Great article by Andrew Miller. Lots of thoughts on this one!

First, I think it’s a compelling case for how transit should operate. I agree that subsidizing the rider and expecting the transit agency to break even is a far better model of transit provision.

Andrew mentions this being a regulated monopoly, but I would nitpick that a bit. I think it would make more sense for cities to have a fare-subsidy program that basically was “x per mile” that they wanted to pay to help provide mobility as a social service, and then many companies should be able to compete for a slice of that “x per mile.”

That said, I don’t think this model of transit would work well in isolation. Two main reasons:

• First, as long as the bus is stuck on the same roads as other traffic, it cannot be faster than driving.

• Second, as long as driving is intensely subsidized and full of sunk cost, driving will be/feel much cheaper for the middle class.

This leaves is where we are today, transit is not valuable to people with cars EXCEPT to get to places that are a pain to drive to (ie because of heavy traffic, expensive or difficult parking, or just general headache). So the main purpose of transit today is to provide some degree of mobility for people who can’t afford or can’t operate cars. That’s just not a big or rich enough market for a successful business to operate in.

But I think this could be very successful if paired with reforms to de-subsidize driving.

One change I think we should make is to drop the gas tax and raise car tax (more fair in an era of electric cars), ideally with higher taxes for heavier vehicles (they put more wear on the road!). This might be flat registration taxes as we use now, or more fair would be to charge the tax as VMT-based fee.

We should also use congestion pricing to keep our roadways moving efficiently.We should specifically not set that up as a mechanism to pay for transit, but as a tax to prevent gridlock on our roads and allocate road space more efficiently. Personally I think that revenue should just go in the general fund, but I don’t care too much about how it’s allocated as long as it’s sold to the public as the way we prevent traffic jams, not a driver vs transit political battle. (ie I think we should charge congestion pricing for the sake of ending traffic jams even if we just took the revenue and returned it to the public as a dividend.)

IMO the best possible combination of these approaches would be to roll the whole thing into state-level toll tags for each car. Private parking lots should also be able to charge the toll tag. Then all the payment for driving is as easy and frictionless as possible. And, ideally, that toll tag could have a little display to show the cost of the trip, so that drivers start to think in terms of closer to the true cost of driving on each trip, which would make it easier to compare this to the transit cost per trip.

Then as the transit business you’d be thinking about offering a compelling service with a lower cost per trip for passengers than the equivalent drive, and I think you’d especially want to focus on serving young passengers who haven’t bought a car yet, and hope that over time you could convert a larger share of people to opt-out of the sunk cost of buying a car in the first place.

But, as fun as it is to think about all this, heavily subsidizing drivers is very popular, and efforts to make them pay what it costs to operate and maintain the roads have largely failed politically, so I’m not very optimistic we’ll change this soon :)