1、WORKING PAPER|Version 1.0|December 2024|1CONTENTSExecutive summary.2Introduction.4Findings:Trends,revenue sources,and financing for urban public transport operations before and during COVID.6Examining urban public transit operation funding cases.12Looking ahead and conclusion.21Appendix A.23Endnote.

2、25References.25Acknowledgments.31About the authors.31About WRI .32Working Papers contain preliminary research,analysis,findings,and recommendations.They are circulated to stimulate timely discussion and critical feedback,and to influence ongoing debate on emerging issues.Suggested Citation:Kustar,A.

3、,A.Davidson,T.H.Tun,B.Welle,S.Muralidaran.2024.“A fare look:Funding urban public transport operations.”Working Paper.Washington,DC:World Resources Institute.Available online at doi.org/10.46830/wriwp.21.00002.WORKING PAPERA fare look:Funding urban public transport operationsAnna Kustar,Adam Davidson

4、,Thet Hein Tun,Ben Welle,Santosh MuralidaranHIGHLIGHTS As the COVID-19 pandemic disrupted daily commuting patterns and restricted use of shared mobility systems,transit agencies faced falling revenue and unprecedented financial challenges.Case studies from Addis Ababa,Ethiopia;Bengaluru,India;Chicag

5、o,Hous-ton,and Washington,DC,United States;Copenhagen,Denmark;Jakarta,Indonesia;Mexico City,Mexico;Paris,France;and Rio de Janeiro and So Paulo,Brazil,reveal the impact of lost fare revenue and how various transit agencies were able to cope.On average,transit agencies in the United States and Europe

6、 have more revenue sources than those in Latin America and Africa,and with additional subsidies,were better able to stabilize total revenue through-out the pandemic.In most cities,farebox revenue alone is insufficient to fund the public transport services needed,especially when fares are set low to

7、ensure affordable mobility for all users.Since public transit generates a wide array of benefits that impact riders and non-riders alike,transit agencies should identify the revenue-generat-ing opportunities available in their local contexts.These opportunities can connect to direct funding(costs an

8、d fees incurred for transport),indirect funding(generated from economic activity supported by transport),or general funding(broad or unrelated revenue sources),thereby enabling more sustainable financing.2|EXECUTIVE SUMMARYBackgroundUrban public transit systems play a key role in creating healthy ci

9、ties.Transit networks also offer myriad benefits for the city:They can carry very large numbers of passengers;reduce congestion and greenhouse gas emissions;improve safety and efficiency;and provide more equitable and affordable access to jobs,education,and daily necessities.Transit is an essential

10、component for active civic and economic life in a city.Good-quality,reliable public transportation is vital to shift travel away from private vehicles,both in high-income countries where car dependency is already high and in low-and middle-income countries where vehicle ownership is growing.The COVI

11、D-19 pandemic dramatically disrupted travel patterns,wreaking havoc on urban public transit agencies finances.As ridership fell as much as 90 percent,these agen-cies faced unparalleled financial hurdles from a decline in fare revenue.As governments emergency COVID-relief funds approach expiration an

12、d lower ridership trends persist in some cases,transit agencies must find resilient,long-term sources of alternative revenue to sustain necessary services and further rebuild services.About this paperThis paper explores potential operational funding sources for global cities post-COVID-19.First,we e

13、xamine broad revenue sources that have been used for funding the operational costs of public transit agencies around the world,comparing funding sources before(201819)and during the pandemic(202022).A transit agencys operational costs include labor,maintenance,fuel,supplies,and other costs directly

14、related to providing service.We selected the cities analyzed based on data avail-ability,expert access,and geographic diversity.The final roster is limited to the principal formal transit agencies in Addis Ababa,Bengaluru,Chicago,Copenhagen,Houston,Jakarta,Mexico City,Paris,Rio de Janeiro,So Paulo,a

15、nd Washington,DC.We do not judge the political context of every case study,but rather provide examples to illustrate major themes and opportunities.We found that the final roster of transit systems fell broadly into two themes:those that rely predominantly on user fares versus those with government

16、support or dedicated taxes that cover a significant portion of operational expenses.By providing a global perspective,we are limited in the direct comparisons that we can make across systems as social,political,and finan-cial contexts can vary greatly.Rather,we investigate a range of funding instrum

17、ents based on their relationship to transport,classified as direct,indirect,or general.These are presented as a“toolbox”of options to supplement farebox revenue and enhance the financial resilience and stability of public transit globally.We draw insights from published budget reports,articles,surve

18、ys,literature reviews,and interviews with local transportation experts to offer an informed perspective on the sustainability of revenue sources for public transport systems in the post-pandemic context of“building back better.”ResultsBeyond fares,revenue for transit systems surveyed comes from a va

19、riety of sources connected to the range of benefits and opportunities that these systems offer(Figure ES-1).While each city has a different political and funding context,most places had connected some form of non-fare revenue to their transit systems and received subsidies or grants during the pande

20、mic.Most have some advertising revenue,some systems in East Asia have significant real estate revenue,and many agencies in high-income countries have connected some form of transac-tion tax to fund transit(sales,employment,real estate).Systems in many places have dedicated fees within the broader tr

21、ansport ecosystem to nudge behavior and fund transit,such as parking revenue or rideshare and gas taxes.Our analysis of operational revenue in selected cities reveals that while there are differences in revenue sources among cities in advanced economies and those in low-and middle-income countries,m

22、ost cities experienced a decline in fare revenue following the pandemics onset.Transit systems in cities in low-and middle-income countries are more likely to rely on fare revenue as their dominant income source.These transit systems suffered the steepest percentage drops in total annual revenue.Con

23、versely,agencies that received a portion of their revenue from local taxes or government subsidies saw a less significant decline in their total revenue,some even plateauing or increasing during this period due to emergency grants.RecommendationsWhen considering which funding sources to implement,tr

24、ansit agencies,cities,and state and national governments should work together to select the right taxes and revenue opportunities for their local contexts from a mix of direct,indirect,and general sources.Increasing the share of trips made by public transport can be a key tool in a citys or countrys

25、 climate budgeting,reducing emissions from the transport sector and advancing climate targets.While electric vehicles reduce WORKING PAPER|December 2024|3A fare look:Funding urban public transport operationsFigure ES-1|How transit agencies revenue sources changed from before to during the pandemicNo

26、tes:“Subsidies”include any revenue labeled as a subsidy,reduced fare subsidies,grants,or unspecified government contributions.Subsidies typically come from the national government,but can also be provided from state,provincial,or local sources.“Fees”include parking,tolls,registrations,or other reven

27、ue from non-ridership services.“Commercial”includes advertising revenue and real estate.“Others”include revenue sources labeled as“other”on financial documents and sources of revenue that do not fit any of the prior categories,such as interest and bond proceeds.BMTC=Bengaluru Metropolitan Transport

28、Corporation;SPTrans=So Paulo Transporte;WMATA=Washington Metropolitan Area Transit Authority;STC=Sistema de Transporte Colectivo;CTA=Chicago Transit Authority;*Movia(Copenhagen)received additional COVID relief support in the amount of 12.5%of total revenue.While this funding from“State/provincial ta

29、xes”and“local taxes”was greater than in previous years in order to offset revenue losses,it was not categorized a subsidy or grant.Sources:BMTC 2022;WMATA 2020;Houston METRO 2018,2021;CTB and CTA 2022;IFM 2021a,2023;Dillon and Widjarnarso 2023.The following sources are not publicly available:Copenha

30、gen funding values prepared by CONCITO with data from Trafikstyrelsen:https:/passagertal.dk/;So Paulo and Rio de Janeiro data prepared and provided by WRI Brasil in collaboration with the respective city agencies;Mexico City data provided by WRI Mxico;Addis Ababa data prepared by WRI Africa with the

31、 Addis Ababa Transport Bureau.Years represented are based on data availability.0%10%20%30%40%50%60%70%80%90%100%20192022Rio de Janeiro(Rio nibus)20192020Bengaluru(BMTC)20192022So Paulo(SPTrans)20182021Washington,DC(WMATA)20192021Mexico City(STC)20182020Copenhagen(Movia)20192021Jakarta(Transjakarta)2

32、0182020Addis Ababa(Anbessa)20182020Houston(METRO)20182020Chicago(CTA)20182021Paris(le-de-France Mobilits)Fees(parking,tolls,registration,etc.)CommercialOthersFaresMisc subsidies/grantsLocal taxesState/provincial taxesDanish COVID relief through taxes*4|emissions,they do not address congestion,sprawl

33、,land and resource consumption,or inequality.To counter this,funding policies need to look holistically at the full range of benefits provided by reliable transit.Public transport should be viewed as a public good with broad benefits instead of as a private one with personal benefits to enable an en

34、vironment supportive of high-quality,reliable,and affordable transport systems.While fares are an important revenue source,they should be affordable to ensure equitable access and be augmented by other sources,particularly those that benefit from transport access.These include other direct sources o

35、f revenue and incentives from elsewhere in the trans-port system such as tolls and parking fees;dedicated indirect sources of revenue generated from economic activity that transit helps support,such as sales or employment taxes;and funding from state and national budget programs to further climate,e

36、quity,and economic objectives(Table ES-1).INTRODUCTIONThe COVID-19 pandemic and ensuing government shutdowns precipitated a significant drop in public transit ridership in most places worldwide,posing challenges to the maintenance of reli-able service for those dependent on it(Welle and Avelleda 202

37、0;Xiao 2021).While emergency subsidies and recovery spending in some countries forestalled immediate service and job cuts during the initial pandemic phase,these one-time grants often fell short of covering all lost fare revenue and lacked long-term sustainability(Fried et al.2021).Now,transit agenc

38、ies,contend-ing with persistent ridership declines,confront a looming fiscal cliff characterized by unstable funding and an overreliance on fares and one-time grants,exacerbated by evolving trends such as remote work and electronic commerce,which further erode traditional public transport demand.Thi

39、s juncture is critical as urban public transport is recognized as pivotal for achieving emissions reductions and creating healthier cities.To meet the global target of limiting tempera-ture rise to 1.5 degrees Celsius and mitigate global warming,Table ES-1|Summary of funding sources discussedTYPEDIR

40、ECT FUNDINGINDIRECT FUNDINGGENERALTransport user paysDedicated taxesNational/State grantsExamples presented Fares Parking,curb,a and vehicle fees Congestion charging For-hire-vehicle fees Sales taxes Land value capture Employment taxes Climate taxes COVID relief funds Other“stop-gap”fundingPros Dire

41、ct connection among activity,revenue,and funding need Easiest to make a dedicated source Can more easily be used to influence behavior Very common,and often seen as business as usual,as it is often payment for services Creates a link to other beneficiaries where revenue cannot otherwise be captured

42、Often the largest source of funding that could be legislatively dedicated Can influence generational choices over infrastructure Can bring a high degree of stability and predictability to long-term funding Nearly always an option to pursue for budget gaps Can have a variety of uses Potentially a ver

43、y large source of funding Can be used to augment equity programs where enough revenue may not be raised elsewhereCons Usually does not cover full costs Can exacerbate equity issues without proper checks Leaves systems most vulnerable to financial and employment downturns Requires sophisticated polic

44、y regimes Susceptible to political power dynamics Many competing needs can mean low stability as a source Can lead to a dissociation between costs,benefits,and revenueNote:a Curb space,whether used by parked vehicles,delivery trucks,a bus shelter,outdoor seating for restaurants,or other uses,can be

45、leveraged by municipal governments by leasing it to the highest bidder(Beyer 2020).Source:Authors.WORKING PAPER|December 2024|5A fare look:Funding urban public transport operationsit is imperative that kilometers traveled by private vehicles be reduced by 414 percent below business-as-usual levels b

46、y 2030(Boehm et al.2022).However,mass transit straddles a spectrum where it can be treated as being a public good or a private good within different contexts and funding challenges(UN-Habitat 2013).While some advocate for fares covering operational costs based on the“user pays principle”(Hrcher and

47、Graham 2020),this approach overlooks the broader societal benefits of public transit.Urban public transport offers myriad benefits,including affordable access to opportunities including jobs,health care,and social connections;ecosystem and equity benefits;and alleviation of congestion.Diversifying r

48、evenue sources beyond fares is essen-tial for financial stability,enabling reliable service and positive rider experiences that create greater societal value.Our research investigated how cities can diversify transit agency revenue sources to reduce dependence on fares.We looked at the operational r

49、evenue sources for the major transport agencies in Addis Ababa,Ethiopia;Bengaluru,India;Chicago,Houston,and Washington,DC,United States;Copenhagen,Denmark;Jakarta,Indonesia;Mexico City,Mexico;Paris,France;and Rio de Janeiro and So Paulo,Brazil.Our work analyzed global transit agency funding mechanis

50、ms,addressing gaps in on-the-ground operational funding data.Leveraging World Resources Institute(WRI)networks,we compiled comprehen-sive operational funding data from cities in multiple low-and middle-income countries,assessing agency budget stability before and during the pandemic.Furthermore,we e

51、xplored various urban public transport funding instruments based on their relationship to transport,which are categorized as direct(costs and fees incurred for transport),indirect(economic activity supported by transport),or general(broad or unrelated revenue sources)(Ardila-Gomez and Ortegon-Sanche

52、z 2016).These instruments enable cities to tailor funding approaches,fostering stability and resilience in transit systems.While not universally applicable,combin-ing these tools can ensure more robust and sustainable public transit revenue streams.Among the numerous funding tools and policies cover

53、ed in this paper,not all will work in all contexts,but many can be combined to ensure more stable,resilient,and long-term revenue for public transit systems.MethodologyWe began by collecting data on how fare revenue compared with overall operations(and maintenance)budgets across a variety of agencie

54、s with different funding contexts.We selected cities with well-established public transport networks across several continents in areas where we had access to experts to be able to retrieve and contextualize local financial datasets on transit.The data allowed us to capture regional variations and t

55、rends in financial structures and tools,and to offer a descriptive analysis of the proportional changes in funding sources.We conducted key informant interviews with WRI colleagues,many of whom are senior managers with expertise in urban public transporta-tion and who actively collaborate with city

56、officials in Brazil,China,Ethiopia,India,Indonesia,Mexico,and Turkey(Appen-dix A,Table A-1).We also used data from the annual financial reports of transit agencies,when available,to compare ridership and revenue sources before(201819)and during(202022)the pandemic.The categorization of revenue strea

57、ms varied among cities,and we made informed efforts to organize them into the most logi-cal and cohesive groups.As the reporting and contexts varied greatly,the analysis presented is qualitative in nature,with the goal of presenting some hard-to-obtain data,especially in low-and middle-income countr

58、ies,and discussing their real-world contexts.In relevant instances,we offer a broader perspective revealed through our interviews and access to local experts,such as why a specific revenue category dominates in a particular city.Further,we examined how transit agencies in various parts of the world

59、are coping with and overcoming funding challenges.Specifically,we provide a survey of taxes and fees that can be collected from direct and indirect beneficiaries of urban public transport,as well as general funds,to broaden the revenue portfolio of transit agencies and build a more resilient funding

60、 system that can withstand fluctuations in ridership.Some limitations should be noted.We were limited to cover-ing formal agencies as our unit of analysis,and we focused on the primary or largest agency for the city,without taking into account the land use that it serves.Thus,the agency may cover on

61、ly a portion of the transit available and the areas where transit is most viable.In addition,despite the widespread use of infor-mal transit,or paratransit,in low-and middle-income countries,this paper does not cover the sector due to a lack of data and the independent operator structure of these sy

62、stems.Furthermore,while some of the tools mentioned are also used for financing infrastructure projects,this paper does not actively consider cases of capital costs.Capital expenses can be funded by investment groups,subsidized loans,or grants;are not comparable across regions;and are often seen as

63、one-time expenses with occasional state-of-good-repair needs.However,everyday maintenance is often considered part of the operating budget,which is the concern of this paper.Finally,though land use and density are fundamental to creating demand for transit,we did not account for geographic effects w

64、ithin each city or address the essential integration of land use and transport planning and implementa-tion(Cervero et al.2013).6|FINDINGS:TRENDS,REVENUE SOURCES,AND FINANCING FOR URBAN PUBLIC TRANSPORT OPERATIONS BEFORE AND DURING COVIDTrends among transit users This section looks at public transit

65、 ridership within the context of COVID-19,and the pandemics impact on fares and operat-ing revenue for select agencies.Most transit agencies rely on rider fares as a critical part of their operations budgets,but the COVID-19 pandemic severely disrupted this revenue stream.Stay-at-home orders and cha

66、ng-ing travel behaviors led to significant declines in ridership,with many individuals opting to forgo trips or choose alternative modes of transportation such as cars or bikes.While many areas have seen a resurgence in travel,the post-pandemic landscape remains characterized by fewer work trips,pos

67、ing ongoing chal-lenges for transit agencies worldwide(Haider 2023;Nicholas 2023).Despite efforts to recover,many public transportation networks have stabilized at only around 80 percent of pre-pandemic ridership levels(Figure 1),leaving a substantial gap in fare revenue compared with previous budge

68、ts.Ridership decline was partially due to trips not taken,as the pandemic caused a generational shift in office work patterns.Transit systems were often built around work commutes,but those trips are becoming less dominant.Companies in major cities are reducing office space to support hybrid work sc

69、hedules(Ziady 2023),especially for higher-income knowledge workers,where their work may no longer require in-person attendance(Bloom 2022).In tech-heavy San Francisco,many companies have left the city center and closed their offices,resulting in a near-record office vacancy rate of 25 percent downto

70、wn(Smith 2024).Consequently,Bay Area Rapid Transit,which serves San Francisco,has seen a significant drop in ridership,recovering only about 40 percent of pre-pandemic levels by 2022(Bloom 2022).Public transit trips also shifted to other modes.Due to the risk of infection,people favored individualiz

71、ed options like personal vehicles,walking,and cycling.In Istanbul,Turkey,despite having extensive public transit options,car usage increased by 45 percent,while biking rose 53 percent by 2022(Aydin et al.2022).Over 300 cities in 50 countries capitalized on the demand for sustainable modes by closing

72、 streets for vehicles to allow only pedestrians and cyclists or implementing pop-up bike lanes(Adriazola-Steil et al.2021).Bogot,Colombia,expanded its bike network early in the pandemic to reduce virus transmis-sion on buses(Nurse and Dunning 2021).Cycling in Bogot increased from 6.6 percent of all

73、trips in 2019 to 14 percent at the height of the pandemic,stabilizing at around 8 percent in 2023(ITDP 2023).RevenueWhile fares represent a significant proportion of total opera-tional revenue for most agencies,they are typically insufficient to cover all costs(the income of a transportation system

74、relative to its costs can be measured using the farebox recovery ratio,which is discussed in Box 1).With ridership shifting away from public transport,we would expect to see declines in overall fare revenue when comparing budgets from 2019 or before to 2020 and later.Figure 2 compares the percentage

75、 of revenue from vari-ous sources for the agencies from which we have collected data,before and during the pandemic.While each agency has unique funding sources and local conditions,we note that every agency saw decreased revenue from fares during the pandemic except for Anbessa in Addis Ababa(Figur

76、e 2).In the United States,the federal contribution to public transport operational costs is generally limited(except for COVID-19 relief,as discussed below).In 2019,federal funds constituted only about 7.9 percent of the total operating fund compared with 35.1 percent from local funds and 22.9 perce

77、nt from state funds(CRS 2024).The only long-term dedicated funding for transit improvement from the federal level comes from a minor portion of the$0.184 per gallon gas tax,which has neither changed nor been indexed to inflation since 1993,and these funds primarily go to capital projects(FHA 2022).M

78、ost operating funds are secured through agreements negoti-ated individually between local municipalities or organizations and transit agencies,typically established early in the transit agencys history.These negotiations outline each partys contri-butions,sourced from different taxes levied at the l

79、ocal or state level,and are renegotiated periodically(these types of funding are discussed more in depth in the section titled“Examining urban public transit operation funding cases”).There are some creative approaches to localized funding.Houston METRO WORKING PAPER|December 2024|7A fare look:Fundi

80、ng urban public transport operationsFigure 1|Percent change of visitors to transit stations compared with 2019 baseline(7-day rolling average)Source:Authors using data from Owahltinez 2022.Percent changePercent changeBengaluruJakartaAsiaLatin AmericaUnited States and CanadaEuropeBelo HorizonteMexico

81、 CityRio de JaneiroSo Paulo-90-70-50-30-1010305070Feb.2020Jun.Oct.Feb.2021Jun.Oct.Feb.2022Jun.Oct.Apr.Aug.Dec.Apr.Aug.Dec.Apr.Aug.-90-70-50-30-1010305070Percent changeFeb.2020Jun.Oct.Feb.2021Jun.Oct.Feb.2022Jun.Apr.Aug.Dec.Apr.Aug.Dec.Apr.Aug.Oct.ChicagoHoustonVancouverWashington,DCCopenhagenIstanbu

82、lLondonParisFeb.2020Jun.Oct.Feb.2021Jun.Oct.Feb.2022Jun.Oct.Apr.Aug.Dec.Apr.Aug.Dec.Apr.Aug.-90-70-50-30-1010305070Percent change-90-70-50-30-1010305070Feb.2020Jun.Oct.Feb.2021Jun.Oct.Feb.2022Jun.Apr.Aug.Dec.Apr.Aug.Dec.Apr.Aug.Oct.8|Figure 2|How transit agencies revenue sources changed from before

83、to during the pandemicNotes:“Subsidies”include any revenue labeled as a subsidy,reduced fare subsidies,grants,or unspecified government contributions.Subsidies typically come from the national government,but can also be provided from state,provincial,or local sources.“Fees”include parking,tolls,regi

84、strations,or other revenue from non-ridership services.“Commercial”includes advertising revenue and real estate.“Others”include revenue sources labeled as“other”on financial documents and sources of revenue that do not fit any of the prior categories,such as interest and bond proceeds.BMTC=Bengaluru

85、 Metropolitan Transport Corporation;SPTrans=So Paulo Transporte;WMATA=Washington Metropolitan Area Transit Authority;STC=Sistema de Transporte Colectivo;CTA=Chicago Transit Authority;*Movia(Copenhagen)received additional COVID relief support in the amount of 12.5%of total revenue.While this funding

86、from“State/provincial taxes”and“local taxes”was greater than in previous years in order to offset revenue losses,it was not categorized a subsidy or grant.Sources:BMTC 2022;WMATA 2020;Houston METRO 2018,2021;CTB and CTA 2022;IFM 2021a,2023;Dillon and Widjarnarso 2023.The following sources are not pu

87、blicly available:Copenhagen funding values prepared by CONCITO with data from Trafikstyrelsen:https:/passagertal.dk/;So Paulo and Rio de Janeiro data prepared and provided by WRI Brasil in collaboration with the respective city agencies;Mexico City data provided by WRI Mxico;Addis Ababa data prepare

88、d by WRI Africa with the Addis Ababa Transport Bureau.Years represented are based on data availability.0%10%20%30%40%50%60%70%80%90%100%20192022Rio de Janeiro(Rio nibus)20192020Bengaluru(BMTC)20192022So Paulo(SPTrans)20182021Washington,DC(WMATA)20192021Mexico City(STC)20182020Copenhagen(Movia)201920

89、21Jakarta(Transjakarta)20182020Addis Ababa(Anbessa)20182020Houston(METRO)20182020Chicago(CTA)20182021Paris(le-de-France Mobilits)Fees(parking,tolls,registration,etc.)CommercialOthersFaresMisc subsidies/grantsLocal taxesState/provincial taxesDanish COVID relief through taxes*WORKING PAPER|December 20

90、24|9A fare look:Funding urban public transport operationsalso operates high-occupancy vehicle(HOV)toll lanes on sev-eral major highways in the city.Single-occupancy vehicles can access express HOV lanes by paying a toll,thereby generating additional funding for transit(Houston METRO 2023).Even befor

91、e COVID,public transport ridership peaked in the United States in 2014 and has been declining due to vari-ous factors such as gasoline prices,the growth of ride-hailing companies,and fare increases,among others(Mallett 2022).Although there are no national projections of ridership,indi-vidual operato

92、rs anticipate that ridership will take several years to rebound to pre-pandemic levels,and agencies will face additional budget deficits once federal COVID-relief subsidies run out(Brey 2023).Box 1|Farebox recovery ratioThe farebox recovery ratio(FRR)is an indicator employed to gain insights into th

93、e direct financial income of a public transportation system relative to its costs.It is calculated by dividing the systems total fare revenue by its total operating expenses.A higher FRR indicates that a greater percent-age of operational costs is covered by fare revenue.Conversely,a lower ratio sug

94、gests a heavier reliance on other funding sources to sustain operations.FRR can vary drastically among agencies and across geographies,depending on fare pricing,ridership,system efficiency,and non-fare revenue sources(see Figure B1-1).FIGURE B1-1.FAREBOX RECOVERY RATIOS VARY SIGNIFICANTLY ACROSS TRA

95、NSIT AGENCIES(%),202022Notes:Years in parentheses indicate the year the data are from.In calculating the farebox recovery ratio for US transit agencies,we considered fare and operational costs from all modes(e.g.,buses and rail)together that fall under the same agency.Public transport agency types i

96、nclude city,country,or local government unit or department of transportation;independent public agency or authority of transit service;Metropolitan Planning Organization,Council of Governments,or other planning agency;state government unit or department of transportation;and subsidiary unit of a tra

97、nsit agency,reporting separately.BMRCL=Bengaluru Metro Rail Corporation Limited;DMRC=Delhi Metro Rail Corporation;CMRL=Chennai Metro Rail Limited;SPTrans=So Paulo Transporte;MTA=Metropolitan Transportation Authority.TRT=Tianjin Rail Transit;CTA=Chicago Transit Authority;AMTR=Amoy Transit Rail;SEPTA=

98、Southeastern Pennsylvania Transportation Authority;MBTA=Massachusetts Bay Transportation Authority;BART=Bay Area Rapid Transit District;WMATA=Washington Metropolitan Area Transit Authority.Source:Authors,compiled from Metro Taipei 2021;FTA 2022;Dhok et al.2021.104.4687.6479.897961.1952.3248.931.0529

99、.5829.3127.5827.4722.1417.8716.5116.1111.910.8410.659.868.97.27.094.841.82020406080100120Farebox Recovery RatioBMRCL(Bangaluru,India)2020Taipei MRT(Taipei,Taiwan)2021DMRC(Delhi,India)2020Rio nibus and SMTR(Rio de Janeiro,Brazil)2022CMRL(Chennai,India)2020Guangzhou Metro(Guangzhou,China)2020SPTrans(S

100、o Paulo,Brazil)2022Movia(Copenhagen,Denmark)2020Nanjing Metro(Nanjing,China)2020le-de-France Mobilits(Paris,France)2021MTA(New York,NY)2021Shenzhen Metro(Shenzhen,China)2020Beijing Infrastructure Investment(Beijing,China)2020TRT(Tianjin,China)2020CTA(Chicago,IL)2021AMTR(Xiamen,China)2020SEPTA(Philad

101、elphia,PA)2021Suzhou Rail Transit(Suzhou,China)2020MBTA(Boston,MA)2021BART(San Francisco Bay Area,CA)2021Transjakarta(Jakarta,Indonesia)2021King County Metro(Seattle,WA)2021Twin Cities Metro Transit(Minneapolis/St.Paul,MN)2021WMATA(Washington,DC)2021LA Metro(Los Angeles,CA)202110|Box 1|Farebox recov

102、ery ratio(cont.)Table B1-1 shows the farebox recovery ratios for three US transit agencies included in this study,comparing the declines in FRR from before the pandemic(2019)to after its first year(2021).These examples show a drop of around 60 percent or greater compared with the 2019 baseline.Chi-c

103、ago and Washington,DC,had higher FRRs before the pandemic,but that also meant that they had larger budget gaps to make up for to maintain essential service in 2021.TABLE B1-1|Farebox recovery ratios declined between 2019 and 2021.Here are three US examples:CITYAGENCY20192021Chicago,ILChicago Transit

104、 Authority(CTA)40.7%16.5%Houston,TXMetropolitan Transit Authority of Harris County,Texas(Houston METRO)11.5%4.2%Washington,DCWashington Metropolitan Area Transit Authority(WMATA)33.0%4.8%Source:FTA 2022.Urban transport systems in low-and middle-income countries often generate limited revenue beyond

105、fares due to factors such as insufficient tax collection(Ardila-Gomez and Ortegon-Sanchez 2016).With good reason,stay-at-home orders also decimated transit ridership where they were followed,and cascaded into a driver shortage,causing significant additional unplanned losses in revenue.Of the cities

106、observed in Figure 2,Rio de Janeiros agency,Rio nibus,which was fully funded by fares before the pandemic,experienced the most significant loss of revenue,25 percent,from 2019 to 2022,when adjusted for currency depreciation.Bengalurus Bengaluru Metropolitan Transport Corporation,which also earned mo

107、st of its revenue from fares(83 percent)in 2019,saw a loss of 13 percent in total revenue after the pandemic began.In contrast,agencies in Chicago,Houston,Paris,and Washington,DC,received enough government support through subsidies(i.e.,emergency funding related to COVID relief)to have higher total

108、funding after the pandemic began,increasing by 2 percent,17 percent,5 percent,and 13 percent,respectively.In Brazil,ridership was decreasing even before the pandemic due to a combination of private motorization and declining service quality(NTU 2023).Historically,Brazil had limited government suppor

109、t for public transport,with operational costs primarily covered by fares(Pelegi 2023).The situation changed during the pandemic as more than 163 cities received some support for operational costs,compared with fewer than 10 cities before(NTU 2023).This change was mainly aimed at mitigating the decli

110、ne in ridership during COVID,which led to a significant drop in fare revenue.Due to low ridership,55 bus-operating companies were closed,resulting in a loss of over 36 billion reals($7.3 billion)and 90,000 jobs in the urban bus sector between March 2020 and February 2023(Pelegi 2023).As seen in Figu

111、re 3,neither the supply of public transport nor ridership in Brazilian cities had recovered to pre-pandemic levels as of May 2023.Addis Ababa stands out as an exception where the total revenue of Anbessa City Bus increased by 152 percent from 2018 to 2021.Government grants and subsidies dedicated to

112、 operational costs stayed relatively constant,with most growth coming from fare revenue.Part of this is explained by less emphasis on stay-at-home orders,meaning that few trips disappeared from the system.The further increase is likely due to a higher utilization of bus fleets,from a low point of 38

113、 percent of buses in service in 2018 to 94 percent of buses in 2021,as the Anbessa City Bus agency sought to meet transport demand.The average bus was also used more heavily during this period,from about 108 kilometers per bus per day(km/bus/day)in 2018 to 154 km in 2021,increasing the number of pas

114、sengers being served from about 630 passengers/bus/day in 2018 to 810 passengers in 2021(Girma 2023).Overall revenue from fares increased dramatically due to increased ridership but was offset by higher expenses for the larger service offering,with the bus network operating at a net loss of 8 ETB($0

115、.17)per km in 2021.Both Jakarta(Transjakarta)and Mexico City(Sistema de Transporte Colectivo)aim to have low,regulated fares,with rates set at 3,500 rupiah,or$0.35,per trip in the former case and 5 pesos,or approximately$0.35,in the latter(ADIP 2023;Globetrotter 2023).Typically,fares are kept locall

116、y affordable to WORKING PAPER|December 2024|11A fare look:Funding urban public transport operationsFigure 3|Public transport ridership and supply of transit vehicles,measured as a percentage of pre-pandemic values,have stabilized in BrazilSource:Adapted from NTU 2023.Number of passengers(as a%of Feb

117、ruary 2020)Supply of buses(as a%of February 2020)020406080100MayMar.Jan.2023Nov.Sep.Jul.MayMar.Jan.2022Nov.Sep.Jul.MayMar.Jan.2021Nov.Sep.Jul.MayMar.Apr.Feb.Dec.Oct.Aug.Jun.Apr.Feb.Dec.Oct.Aug.Jun.Apr.Feb.Dec.Oct.Aug.Jun.Apr.Feb.202010047.379.582.981.982.287.384.52060.956.366.477.676.983.6Percent of

118、 pre-pandemic levels(Feb 2020)ensure equitable access for mass usership and are consequently usually insufficient to cover operational costs.Interviews with WRI urban mobility experts in Mexico revealed that the average operating cost per trip in Mexico City is 18 pesos,or$0.93.In such cases,public

119、funding becomes necessary and can take various forms,including compensating for reduced fares for specific user categories,covering losses at the end of the year,or providing payments per trip based on operating costs(Ardila-Gomez and Ortegon-Sanchez 2016).During the pandemic,state-owned transit com

120、panies in Mexico were eventually aided by government subsidies,while private companies had limited access to subsidies,which also led to reduced income and decreased service.The sector was estimated to have lost 28 billion pesos($1.65 billion)between April and December 2020 and 18 billion pesos($1.1

121、 billion)from January to September 2021(Hernndez et al.2022).Jakartas government has provided subsidies for transport for several years,recognizing that affordable mobility is an equity concern as many low-earning workers rely on these services for travel to work,school,and other daily necessary des

122、tinations.From 2004 to 2021(for years with available data),the govern-ment continuously increased subsidy support for transit(as seen in Figure 4),as the city expanded the Transjakarta network to lower-density peri-urban areas while maintaining the same fare.This expansion led to an increase in ride

123、rship,and correspond-ingly,the annual subsidy per customer rose from approximately 450 rupiah($0.05)in 2004 to 22,000 rupiah($1.54)in 2021(Dillon and Widjarnarso 2023).Although ridership declined initially during the pandemic,Transjakarta recovered to pre-pandemic levels by July 2023.However,public

124、transport in smaller Indonesian cities has continued to struggle with opera-tional funding challenges.12|EXAMINING URBAN PUBLIC TRANSIT OPERATION FUNDING CASESOne standard of thoughtful policy design is matching revenue sources with related needsessentially using funds generated from activities asso

125、ciated with the ecosystem to build a better ecosystem.Yet,practical public administration is often tasked with matching available funds with available needs regardless of relationship.Funding for public transportation in the real world often has elements of bothseeking to reinvest revenue attributed

126、 to transport into transport and filling budget gaps with available sources.When money collected as part of the overall transport system is used to fund transport,the beneficiaries are said to be direct.Funds collected from an economic activity that is supported by transport are usually considered a

127、n indirect mechanism.Funds without a clear link to transport are considered for general ben-efit of the population.There are a variety of mechanisms across geographies,from fares and fees to property taxes,commercial revenue sources,and general fund allocations.Table 1 provides a summary of these fu

128、nding instruments based on the relation-ship between the sources and beneficiaries(Ardila-Gomez and Ortegon-Sanchez 2016).This section looks at these relation-ships using real-world policies as examples.Types of funding sources are discussed here in descending order of strength of the relationship b

129、etween the funding source and public transport.Direct-benefit mechanismsDirect-benefit mechanisms are ones in which the use of the funds has a direct relationship to the source of revenue.Pay-ments such as transit fares,parking meter charges,fuel taxes,and vehicle registration fees are examples of w

130、ays to raise revenue that can influence choices related to transportation and be earmarked to directly support transport projects and services.Farebox revenueAs discussed in the“Findings”section,one of the most direct sources of income for a transit agency is fare revenuerevenue earned from selling

131、tickets and passes to passengers.When ridership is high and fares are well-priced,this can be an effec-tive source of revenue to cover most operational costs.However,fully relying on fare revenue puts a transit agency at financial risk if ridership drops due to changing mobility patterns,travel rest

132、rictions,economic conditions,or other reasons.Furthermore,transit agencies prioritizing revenue generation may overlook other important elements of transit systems,such as service coverage,equity,and environmental sustainability.A drop in ridership could lead to a downward spiral as fares cover even

133、 fewer operational costs and the agency must cut services or Figure 4|Transjakartas revenue from subsidies increased after system expansionSource:Dillon and Widjarnarso 2023.205.76248.34274.52288.76379.46Not available446.35524.73675.14303.59234.86116.13123.04230.54246.43255.41Not available1293.09207

134、8.092588.072723.422764.840.00500.001000.001500.002000.002500.003000.003500.00200720082009201020112012-201620172018201920202021Ticket revenueSubsidyBillion rupiahWORKING PAPER|December 2024|13A fare look:Funding urban public transport operationsreduce quality,leading to further dissatisfaction and ad

135、ditional loss of ridership(Litman 2004).Riders will shift to private modes of travel,while those who are fully dependent on public transit services for daily mobility,such as children,the elderly,and those without access to private vehicles,will be dispropor-tionately impacted by service cuts.In the

136、 United States and many other Western countries,it is uncommon for revenue from transit fares to fully cover opera-tional and maintenance expenses(Z.Chang and Phang 2017).In the United States,almost 90 percent of public transport agencies had farebox recovery ratios of less than 20 percent in 2022(F

137、igure 5).Transit systems in East Asian cities(outside mainland China)such as Tokyo Metro and Hong Kong Mass Transit Railway use a slightly different metric that considers the operating ratio(all revenue sources against costs),which encompasses revenue from a broader portfolio that also includes real

138、 estate(Simpson 2022;Blaze 2019).Prior to the pandemic,this allowed private railway conglomerates in Tokyo,Japan;Taipei,Taiwan;Singapore;Shanghai,China;and Hong Kong to generate ratios greater than onea surplus.Central Tokyo and Hong Kong boast a public transport mode share of 90 percent and operate

139、 without relying on direct government subsidies(Z.Chang and Phang 2017).In South Asia,Mumbai Metro One Pvt LTD(MMOPL)achieved a farebox recovery ratio of 193 percent in 2020(Dhok et al.2021).1 MMOPL operates only one metro line,which connects two high-traffic suburban sta-tions,Andheri and Ghatkopar

140、,which account for approximately 60 percent of the total ridership.Figure 5|Ninety percent of transit agencies in the United States had farebox recovery ratios under 20 percent in 2022Note:In calculating the farebox recovery ratio for US transit agencies,we considered fare and operational costs from

141、 all modes(e.g.,buses and rail)together that fall under the same agency.Public transport agency types include city,country,or local government unit or department of transportation;independent public agency or authority of transit service;Metropolitan Planning Organizations,Council of Governments,or

142、other planning agency;state government unit or department of transportation;and subsidiary unit of a transit agency,reporting separately.Source:Authors,using data from FTA 2022.030060090012001500291 to 300121 to 130111 to 120101 to 11091 to 10081 to 9071 to 8061 to 7051 to 6041 to 5031 to 4021 to 30

143、11 to 200 to 10Number of transit agenciesFarebox recovery ratio(%)1,2132507935171024562124Table 1|Funding instruments by type of sourceTYPEDIRECT SOURCESINDIRECT SOURCESGENERAL SOURCESTransport user paysDedicated taxesNational/State/Local budgetsDefinitionRevenue sourced directly from transport acti

144、vities and services,irrespective of modeSpecific revenue sourced from broad economic activities that are generally enhanced by access to transportRevenue sourced from general budgets,typically without a clear connection to transport;these funds could easily be dedicated to other needs and may be tem

145、poraryExamples Transit fares Parking,curb,a and vehicle fees Fuel taxes Congestion charging For-hire-vehicle fees Sales taxes Land value capture Employment taxes COVID relief funds Property taxes Low-interest loans Grant programsNote:a Curb space,whether used by parked vehicles,delivery trucks,a bus

146、 shelter,outdoor seating for restaurants,or other uses,can be leveraged by municipal governments by leasing it to the highest bidder(Beyer 2020).Source:Adapted by authors from Ardila-Gomez and Ortegon-Sanchez 2016.14|FARE EVASION AND FREE FARESAnother problem that worsened during the pandemic,when t

147、hose with other mobility options left the system,was fare eva-sion;even one percentage point in fare evasion can cost agencies millions of dollars in annual revenue(Cantillo et al.2022).New York Citys Metropolitan Transportation Authority(MTA)loses$500 million a year;Washington,DCs Washington Metrop

148、olitan Area Transit Authority(WMATA)estimates 13 percent of metro trips are unpaid,costing$40 million in 2022;and Santiago,Chile,observes 2545 percent evasion on buses,partly because bus drivers who attempt to stop fare evasion may be at risk of being attacked(Surico and Byington 2023;Cantillo et al

149、.2022).(These statistics note only the costs to the agencies.Fare evasion is a multifaceted issue that is often intermixed with equity,housing,and policing policy.Holistic solutions cannot be created by the agencies alone.)The percentage of operational costs covered from fares varies greatly among c

150、ities and regions,with some cities going fare-free(traub and Jaro 2019).Before the pandemic,nearly 100 cities globally(mostly small to medium size)had implemented fare-free public transport systems(Weghmann 2019).Examples of fully implemented free transport schemes include those in Ghent(Belgium),Te

151、mplin(Germany),Aubagne(France),and the country of Luxembourg.Other cities with high rates of tourism have made transit free for only residents,such as Tallinn(Estonia)and Frdek-Mstek(Czechia)(traub and Jaro 2019).Examples of partially free programs also exist.In December 2023,So Paulo implemented fr

152、ee fares on Sun-daysencouraging mobility on what is traditionally the lowest ridership day of the week.In another case,the state of Karna-taka in southern India has granted women free bus rides as of 2023 to help empower them,since they no longer need to ask family for money to take transit(Dhillon

153、2023).The govern-ment launched the program to encourage more women to seek employment opportunities(Sanjay 2023).Fare-free transit is more common in small agencies that already depend on other sources of funds,where removing fares is taken as a strategy to increase ridership and cut expenses related

154、 to infrastructure,staff,and enforcement(Weghmann 2019).Pro-ponents argue that abolishing fares also addresses issues of social exclusion and inequality,shifting the role of public transport from a commodity to a common good,similar to libraries and parks provided to the community(Weghmann 2019).Pra

155、cti-cally,the challenge lies in figuring out how to make the fare-free model financially viable in the long term,as fares in most cities constitute a crucial component of the operation and mainte-nance of public transport.DEMAND-SIDE SUBSIDIESTo avoid contributing to economic distortions and private

156、 sector inefficiencies,some transport economists prefer demand-side subsidies(Gwilliam 2016).The subsidies are typically directed at select population groups,often involving direct compensation through reduced or free fares for youths,seniors,people with disabilities,and those eligible for low-incom

157、e discounts.How-ever,these can have additional administrative costs in ensuring individuals of targeted groups are identified and adequately served.Funds for these programs can come from internal revenue where higher fares from some services cover lower fares from others,or from government programs

158、that meet overlap-ping goals,such as workforce development programs and health programs.Another demand-side subsidy may come in the form of employee benefits,often aided by the tax code,where the employer partially or fully covers the cost of a transit pass for its workers.Table 2 covers a sampling

159、of discounts offered by transit agencies in Latin America.Fuel and motor vehicle feesLike most Western European countries,Denmark does not subsidize private vehicles and imposes heavy fuel taxes at 0.64 per liter,or about$2.76 per gallon(Locher 2021;GIZ 2019).In November 2018,taxes brought the total

160、 cost at the pump to about$6.20 per gallon,or about twice as much as in the United States($3.33),reducing peoples eagerness to drive and serving as a vital source of funding for public servicesincluding transit and bike infrastructure(GIZ 2019).Not only do policies in Denmark raise the cost per mile

161、 of private vehicle travel,they also impose a high excise tax on new vehicle purchases depend-ing on the vehicles price and carbon dioxide(CO2)emissions(EC n.d.).Estimations range from between 70 percent for a smaller car to up to 180 percent for a high-end sports car.With only about 29 percent of h

162、ouseholds choosing to own private vehicles(with the large fees constituting part of the decision),Copenhagen is,in part,able to focus on more space-efficient modes of urban travel such as public transit,bicycling,and other sustainable options(Cortright 2019).High taxation and fee policies function b

163、est when transport alternatives exist and fees are implemented at the state or national level,as cities may be restricted from authorizing them on their own,or high local taxes can cause residents to relocate outside of the city where they may avoid the fees(Tiebout 1956).Electric vehicle(EV)adoptio

164、n will cause a drop in these funds unless fee and tax structures are revised.Currently,fuel taxes are very simple to administer:They are collected wholesale from refineries and the costs are passed on to consumers as higher prices at the gas pump,rather than being collected at each WORKING PAPER|Dec

165、ember 2024|15A fare look:Funding urban public transport operationsTable 2|Targeted discounts act as demand-side subsidies for transport-disadvantaged people in select Latin American citiesCITYPOPULATIONTRANSPORT SUBSIDYBuenos Aires,ArgentinaPersons with disabilitiesFreeRetirees,universal assignment

166、per child,domestic workers,Progresar scholarship holders,veterans,individuals belonging to social programs(Hacemos Futuro and Monotributo Social Inscrito en Redes,Argentina Trabaja)55%discountBogot,ColombiaPersons with disabilities10 trips(or 5 round trips)free per monthSeniors13.6%discountLow-incom

167、e individuals28%discountLa Paz,BoliviaPersons with disabilities50%discountLima,PeruPersons with disabilitiesFreeMexico City,MexicoPersons with disabilities,seniors,and some studentsFreeMontevideo,UruguayPersons with disabilitiesFreeStudents3050%discount depending on the student typeSeniors5070%disco

168、unt depending on retiree typePanama City,PanamaStudents50%discountSeniors31%discountPersons with disabilities31%discountQuito,EcuadorSeniors,persons with disabilities,students50%discountSo Paulo,BrazilSeniors,persons with disabilities,new mothersFreeSantiago,ChileStudents67%discountSeniors50%discoun

169、tSource:Scholl et al.2022.transaction(CRS 2022).However,growth of the EV market will also add complexity to collection.For example,if all new passenger car sales in high-income countries are electric by 2030 and electricity taxes remain lower than fuel taxes,then fuel tax revenue would drop by appro

170、ximately 30 percent by 2030 and 7090 percent by 2040(ITF 2021)while increasing the costs of administration.To mitigate lost revenue,several US states,including Alabama,Texas,West Virginia,and Wyoming,have imposed additional registration fees on EVs to make up for lost revenue from fuel taxes(Lee and

171、 Aton 2023).However,Texass$200 annual fee is more than twice the amount needed to replace the gas tax and may hinder widespread adoption of EVs(Lee and Aton 2023).One way to accelerate and help fund the shift to EVs,particu-larly for public transit(e.g.,electric buses),would be to lower or eliminate

172、 subsidies for fossil fuels.Estimated global explicit fossil fuel subsidies(undercharging for supply costs)reached a record high in 2022 of$1.3 trillion due to spikes in energy prices caused by Russias invasion of Ukraine and post-pandemic economic recovery,as well as devaluations of currencies incl

173、ud-ing the British pound,Turkish lira,and Sri Lankan rupee(Black et al.2023;Banali 2022).Removing these subsidies will take time and can change household cost structures.Where equity concerns exist,government savings from removing subsidies can be used to compensate vulnerable households(BTS 2023).I

174、ndonesia demonstrates a successful case,reducing fossil fuel 16|subsidies from about 20 percent of government spending in 2005 to less than 5 percent in 2021,allowing for more invest-ment in welfare,housing,and clean water(CUT 2019).Taxi and ride-hail taxes A variation of the motor vehicle usage fee

175、 is a tax or fee on the use of ride hailing in cities.This may come in the form of a surcharge on rides purchased through mobile applications.The arrival of ride-hail apps such as Uber and DiDi in major cities added additional congestion downtown.Ride hailing has also taken riders away from public t

176、ransportation,with studies from US cities estimating that 15 to 30 percent of ride-hail trips would have otherwise been taken using transit(Gehrke et al.2018;Henao and Marshall 2019).This led Washington,DC,to implement a ride-hailing tax for trips that begin in the city to help maintain its dedicate

177、d transit funding(Siddiqui 2021).In and around Washington,DC,including parts of the neigh-boring states of Virginia and Maryland,the WMATA provided 300 million bus and metro trips annually before the pandemic(WMATA 2023).While WMATA transit ridership plum-meted during the pandemic,it had already bee

178、n declining since 2012,leading WMATA to seek alternative sources of funding independent of ridership to defray operating costs.The initial 1 percent ride-hail tax charged within the District of Columbia was increased to 6 percent in 2018,with the goal of raising$178.5 million in new funding for the

179、transit agency(WPEB 2018).This also brought the tax rate for these services in line with the general sales tax and fees already levied on taxis.Other cities,such as So Paulo and Mexico City,have levied fees on ride-hail services dedicated to funding urban mobility,although So Paulo halted the fee in

180、 September 2023(Table 3)(Welle et al.2018;Coelho 2023).It is worth noting that policies that solely tax app-based ride hailing without a comprehensive policy,like supporting shared rides or implementing wider taxes on other private vehicle travel,may risk creating uneven incen-tives for car users.Ri

181、de-hailing taxes or fees can benefit city transportation by reducing demand and generating revenue.However,if this revenue isnt reinvested in transport,like Rhode Islands 7 percent ride-hail tax toward the state general fund,it minimally impacts the transport ecosystem(Welle et al.2018).For taxes to

182、 truly support public transport,they must be dedicated to transport needs,as seen in New York and Washington,DC.This dedicated funding not only enhances public transit but also encourages its use over private ride-hailing services.Area entry and tolls In populous cities with ample public transit,roa

183、d users benefit from less congestion as many travelers take transit.This benefit can be captured in various fees.Road and congestion pricing is based on the simple idea that limited resources,like urban road space,should not be free,as it leads to overuse,congestion,and poor outcomes for all users.T

184、he goal is to ensure equitable shar-ing of road space.The city can pose and enforce area entry fees or congestion charging,also countering the negative externali-ties of private vehicle traffic by reducing noise,emissions,and air pollution.London and New York City both have populations of over eight

185、 million people and extensive public transit networks with 2022 annual ridership of 3.3 billion and 1.4 billion rides,respectively(SRD 2023;MTA 2023a).Transport for London,the primary public transport agency providing London Buses,the London Table 3|Measures to gain revenue from ride-hailing service

186、s in selected cities in the AmericasCITYWHAT IS THE TAX?WHERE DOES IT GO?Mexico City1.5%of fareFund for taxis,transportation,and pedestriansSo Paulo$0.04/mile;discounts up to 90%for shared ridesDedicated to fulfilling the goals of the citys urban mobility plansFortaleza2%of fare,reduced to 1%if comp

187、any pays for“mitigation”measures that reduce road usage,like bus lanes,bike lanes,and sidewalksMitigation measures for road usageWashington,DC6%of fare17%to Department of For-Hire Vehicles;83%to Washington Metropolitan Area Transit Authority(bus and metro)New York City8.875%of fare;surcharges of$2.7

188、5 per trip(%0.75 per rider if pooled)in lower and midtown ManhattanSurcharge goes to Metropolitan Transportation Authority(bus and metro);tax revenue split mainly between the state and citys general fundSource:Welle et al.2018.WORKING PAPER|December 2024|17A fare look:Funding urban public transport

189、operationsUnderground,the Elizabeth line,and several rail lines,spends 6.6 billion($8.3 billion),or 79 percent of its annual budget,on operational costs(TfL 2023).New York Citys MTA operates subways,buses,commuter trains,and paratransit at a cost of$19.4 billion(MTA 2023b).In London,congestion charg

190、es were first implemented in 2002 involving a strategy that addressed both the supply and demand sides of transportation by introducing 300 additional buses to central London while activating the congestion charging zone(Qiu et al.2018).In 202223,congestion charges raised 358 million($454 million)on

191、 vehicles entering the zones between 7 a.m.and 6 p.m.Monday to Friday,and low-emission zone charges raised an additional 480 million($609 million)from vehicles that did not meet required emissions guidelines,together contributing 15.8 percent of gross service income(TfL 2023).It is worth noting that

192、 the operating costs of the London scheme have been highapproaching 50 percent of revenue in some periods due to the complexity of enforcement.Congestion fees tend to be one of the more controversial direct fees,as seen in New York City.By definition,the fee is for vehicle access that was previously

193、 unpriced or severely under-priced.New York has had past attempts with congestion pricing.For several decades it has had an uncoordinated web of free and tolled bridges,which incentivized toll shopping and excess mile-age for some drivers.A specific congestion charge zone was first seriously propose

194、d in 2007,but ultimately blocked at the state level.The plan was reconstituted by the Governor in 2019 and went through several planning phases and political administra-tions,settling on a$15 charge to enter Manhattan,cut traffic by 17%,and raise$1 billion for public transportation(Brosnan and SNS 2

195、023;Adcroft and Liebman 2023;MTA n.d.).Only three weeks before implementation in June 2024,this plan was paused by the Governor.Many suspected that the motivation was the impact that suburban opposition could have on the upcoming election(C.Chang 2024).Days after the 2024 elections,the same Governor

196、 announced her intent to move forward with congestion pricing at a lower$9 fee starting in early January 2025.This long journey is an extreme example of how politically complex enacting new revenue sources can be.On-street parking feesAlmost all urban areas have a significant proportion of land spac

197、e dedicated to parking,often both on-and off-street,and charging for its use can serve as a reliable source of revenue(Table 4).The flexibility of charging allows for higher rates during peak demand times and can encourage a mode shift to public transport when transit is available and parking is pri

198、ced higher(ITDP 2005).Street parking spaces have relatively low operating costs,estimated at an average of$350/space/year in France,for example,and generate average revenue of$1,000/space/year(Hoang et al.2014).This revenue is from a combina-tion of parking permits,meters,and fines,which must be set

199、 at a price that meets the needs of users while minimizing the negative effect of private vehicles.Bogot and San Francisco have implemented on-street parking charges to manage parking demand and support public trans-port,placing a price on a limited supply of spaces.In Bogot,as in other developing c

200、ities,only 1215 percent of urban trips are made by private cars,which are mostly owned by upper-income groups(Ivarsson et al.2022;TUMI 2023).In 2021,Bogot implemented a new charge for on-street parking to enhance economic activity as fees are expected to increase parking rota-tion,improve foot traff

201、ic around local businesses,and better manage curb space for deliveries.Initial revenue will fund the expansion of the on-street parking network(signage,electronic payments,enforcement)and surplus revenue will be re-invested in TransMilenios public transport services as a subsidy for operating costs

202、and improvements in service quality(Ivars-son et al.2022).While Bogots implementation is recent,the San Francisco Municipal Transportation Agency(SFMTA)has been manag-ing street parking since 1947,from which revenue and taxes cover one-third of SFMTAs budget(Crockett 2014;Hoang et al.2014).Notably,S

203、FMTA started a demand-response pilot in some areasincreasing rates as parking gets fullerwhich resulted in improved parking availability.While it was intended to be revenue neutral to promote other benefits,it ended up earning a slight increase in revenue.As the transit agency faces changes in rider

204、ship and budget deficits,this program cre-ates a mechanism to link parking demand and transit demand(SFMTA 2021;Chatman and Manville 2014).Recently,more cities have been inspired by this example.During the pandemic,in 2022,Porto Alegre and Novo Hamburgo,two cities in southern Brazil,explored alterna

205、tive sources of financial support for public transport by channeling revenue from parking fees,with the potential to bring in an additional 20 million reals($4 million)per year(Rimolo and Brasil 2022).Further data on surplus parking revenue are provided in Table 4.As Paris is becoming more pedestria

206、n and bike oriented,Pari-sians voted in favor of raising parking fees in the city threefold for large sport utility vehicles(SUVs)in February 2024(Rose 2024).Internal combustion engine vehicles of 1.6 tons or heavier,as well as EVs of 2 tons or heavier,will be charged a higher rate of 18($19)an hour

207、 to discourage“bulky,pollut-ing”vehicle use.Paris is the first city to implement this type of SUV fee,though similar policies exist in some boroughs of 18|London where parking is based on cars tax bands determined by estimated CO2 emissions,meaning that bigger,older,and more polluting car models hav

208、e higher parking costs(White 2024).While electric vehicles are charged significantly less than hybrid,gas,or diesel vehicles,those with larger battery sizes must pay higher fees.Indirect-benefit mechanismsIndirect-benefit fees and taxes seek to raise revenue using more systemic-level connections tha

209、n direct-benefit programs.They are based on the indirect impact of various modes of transporta-tion on broader markets and activities.For example,transport affects real estate values while supporting access to employment,health care,education,goods,and entertainment.Indirect-bene-fit programs look t

210、o these embedded impacts to raise revenue.Land value captureHarnessing the value of land around public transport can provide significant revenue for public transport authorities.In essence,landowners are charged for increases in the value of their land due to proximity to transit,a potential uptick

211、in business traffic,reduced transport cost,and improved efficiency due to better accessibility.Capturing this added value in the form of taxes can be done in several ways,including a land value tax,which taxes only the land;tax-increment financing,which taxes increases in property values to finance

212、transit improvement projects;and special assessment districts,which charge property owners who benefit from proximity to transit service(Ardila-Gomez and Ortegon-Sanchez 2016).Governments may also grant ownership of the land around public transport or use land Table 4|Annual on-street parking revenu

213、e in select citiesCITYON-STREET PARKING ANNUAL REVENUE(INCLUDING FEES AND FINES)YEARSURPLUS REVENUE(%OF TOTAL)WHERE IS SURPLUS REVENUE DIRECTED?So Paulo,Brazil$17 million 2019$10.6 million(62%)Data not availableSan Francisco,CA$79.7 millionNot available$47 million(59%)Subsidies for public transporta

214、tion(municipal railway)Guadalajara,Mexico$1.03 millionNot available$577,000(56%)Communications campaign to educate the public about the system;public space improvements(reinvestment program yet to be established)Mexico City,Mexico$6.4 million 2018Data not available30%allocated to mobility and urban

215、infrastructure projects in parking districtsFortaleza,BrazilData not availableNot available$652,908100%of surplus revenue allocated to the citys bikeshare program and maintenance and expansion of bike lanesSource:Yanocha et al.2021.around existing and new corridors to create compact housing,a commer

216、cial development,or a joint development where part of the proceeds is used to fund transit operations.The Bengaluru Metro in southern India is an example of where authorities are considering land value capture(LVC)by combining a metro corridor with transit-oriented development in which metro station

217、s are surrounded by compact neighbor-hoods(Dhindaw et al.2021).The city is home to over 10.5 million residents and faces a severe traffic problem,but the cost of expanding metro rail to growing areas of the city is high.The city has turned to LVC to help fund capital expenditures and operational cos

218、ts(ADB 2022).It hopes to generate additional revenue from higher taxes and fees and direct them to fund the metro system and other community-improvement projects.Employer payroll taxesIn some cases,cities or countries have established taxes on employers payrolls to fund public transport operations.F

219、or example,Frances versement transport,introduced in the 1970s and recently renamed versement mobilit(VM)to include active mobility improvements,requires public-and private-sector employers to pay a tax that helps fund transport for local governments(Box 2)(LFC 2020).This type of tax captures the in

220、direct benefits to companies,which save on parking space and benefit from better access to the nearly 63 percent of Parisian households that do not own a car(Chaon 2019).WORKING PAPER|December 2024|19A fare look:Funding urban public transport operationsBox 2|Employer payroll and subsidies for public

221、 transitThe French versement mobilit(VM),or“mobility payment,”is mandated for all French companies with 11 or more employees in any metropolitan area or commune with over 10,000 residents to help fund public transportation for the local government.a The VM amount is calculated by applying a ratefrom

222、 0.55 percent to 1.75 percent,depending on the size of the municipalityto the total remuneration paid out to employees.Originating in Paris in the 1970s,the VM expanded to other French municipalities and is used to subsidize fares,modernize the network,and invest in alternative modes of transportati

223、on,including active mobility.b Currently,it contributes to funding the Grand Paris Express,Europes largest urban transporta-tion expansion project,which will improve the Paris Metro with four new lines and extensions to create a new connected ring around the Paris Metropolitan Area.c The VM now acco

224、unts for an average of 47 percent of French transport authorities total revenue.d The French case is unique because it taxes companies to fund public transit in a similar way that property tax or sales tax is used.In other words,the VM responds to increasing demand for public transit and the mobilit

225、y needs of the French population based on broad employment levels by capturing value created by making jobs accessible.In other cases of employer subsidies for public transit,employers support the demand side,providing benefits or services to their workers to incen-tivize transit usage.e For example

226、,in Brazil,an older national law requires all formal sector employers to support their employees public transport journeys.If the cost of transport is more than 6 percent of their monthly wages,the amount beyond 6 percent is paid by the employer.f It was implemented due to high inflation in the coun

227、try and was aimed at placing a cap on household transport spending.There are currently discussions on how to further engage employers to help subsidize workers travel to and from the office,especially in the post-COVID context.g In Washington,DC,as of January 2016,employers with 20 or more employees

228、 have been required to provide either employee-paid pre-tax or direct benefits,or directly provide transit for their employees.h Whether on the demand or supply side,cities around the world are recognizing the importance of employers and companies helping to financially support public transit,especi

229、ally in the post-COVID context.Notes:a IFM 2021b.b LFC 2020;ITF 2023.c LFC 2020.d Gontard 2019.e Levinson 2013.f GoB 1985.g Dantas 2022.h GoDC 2016.Dedicated sales taxA common way of funding local transportation projects in the United States,including mass transit,is via local sales taxes dedicated

230、to the transport agencies.This indirect funding mechanism captures a portion of the economic activity that is upheld by the transport system.Typically,this is a low additional percentage applied to the bill of sale of most goods and services within the included jurisdictions.This approach has been p

231、opu-lar as it creates a large,legally dedicated funding stream,but it has some pitfallsparticularly in terms of equity.Sales taxes are known to be regressive by collecting a higher proportion of low-income households total incomes(Hannay and Wachs 2007).Furthermore,to get sales tax measures enacted,

232、agencies and leaders have to appeal to a wide variety of constituents and are incentivized to choose projects and services,like rail,that may have broader appeal to most constituents rather than less noticeable maintenance projects that enhance reliability for current users.Nonetheless,this method h

233、as gained popularity,with California voters approving measures in 24 counties representing 88 per-cent of the states population(Lederman et al.2020).One of the largest such measures,Measure M,was passed by 71 percent of Los Angeles County voters in 2016(LA Metro 2023).Measure M is a no-sunset 0.5 pe

234、rcent sales tax to fund projects to reduce traffic,repair infrastructure,expand transit,retrofit bridges,and subsidize transit fares for targeted groups(LA Metro 2023).Los Angeles County,with nearly 10 million residents,expects to generate$120 billion over 40 years.Since the bill was passed,the coun

235、ty has expanded light rail,heavy rail,and bus rapid transit(BRT),with 5 percent of funds used for rail operations and 20 percent for bus operations improvements.The stability that Measure M has provided Los Angeles County to improve transport can be contrasted with the Washington,DC,region(Pascale 2

236、023).The nations capital is a distinct entity outside of any state,containing only about 10 percent of the regional population,with many workers commuting from nine counties in nearby Maryland and Virginia.With local authorities dispersed across multiple jurisdictions,a dedicated sales tax becomes p

237、olitically complex to enact as each state and county served would need to pass separate legislation to con-tribute to the metros annual maintenance.Further,the regional transit provider,WMATA,has struggled to regain ridership to pre-pandemic levels,leading to fares falling short of targets,and faces

238、 an operating deficit as soon as federal relief funding runs out(Figure 6).20|Figure 6|WMATA alone,out of major transportation authorities in the United States,lacks dedicated operating fundingCrisis avertedFY25 Crisis likely avertedWMATANY MTABARTCTALA MetroMBTANJ TransitSEPTADedicated sources0%37%

239、35%57%80%59%26%44%State/Local subsidies53%6%3%1%14%7%4%10%Note:FY25=fiscal year 2025;WMATA=Washington Metropolitan Area Transit Authority;NY MTA=New York Metropolitan Transportation Authority;BART=Bay Area Rapid Transit;CTA=Chicago Transit Authority;LA Metro=Los Angeles County Metropolitan Transport

240、ation Authority;MBTA=Massachusetts Bay Transportation Authority;NJ Transit=New Jersey Transit Corporation;SEPTA=Southeastern Pennsylvania Transportation Authority.Source:Pascale 2023.Because of distributed local power leading to a lack of dedicated taxes,WMATA routinely has to seek funding from the

241、area that it serves.While its peers mostly have local/state subsidy rates below 10 percent,WMATAs is over 50 percent(Pascale 2023).Without improved funding,WMATA has projected that it will be forced to make metro riders pay higher fares for less service,including closing rail stations and cutting bu

242、s services by 33 percent(Murillo 2023).Overall,it would be beneficial for transit agencies like WMATA to have a substantive dedicated tax for transit operating funds at either the state or federal level so that it can plan for strong operations.General-benefit mechanismsGeneral-benefit-related taxes

243、 and fees are even broader than indirect sources.They can come out of functionally unrelated general funds or financial instruments that can be used for a variety of purposes.Further,they tend to be“undedicated,”meaning that the allocation is not guaranteed in future years.National or state grants A

244、long with the economic stresses associated with the global pandemic,European countries were severely affected by Rus-sias invasion of Ukraine and the ongoing conflict,which spiked fuel prices.Germany introduced the“9-Euro Ticket”(9 per month for 90 days)for unlimited transit anywhere in the country(

245、except on intercity high-speed services)between June and August 2022 to alleviate the price burden of traveling and incentivize passengers to return to public transport(Burroughs 2022a).While regular season tickets were predominantly pur-chased by students and young professionals,the 9($9.50)ticket

246、was purchased by a wide range of people reflecting the average population in terms of age,education,and gender(although those living in larger cities were more likely to use them).The federal government covered the ticket costs through 2.5 billion($2.53 billion)in subsidies to state and municipal tr

247、ansport companies(Glucroft 2022).This short-term program proved the value of the pass,as 20 percent of those who purchased the pass were new users,leading to the introduction of a similar 49($51.50)monthly ticket that achieves many of the benefits with less government support(Wolff 2022;Burroughs 20

248、22b).When it comes to passenger safety,it is important to acknowl-edge that public transit riders most often start and end as pedestrians.In Mexico City and its surrounding region,50 percent of all trips rely on public transport,but pedestrian safety and well-being have not always been prioritized.I

249、n October 2020,Mexicos Chamber of Deputies made a landmark decision to approve a General Law on Mobility and Road Safety,recog-nizing access to mobility as a fundamental right(WRI Mxico 2021).The law also enables more equitable distribution of funds for mobility projects,including operational subsid

250、ies for public transport.Metrobs,Mexico Citys BRT provider,earns 53 percent of its revenue from fares and 46 percent from subsidies.The presence of a stable funding source is crucial for the smooth,continuous operation of the transit network,ensuring that there are no compromises in quality,wages,or

251、 services.This stability makes the system a reliable mode of transport for riders and allows for resiliency in the face of unexpected obstacles like a global pandemic.WORKING PAPER|December 2024|21A fare look:Funding urban public transport operationsLOOKING AHEAD AND CONCLUSIONPassenger fares are of

252、ten unable to cover operational costs on their own and do not capture the value of the positive benefits that transit creates elsewhere.Sufficient revenue is needed to cover the growing operational costs that agencies contend with.For example,many existing agencies face rising pension costs,while ag

253、encies in low-and middle-income countries may be burdened with rising labor costs due to the formalization of transit systems(Rodriguez-Valencia et al.2023).The importance of financing and funding public transit from a sustainable set of sources cannot be overstated.Transit offers a large number of

254、benefits to the communities it serves that go beyond the utility of any single rider.Transport infrastructure is essential,and the benefits of transit extend concretely to other segments of society,such as employment,public health,property development,equi-table access to goods and services,clean ai

255、r,and climate change mitigation.However,fully achieving those benefits requires a robust,resilient,broadly accessible transit systemwhich requires stable funding to implement and run.This paper has demonstrated that fares rarely cover full operat-ing costs(let alone capital costs),nor should they si

256、nce the societal benefits reach far beyond individual riders.Transit usually requires a variety of funding sources to achieve the financial predictability,stability,and resiliency that allow for better operations,planning,service quality,and equity for rid-ers(Table 5).This mix includes funding from

257、 the three broad sources identified in this paper:direct funding from revenue of the overall transport system,indirect funding from dedicated sources linked to economic activities that benefit from transit,and general funding support to fill remaining gaps from sources not related to transit.Providi

258、ng adequate funding is especially important as transit systems continue to rebuild ridership since the pandemic while adapting to new mobility patterns,and as cities set more ambitious carbon-reduction targets.Establishing long-term dedicated funding sources for public transport systems is para-moun

259、t for ensuring the financial sustainability of these systems.While nearly all funding takes some political will,direct funding from revenue within the broader transport ecosystem is often Table 5|Summary of funding sources discussedTYPEDIRECT SOURCESINDIRECT SOURCESGENERAL SOURCESTransport user pays

260、Dedicated taxesNational/State/Local budgetsExamples presented Fares Parking,curb,a and vehicle fees Congestion charging For-hire-vehicle fees Sales taxes Land value capture Employment taxes Climate taxes COVID relief funds Grant fundingPros Direct connection among activity,revenue,and funding need E

261、asiest to make a dedicated source Can more easily be used to influence behavior Usually less controversial,as it is often payment for services Creates a link to other beneficiaries where revenue cannot otherwise be captured Often the largest source of funding could be legislatively dedicated Can inf

262、luence generational choices over infrastructure Nearly always an option to pursue for budget gaps Can have a variety of uses Potentially a very large source of funding Can be used to augment equity programs where enough revenue may not be raised elsewhereCons Usually does not cover full costs Can ex

263、acerbate equity issues without proper checks Leaves systems most vulnerable to financial and employment downturns Requires sophisticated policy regimes Susceptible to political power dynamics Many competing needs can mean low stability as a source Can lead to a dissociation between costs and revenue

264、Note:a Curb space,whether used by parked vehicles,delivery trucks,a bus shelter,outdoor seating for restaurants,or other uses,can be leveraged by municipal governments by leasing it to the highest bidder(Beyer 2020).Source:Authors.22|the easiest for governments or policymakers to justify.Indirect fu

265、nding can take a high degree of coordinated political will and foresight,but it can be a large and stable funding source by collecting on broader benefits that are enabled by a well-func-tioning transport system.Finally,general funds complete the picture by filling in gaps that match current politic

266、al priorities and/or meet the objectives of other programs.For instance,there may be a need for targeted subsidy policies for low-income and transport-disadvantaged groups,which can align with other economic,health,and social goals(Venter et al.2019).The post-pandemic period presents a chance for ag

267、encies to reassess their foundational assumptions.Ridership levels,trip patterns,and travel demand are evolving as new preferences emerge.Combined with the ongoing need to reduce emis-sions from private vehicle use,it is crucial that public transport systems not only receive adequate financial suppo

268、rt but also be enhanced to meet these changing needs.Future research would benefit from developing a standardized process for reporting and collecting financial data from agencies across countries.This approach could enable a more thorough quantitative analysis of factors such as operating and capit

269、al cost differences,the impact of varying levels of transit supply,and the effects of different financial support levels.Such insights are important because along with supportive land use,public transit systems play a key role in reducing emissions,enhancing connectivity,ensuring equitable access to

270、 opportunities,and increasing urban resilience.By understanding how to integrate these positive externalities into public transit investment strategies,we can create a stable and sustainable cycle of support leading to greater benefits.WORKING PAPER|December 2024|23A fare look:Funding urban public t

271、ransport operationsAPPENDIX AInterviews were conducted between July 24 and August 21,2023,via online video meetings.General interview questions covered the following topics:Funding and financing Operational revenue broken down by transport mode(e.g.,BRT,buses,metro)How cities cover operating costs(e

272、.g.,farebox revenue,earmarked funds,congestion charging,low emission zones)Operational expenses,if available,to calculate the farebox recovery ratio Ridership Annual ridership pre-and post-COVID to assess recovery Behavior change Changes in public transport usage post-COVID,particularly by gender(if

273、 available)Impact of work-from-home policies on travel behavior Whether traditional morning and evening peak travel times still existTable A-1|Fare information for selected cities in the Latin American and Caribbean region(202223)COUNTRYCITIESAVERAGE PASSENGERS PER DAYTICKET PRICE(US$)NOTEArgentinaB

274、uenos Aires1,000,000(for the 32 routes)and 3,000,000(for the 135 routes)$0.23Average value;price varies based on number of kilometersRosario420,000$0.53San Juan266,666$0.10$0.20Price differentiated by zoneBrazilCampinas450,000$1.08Curitiba800,000900,000$1.20$1.30Niteri302,116$0.85Rio de Janeiro2,200

275、,000$0.85So Paulo7,100,000$0.85ChileAntofagasta250,000$0.80$0.90Santiago1,289,361$0.82ValparaisoNo data available$0.28$0.80Price varies based on distance travelledColombiaBarranquilla80,000$0.60 Bogot133,333$0.67(area service);$0.72(trunk routes)Price varies depending on area service or trunk routeM

276、anizalesNo data available$0.60(with standing room);$0.65(without standing room)Valledupar18,000(with 9 routes);30,000(expected with 12 routes)$0.40$0.50Costa RicaSan Jos480,000$0.50$1.25 Price varies by routeEcuadorCuenca210,000$0.30Ridership information based on full capacity;reduced capacity rider

277、ship is 55,00024|COUNTRYCITIESAVERAGE PASSENGERS PER DAYTICKET PRICE(US$)NOTEEcuador(cont.)Quito4,000,000$0.45 for electric vehicles,$0.35 for ICE vehiclesFlat rate for the plateau(stated in the previous column);distance-based fare for rural areas(price not specified)GuatemalaGuatemala City315,000$0

278、.13MexicoCuernavaca Metropolitan AreaNo data available$0.55$0.60Price based on routeGuadalajara Metropolitan Area3,100,000$0.56 Ridership information includes BRT,train,and busesLen600,000$1.05 Mrida Metropolitan Area428,119$0.42(nonintegrated system);$0.63(integrated system,Va-y-Ven)Mexico City1,80

279、0,000$0.35PanamaPanama City465,000$0.25(mainline);$0.75(express)SalvadorSan SalvadorNo data available$0.25(regular service);$0.34(exclusive service)Note:ICE=internal combustion engine;BRT=bus rapid transit.Source:C40 Cities 2023.Table A-1|Fare information for selected cities in the Latin American an

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