Can RIPTA avoid the transit death spiral?

"...we are genuinely concerned about people’s ability to pay more. Is that where you can get the money? I don’t know that it is. I don’t think that’s the answer, but we are exploring it."

Minutes before yesterday’s meeting of the Rhode Island Public Transit Authority (RIPTA) Board, Governor Daniel McKee emailed board members urging the development of “a new proposal—one that balances new revenue strategies with targeted reductions to low-performing routes.”

The board voted to delay action on proposed service cuts pending a review of the Governor’s last-minute email, but the Governor’s email was remarkably ill-informed. None of his ideas were practical, realistic, or potentially effective.

The Governor made four suggestions:

• Eliminate or restructure the lowest-performing routes to better match demand and reduce costs;

• Reduce the management and administrative expenses of the Authority;

• Maximize federal funding, including the Job Access and Reverse Commute (JARC) program and indirect cost recovery; and,

• Implement a fare adjustment, as recommended in the efficiency report, including a fare increase aligned with inflation and a shift toward zone-based pricing, following more than 15 years without a fare change.

In June, Governor McKee refused to sign the budget, allowing it to become law without his signature. “This is not the time to raise fees and taxes that could have been avoided,” he said then. Two months later, Governor McKee is calling for a fare increase, basically a tax increase, for transit riders.

The Governor doesn’t oppose tax increases; he opposes tax increases on certain people.

Vicious Circles

In an interview with NPR, Washington Metropolitan Area Transit Authority General Manager Randy Clarke explained the public transit conundrum currently facing public transit systems across the country, including RIPTA.

Deep cuts to service, said Clarke, mean “service, as we know it, does not exist. Which then leads to less revenue for the system... Which then leads to more cuts... And the whole thing falls apart.”

An economist might call this a vicious circle, a “chain of events that reinforces itself through a feedback loop, with detrimental results.” Transit experts call it a death spiral. Vicious circles continue until the system collapses or an external factor breaks the cycle.

In the case of RIPTA, the external factor has to be political leaders—Governor Daniel McKee, House Speaker Joseph Shekarchi, and Senate President Valerie Lawson—realizing that public transit is a public good that needs robust financial support and expansion.

Investment in transit can lead to the opposite of a vicious circle, called a virtuous circle. In transportation, there is a concept called induced demand. This usually refers to increasing the number of lanes on a highway, leading to more cars on the road and greater traffic congestion. Transit officials who do not understand this often waste millions of dollars expanding highway lanes, only to cause more congestion, not less. Think about the $342.9 million spent to rebuild the I-95 Northbound Viaduct through Providence, which not only repaired failing bridges but also expanded the number of travel lanes. Has your drive time improved?

But there is another kind of induced demand. When the R-Line in Providence experimented with free fares, ridership increased by 40% in the first six months. Overall ridership, through the transit system, increased by 7%. It is known that adding routes will “induce” people to use the service. Adding more buses to a route, making the service more convenient, will also induce ridership. Think of it as “If you build it, they will come.” If you build more roads, you will create more traffic and pollution. If you build more public transit, you will create more passengers and decrease pollution.

RIPTA CEO Christopher Durand

I asked RIPTA CEO Christopher Durand about the possibility of the agency entering a vicious circle.

Steve Ahlquist: Are you worried about a vicious circle in which you start cutting and the routes start to do worse, and then you’ll have to make more cuts?

Christopher Durand: Yeah.

Steve Ahlquist: How do you avoid that? What is the strategy for that?

Christopher Durand: I think the leadership is giving us a clear signal that they have concerns about covering that full cost and the gap. We have to balance our budget, and we will, but in the long term, where that takes us, it’s not a positive direction for the agency.

Steve Ahlquist: Fare increases amount to a tax on the riders. The 5% of Rhode Islanders who use the bus service will see a tax increase because they’ll pay more per ride.

Christopher Durand: We’re not ruling out a fair increase. And I really do hear [your point]. We’ve heard this loud and clear from the General Assembly this session that we haven’t raised fares in forever... [but] the efficiency study shows that our fares are in line with our peers - and a lot of that has to do with a lot of agencies reducing or eliminating fares at this point. But we have to balance two things: First, we’re making massive reductions in service. We’re going to take away frequency or routes altogether and make it harder for you to use the system. It’s then difficult to charge them more...

Steve Ahlquist: You’d have to charge a lot more to make up for the fewer rides that might be coming.

Christopher Durand: Correct. And I don’t know what [money] that would yield, [or] when. The second part is that we are genuinely concerned about people’s ability to pay more. Is that where you can get the money? I don’t know that it is. I don’t think that’s the answer, but we are exploring it. It’s not off the table.

As Durand implied, fare increases can be another example of a vicious circle. Higher fares will cause people to use the bus less often, reducing revenues and requiring more cuts.

Here’s Durand’s full press interview:

In his letter, the Governor wrote, “[s]upporting public transit is important.” But these are words, not actions or allocation of funds. In Rhode Island, it’s easy to spend $330 million on a poorly maintained bridge, or millions more to widen highways through Providence, but $10 million for a functioning bus service? That’s a bridge too far.

Here’s the public speaking portion of yesterday’s RIPTA Board meeting. Every person who testified asked that the bus service be properly and fully funded, supported, and expanded.

See also: As RIPTA moves closer to draconian service cuts, riders protest in Kennedy Plaza