotalridershiphasbeendroppingsteadilyeversince.ThesoleexceptiontothistrendconsistsoftheConsentDecreeyearsendinginFY07,aperiodduringwhichalegalchallengeforcedMetrotospendattentionandmoneyonbuspassengers,

16 Lundquist,Lori.(Ed.)“AMatterofDecree:LosAngelesCountyMetropolitanTransportationAuthority–What

happenswhentheverypeoplewhouseyourserviceteamuptobecomeyouragency’smostdangerousopponent?”MassTransitmagazine,Spring2005.

17 Authors’calculationsfromNationalTransitDatabase2002.https://www.transit.dot.gov/ntd/data-product/2002-annual-database-service

18 NTD“Profiles”forcitedyears.19 Rubin,ThomasA.“IstheLosAngelesTimesArticle,‘BillionsSpent,ButFewerPeopleAreUsingPublic

TransportationinSouthernCalifornia,’Misleading?13.http://demographia.com/db-rubin-la-transit.pdf20 Metro.FY19AdoptedBudget.57.21 Metro.“APrimeronPurpleLineSection3ProjectFunding.”TheSource.March13,2019.

https://thesource.metro.net/2019/03/13/a-primer-on-purple-line-section-3-project-funding-hint-its-complicated/



17

andridershipincreasedby132million(36%).OncetheConsentDecreeexpired,ridershipbegantodropagain,andMetrohasneverofferedacredibleplantoincreaseridership,orstopthelong-termridershipdecline.Table1providesasnapshotofMetro’scurrentrailsystemexpenditures.Theagency’srailsystemisbudgetedtocarry30%ofMetrototalbusandrailboardingsinthecurrentfiscalyear.However,Metroisbudgeting41%oftotalbusandrailoperatingsubsidiesandcapitalrenewalexpendituresonrail,or37%morethanrail’sboardingpercentage.Bus,incontrast,gets16%lessfundingcomparedtobus’sboardingpercentage.Whencapitalexpansioncostsaretakenintoaccount,Metroisdevoting68%ofitstotalsubsidestorail.IfMetrohadnotbeenunderspendingonbusservicefordecades,busridershipwouldhavebeenhigher,andtheseratioswouldhavebeenevenworseforrail.

Table1:MetroBusandRailOperatingandFinancialStatisticsDescription Bus Rail Total

Values(millions)

Values(millions)

PercentageofTotal

Values(millions)

PercentageofTotal

Boardings22 262 70% 111 30% 373Passenger-miles23 1,160 61% 733 39% 1,893OperatingExpenses24 1,225 69% $542 31% 1,767Less:OperatingRevenues25 (251) 74% (87) 26% (338)OperatingSubsidy 974 68% 455 32% 1,429StateofGoodRepair26 161 32% 339 68% 500TotalSubsidiesforExistingAssets 1,135 59% 794 41% 1,929NewConstruction/Expansion27 17 1% 1,703 99% 1,720TotalSubsidies $1,152 32% $2,497 68% $3,649

Source:Metro.AdoptedBudgetFY2019.Metroclaimsastructuraloperatingdeficit,whichitconsiderssolvingbyreducingbusserviceandincreasingbusfares,whenbusisthehighestperforming,mostcost-effectivetransittypeithas.Awell-managedbusinesskeepsitsbestperformingmissionsandreducesorclosesitsworstperforming22 Metro,AdoptedBudgetFY2019.51.

http://media.metro.net/about_us/finance/images/fy19_adopted_budget.pdf23 Ibid.24 Ibid.34.25 Ibid.26 Ibid.60-63.27 Ibid.56-57.



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ones.IfbusservicewereexpandedandconfiguredtoserveLosAngelesresidents’unmettransportationdemandratherthantofeedcaptiveriderstoMetro’sraillines,itwouldperformevenbetter.Passengerrailcanbeawiseinvestmentinsomesituations,butbuildingnewurbanraillinesisaveryexpensivewaytomovetravelers,andahighlycostineffectiveoptionforLosAngeles.Metro’sover-emphasisonrailexpansionattheexpenseofcost-effectivebusservicehaswastedbillionsoftaxpayerdollarsandcreatedmajorurbanmobilityproblems.IfMetroimplementsthecurrent28by2028Plan,L.A.transitservicewillcontinuetodeteriorate.IfMetrowantstobestservetransitcustomersintheregion,itwillfocusfirstonbusserviceimprovements—notexpensiveraillinesthattakedecadestoimplement.

CONCLUSIONS

1. Metrobusisveryhighlyutilizedandverycost-effectiverelativetonationalnorms.

2. Metrorailisbelowaveragetopoorcomparedtoitspeersintermsofcost-effectiveness.Metro’sheavyrailandlightrailsubstantiallyreduceMetro’saggregateperformancewithrespecttofareboxrecoveryandsubsidiesperpassengerandpassenger-mile.

3. Anexaminationofoperatingcosts,operatingsubsidies,andutilizationmakeitclearthatMetrobushasalong-termandgreatadvantageoverMetrorailacrossmostorallimportantmeasures.Metro’sfocusonrailcapitalprojectsignoresthisreality.

4. Despitebus’sdemonstratedcost-effectivenessandhighutilization,Metro’sbudgetaryprioritizationofrailcapitalprojectsindicatesanintenttofindmoremoneytofundnewraillines.Iftheagencyproceeds,itwillcomeatthecostoftransitutilization.

5. IfMetroimplementsthecurrent28by2028Plan,withitsemphasisonnewraillinesattheexpenseofbusservice,billionsofdollarsmorewillbespentandoverallL.A.transitservicewillcontinuetodeteriorate.

Date post:	14-Jul-2020
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