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Just over five years ago, the onset of the COVID nineteen pandemic brought the world to a halt. Schools were closed, offices were empty, and without commuters, the number of people taking public transit plummeted it. New York's Metropolitan Transportation Authority has been knocked down before, but its current leader says
nothing matches the current pandemic by orders of magnitude. We're back up to more than a million writers on the subway and a daily basis, but that's still down some eighty percent year on year.
House the fair box is like, you know, a huge part of the revenue for these systems. So they needed to get a bailout from the federal government.
Street Taylor covers transportation and public finance for Bloomberg, and she says over the last half decade, the federal government supplied roughly seventy billion dollars in aid to transit agency across the US. A that's helped keep them afloat, but ridership in the US across the board hasn't gotten back
to pre pandemic norms. It's been a struggle, and that federal aid money is running out, so free Along with Bloomberg Data reporter Aaron Gordon, they have been tracking what could come next for those agencies, and they say the prospect of riders not returning has some transit advocates sounding the alarm about a potential death spiral.
A death spiral is when a transit agency has to cut service to save money, which makes it less useful to people who then find other ways to get around or don't take trips entirely because they can't, which then leads to less fair revenue for the transit agency, and then they have to cut more service because revenue's down, and that's the death spiral.
I'm David Gera and this is the big take from Bloomberg News today. On the show, as federal funding dries up, we dig into how mass transit actions across the US or trying to avoid a so called death spiral. What that vicious cycle of low ridership, lower revenue, and cuts to services could mean for America's major cities. The world shut down during the early days of the COVID nineteen pandemic, and mass transit in the US was no exception.
So public transit agencies weren't exempt from the rule that everything was just going to start clearing out. People weren't traveling as much, so Ridership just kind of took a hit.
Street Tailor teamed up with Aaron Gordon, who was also spent years covering transit. He says the funding the federal government supplied during the pandemic helped agencies bridge the gap.
It was a very rare instance in US history where the federal government provided money to transit, not just to do big, expensive, long term projects, but to run so servius on a day to day basis. Typically, the federal government had never done this before, and it was absolutely essential.
So here we are five years hence, is all of that money gone? Is the seventy billion gone completely? Or are we at a point where these transit agencies are beginning to reckon with the fact that it is going to disappear soon.
It depends a little bit on which agency you're talking about, whether they spent all their money or not. A select few agencies kind of squirreled some away expecting that they would need it, and by the mid twenty twenties, but for the most part, it's all pretty much gone and agencies are trying to figure out what they're going to do now.
A lot of companies have brought workers back to the office. I'll say, personally, riding the train day in and day out, I have my frustrations with delays and them being crowded. When it comes to ridership, are we back to that level that we saw pre COVID or are we close to it?
People are taking the train again, and ridership has ticked up since the pandemic, but what hasn't recovered is people going in as frequently as they used to.
In the US, most trans agencies are hovering somewhere around seventy five percent of pre COVID ridership, which if you're a commuter on a train, you know, especially like Tuesday to Thursday, which are you know, typically the highest ridership days, the train probably feels more or less pre COVID, you know, like maybe it's not quite as crowded as it was. You know, hard to get this, it's still hard to get to see there's still tons of people on the train.
It feels like things are more or less back to normal overall all washes out, So like most transidencies are about seventy five percent of ridership, which is basically where some of the most of the estimates were, you know, in like twenty twenty two of where this would all shake out. This is a problem for transit agencies because if they rely on fair revenue to help balance the budget every year, that's a really significant hit.
If we took a.
Tour through major cities in the United States, or most of them or all of them fair dependent, is that the kind of economic model that they use.
It varies by transit agency. Some are more fair dependent than others. A lot of the transit agencies, for like mid size American cities that you wouldn't really think of as being very transit dependent, but have transit systems that are very important to the cities. I'm thinking like Boston, Philadelphia, San Francisco, Atlanta, cities where car dependency is still very much the norm, but there's also a large population that uses the transit system to commute every day. Those systems
tend to be extremely fair reliant. New York City gets a ton of revenue, like billions and billions of dollars a year from the subway fares, but they also get a lot of tax revenue too. So it ends up being about fifty to fifty more or less. So it depends on the system just how much they rely on fair revenues. But I would say even for the systems where it's maybe a smaller chunk of their overall annual revenues, a twenty five percent reduction in that chunk is still significant for them.
So if folks aren't riding the train the way they used to, what are they doing differently? I imagine some are just staying at home working from home. But are there's some folks like I know you're a bike rider. They're folks like you're riding bikes in now or taking their cars through. How is that shift manifested itself?
I don't know. If we've seen a huge shift in transportation action. Call this mode shift the mode you're using to get where you're going. What we have found is much more significantly. If people moved away from the city during the pandemic thinking remote work would be the future, and they got called back to the office and they live further away from their office than they used to, that probably means they're driving now. But broadly, the mode choice pre and post pandemic is looking very similar.
A lot of these transit agencies don't think that ridership will ever look the same as it used to before the pandemic came. So is ridership inching back to what we might consider normal, sure, But for these transit agencies who are so used to certain levels of ridership for decades before the pandemic came, they aren't seeing what they need to see at the fairbox.
How would you characterize the financial situation of major transportation agencies across the countries? Is there nuance here or are some doing better than others? Where it's there kind of a blanket sense you can give us of how they're doing financially.
I would say generally there are two categories. As with most things US transit related, there's New York and then there's everywhere else. You have to remember that basically one third of all public transit trips in the US occur in the New York metro area. So even though it feels disrespectful of the rest of the country to talk New York and everywhere else, it really is that way with transit. So the MTA is actually in pretty good
financial shape all told. Because of some new taxes on the state level, and also congestion pricing, which has allowed them to fully fund their long term capital plans. D Transit is in pretty dire financial shape, and then the rest of the country is, I would say, in a similar boat to New Jersey Transit. Their ridership recovery has been quite poor. They tend to rely on commuters for most of their rides, whereas the MTA has a lot
of discretionary trips. You know, people take the subway for all kinds of reasons in New York, whereas in most other cities, the transportation systems were designed to get workers to work, and they assumed if you're taking discretionary trips, you'd probably be driving your own personal car. So they've had a lot harder time getting people to take their systems as commuters aren't returning to the office, you know, maybe more than like three or four days a week.
And also in those other states, it's harder for the transa agencies often to get financial support from the state for various different reasons. But buying large transit just isn't prioritized in the US.
A lot of these systems have been flashing warning signs for years now, so the fact that some systems that are mentioned in the story still haven't gotten it together or gotten what they've needed or sorted it out. It's super down to the wire now, so.
Ridership is down, and if it's not coming back, what options do these transit agencies have left? That's next? Could you just quickly take us kind of inside a boardroom at one of these agencies having to make this kind of decision. I imagine that the calculus is incredibly difficult and tricky whether or not to cut service, and that fear that it might kickstart that vicious cycle or that death spiral.
There are only so many levers you can pull if you're running one of these transit agencies. You can raise fares, but that again is going to discourage some number of riders. You can cut service, you can try and defer hiring, or you know, put long term projects on hold. You can try and do as little maintenance as possible, but all of those have long term costs and ramifications as well that could be even more severe than anything you're
doing in the short run. You know, we saw the cost of deferred maintenance in New York City back in twenty seventeen twenty eighteen when the subway seemed like was collapsing every day, and you know, not literally, but every day you would go down into the station, you weren't sure if you were going to see, you know, the platform five six people deep because the trains just couldn't run because maintenance had been deferred during the Great Recession.
That was a huge reason for it. So I think the people who run these systems are extremely cognizant of this. They're not naive. They know that almost anything they do to try and cut costs and balance the books is going to have some type of long term costs or ramifications that they'll have to deal with. Eventually.
When you cut service, like those drastic cuts service, people find other ways to get around and they'll get set in their routines and then they might never come back. If they hit the roads and you know, they can get in their cars and they figure that out, then that could also add to congestion and more traffic and it's just not good for anyone really.
But by law, most of these transit agencies have to present balanced budgets every year. That's kind of the governing ethos of these public authorities. They're not government agencies that can, in theory run deficits. They have to present a balanced budget every year, so one way or another, something has to give.
And I wonder sort of how you see this playing out. Can go back five years we had the government, federal government stepping in during the pandemic. Is there a world in which the federal government steps in again to help out these systems.
No one we have spoken to for our stories has any expectation that this administration is going to step in and help public transit. If anything, the fear runs the opposite direction, which is previously committed money for projects is going to be clawed back or never delivered. Certainly, the administration's posture towards congestion pricing in New York is lending
credence to those fears. Right, the administration is aggressively trying to cancel that program, revoke authorization for it, which would have tremendous ramifications on New York City's transportation lands.
This is this is a program that was designed to raise revenues to improve the larger system here in the New York area by raising money from people who drove their cars into certain parts of the city.
That's right, and in a lot of ways. That was a program designed so that New York City would not rely as much on the federal government for money to rebuild the system.
Essentially, if Trump gets his way and congestion pricing is mixed, then MTA needs to come up with a plan B for you know, I guess, how to fund their capital project for the next however many years, and then they have to wonder, you know, how many people will actually want to ride the MTA if we're dealing with CenTra old equipment and it's always breaking down.
Transagencies are used to dealing with administration changes, but what they're not as used to dealing with is an historic drop in ridership at the same time. And so how they're going to navigate those two things is, I think something that has very little historical precedence.
If you look at the demographics, who is hurt the most when we see a system get into a death spiral? We see cuts across the system. Can you characterize who's most likely to be adversely affected by that?
It's going to be the people who are transit dependent, the people who need those systems because they don't have another way to get around. And I think in this country. The first thing that comes to mind when most people here transit dependent is likely income based. You think of someone who can't afford to take a car, but that's not necessarily true. It could be people who can't drive
a car for medical reasons. It could be people who can't drive a car because they're elderly and aren't comfortable driving anymore, they don't feel safe doing it. It could be people who choose not to drive a car for various lifestyle reasons. They want to live a car free lifestyle. But the reality is, in most places in the country, if you want to be an active economic participant, you
have to be able to drive. So there are all types of people who get affected when transit doesn't provide the kind of service they need.
And that's going to be even more devastating for these communities where people rely heavily on public transportation. There's a lot at sake for not just these agencies who might lose a lot of money, but for writers who are depending on public transit and a robust system to get around.
This is the big take from Bloomberg News. I'm David Gera. This episode is produced by David Fox and Rachel Lewis Krisky. It was edited by Air and Edwards, Patty Hirsch, and Tim Annette. He was fact checked by andrean A. Tapia and Rachel Lewis Chrisky, and mixed and sound designed by Alex Sagura. Our senior producer is Naomi Shaven. Our senior editor is Elizabeth Ponso. Our deputy executive producer is Julia Weaver. Our executive producer is Nicole beemster Boor. Sage Bauman is
Bloomberg's head of podcasts. If you liked this episode, make sure to subscribe and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back on Monday.