A number of other public transportation agencies nationwide are participating in NIW as members of APTA, which is an affiliate member. National Infrastructure Week is the largest, most diverse, non-partisan coalition of organizations dedicated to strengthening America by rebuilding the nation’s infrastructure. This year’s fourth annual National Infrastructure Week brings together America’s business, labor and policy-making leadership, and it includes more than 100 affiliate organizations from all sectors of America’s economy and society.
By: Matt Dickens, APTA Policy Analyst
Most public transportation service in the U.S. is provided by public agencies. Many public agencies contract all or parts of their services to private sector operators, in just one of the ways public transportation industry dollars flow to the private sector. Data from the FTA’s National Transit Database (NTD) lets us take a look at the patterns of what kinds of agencies contract service and how much service is contracted.
We can look at the scope of contracting in the public transit industry in a few ways, but here we will examine the amount of public transportation service, in vehicle revenue hours, that is contracted compared to that which is directly operated. The NTD describes public transit service as either Directly Operated by the agency or Purchased Transportation, i.e., contracted.
The total amount of service that is contracted varies by mode. Nearly three quarters of Demand Response service hours are operated by contract. By contrast, only 17% of fixed-route bus service hours are contracted – many more of these are operated by the agencies themselves. More vanpool service hours are contracted than bus service hours, but the majority are still directly operated.
Another way to compare how much service is contracted or directly operated is to look at how many agencies are using each method. For some modes, we see a very different picture here. The biggest difference is in Demand Response service. While nearly 75% of service is contracted, only 51% of agencies contract any service at all. This difference comes about because the agencies that are contracting service are in general providing more service than those that directly operate service. The opposite is true of bus providers – those agencies that directly operate 100% of service are more likely to be larger agencies.
The chart below shows this relationship. The average agency that provides 100% of their demand response service as directly operated operates only 27,944 annual hours of service, compared to 137,159 hours of service on average for those agencies that contract out 100% of their demand response service. Agencies that directly operate 100% of bus service provide more service hours on average than those agencies that contract 100% of bus service, although the gap between the two is narrower for this mode.
Presumably, this difference comes about because of the strengths that agencies of different sizes have and where those agencies think they will find efficiencies in either contracting service or operating service themselves. Large agencies may find that they gain flexibility by contracting out demand response service to a variety of smaller operators. Smaller agencies may find that they gain experience and expertise if they contract out bus services to an outside company to run the service. Rapid agency growth may also lead an agency to contract some service.
Changes in Contracting Over Time
In general, a larger percentage of demand response, bus, and vanpool service is contracted than was contracted in 2004. For demand response and vanpool, the percentage of service contracted peaked around the recession (2009 for demand response, 2010 for vanpool) but has declined since then. It may be that during the increases in ridership up to the recession, agencies found that they could more flexibly increase service using contracted service.
Demand Response has shown an increase in the portion of agencies that are choosing to directly operate service or operate a mix of directly operated and contracted service. The percentage of agencies choosing to contract all of their demand response service has dropped.
The percentage of bus agencies that are directly operating all of their service has dropped, while the percentage of agencies that are operating a mix of directly operated and contracted service increased. The portion of agencies only contracting service remained about the same.
The percentage of agencies contracting all their vanpool service rose just after the recession, but that percentage has dipped slightly. It’s possible that these services switch between contracts and directly operated service often.
If we compare using the regions used in the APTA SU4T tool we can see some regional differences. A larger percentage of service in the Pacific region is contracted than in any other region. The Northeast, however, saw the largest increase in percentage of service contracted, from around 70% to over 83%. A lower percentage of service is contracted in the Far West region, though that has increased over this 10-year period.
The picture is somewhat flipped when we look at bus service. More bus service in the Far West region is contracted than in any other region. The Pacific region still has a high level of contracted service. Less service is contracted in the northeast and Midwest regions, where agencies are more likely to have been around for many years. It is possible that the agencies in the Pacific and Far West regions are more recently established, and that may be the reason contracted service is more common.
For vanpool service, most of the changes in the percentage of service contracted are due to additions of new vanpool providers to the National Transit Database. More vanpool service – over half – is contracted in the Northeast region. A small percentage of service is contracted in the Midwest region.
All these different arrangements are ways in which public transportation funding flows to the private sector and helps to create jobs beyond those they create in the public sector. These different arrangements of contracted and directly-operated service help each transit agency maximize the value of their public funding.
The policy department would like to thank Cliff Henke, Chair of APTA’s Business Member Government Affairs Committee, for his assistance with this paper.
Last week was the culmination of many years of work led to the passage of a surface transportation bill known as the FAST Act. We appreciate the bi-partisan action of Congress and the President to provide reliable funding for public transportation systems for the next five years. Please take a moment to watch this video thanking them for their action from APTA Board Chair Valarie McCall and APTA President & CEO Michael Melaniphy.
“On behalf of the 1,500 APTA member organizations and the millions of Americans who rely on public transportation, I congratulate the members of the House for their bipartisan vote today in favor of FAST Act,” said American Public Transportation (APTA) Chair Valarie J. McCall and board member of the Greater Cleveland Regional Transit Authority.
Noting that the Senate still needs to vote on FAST Act, APTA President and CEO Michael Melaniphy said, “We are one step closer to having the first multi-year, well-funded surface transportation bill in ten years. This is excellent news for America’s public transportation systems and the communities they serve in small, medium, and large communities.”
McCall and Melaniphy both thank House Speaker Paul Ryan, Minority Leader Nancy Pelosi, Transportation and Infrastructure Committee Chairman Bill Shuster and Ranking Member Peter DeFazio, and Ways and Means Committee Chairman Kevin Brady and Ranking Member Sander Levin for their efforts in moving this legislation forward.
Just over a week ago, Americans across the country came together in cities and towns – big and small, in almost every state to Stand up for Transportation. They called on Congress to continue to invest in public transportation and to provide long-term funding for our transportation infrastructure.
As we continue to advocate for Congress to pass long-term funding, we are very concerned about two proposals in Congress that would eliminate federal funding altogether for public transportation from the Highway Trust Fund. Under both these scenarios, it would be disastrous for local communities and their public transportation systems. The analysis shows that proposals to cut federal funding for public transit would result, on average, in a 43 percent reduction in a community’s capital improvement funding.
Overall, federal transit investments for both capital and operating costs would be lost, putting at risk more than $227 billion in our nation’s economic productivity over 6 years. The loss of federal capital funds would impact the reliability and safety of current bus and train service and put new services in jeopardy. These Congressional proposals are short-sighted because they would put at risk:
- 38,000 buses or 57 percent of the nation’s public transit bus fleet would not be replaced.
- Overall, 66 new public transit projects could be stalled. Many of these projects serve as a catalyst for economic development in every region of the country.
- Rail maintenance, expansion and rail car replacement would be significantly impacted.
Support for our nation’s transportation system is a partnership among local, state, and the federal government. Public transportation makes the transportation system work more effectively and efficiently.
Public transit investment creates jobs and grows our economy. In fact, 73 percent of the funds for public transit creates and supports private sector jobs.
It makes no sense to reduce or eliminate funding as we work to meet the demand of growing public transit ridership which has grown to more than 10.8 billion trips taken in 2014, the highest in 58 years.
APTA has created a new web application that shows the impact of no federal investment by region, state and Congressional district.
The clock is ticking! There are only 44 days before the May 31st deadline. It’s time to stand up NOW for the future of the nation’s transportation infrastructure.
We will continue to rally citizens, our partners and community leaders to reinforce our message that Congress must act NOW to continue to fund public transit through the Highway Trust Fund and to pass a comprehensive, long-term bill so that we can repair, maintain, and expand America’s public transportation, roads, bridges, and rail systems.
Recently I delivered a State of the Industry speech, it covered the past year, our current status, and some thoughts for the future. Today I would like to share some highlights with you.
Demand for public transportation is on the rise. In fact, 10.7 billion trips were taken on public transportation in 2013, the highest in 57 years, according to our most recent statistics.
Even those who drive should take note of these statistics, which show that communities that invest in public transportation stand to gain. APTA figures point to a four-fold economic return on investment for every dollar spent on public transportation.
It truly reinforces a common refrain in our industry, where public transportation goes, businesses thrive, property becomes more attractive, and tax revenues increase.
A substantial and robust public transportation infrastructure is one key innovation that helps to support economic growth in local communities, say experts. With federal funding for public transportation poised to be a critical issue for Congress this year, public transportation advocates are calling for funding legislation that is reliable and sustainable in order to plan, build, maintain and repair these systems.
As we approach the May 31 deadline for a new surface transportation bill, it is critical that our national leaders come together to create legislation that will ensure years of economic growth and opportunity for communities across the country.
Here are several ways such investment in public transportation could affect an individual community:
- If you are a homeowner, public transportation in a community could spell financial security during times of economic uncertainty. Residential property values performed 42 percent better on average during the last recession if they were located near public transportation with high-frequency service, according to a report by the National Association of Realtors and APTA.
- Seventy percent of millennials prefer a city or town that features a multimodal transportation option that includes public transportation. By investing in public transportation infrastructure, a community increases the likelihood of attracting new talent and industry to the area, especially as public transportation systems adopt technologies like smartphone charging stations on vehicles and facilities and fare collection via smartphone.
- Public transportation is a 61 billion dollar a year industry that puts people to work –– 1.1 million jobs are created or sustained annually, directly employing nearly 400,000 people and creating hundreds of thousands of private-sector jobs. As such, public transportation advocates say that by supporting measures that improve these systems, local residents will be doing their community a favor.
No matter how you get around your community, a robust public transit system stands to have a positive impact you and the local economy.
More than 2.7 billion trips were taken on U.S. public transportation in the third quarter of 2014, according to a report released by the American Public Transportation Association (APTA). This is a 1.8 percent increase over the same quarter last year, representing an increase of more than 48 million trips and the highest third quarter ridership since 1974 (the oldest third quarter APTA has available for comparison).
Some of the public transit systems that reported record third quarter ridership for their entire system or specific lines are located in the following cities: Albany, NY; Ann Arbor, MI; Birmingham, AL; Denver, CO; Minneapolis, MN; New York City (Metro North), NY; Oakland, CA; St. Petersburg, FL; Peoria, IL; Seattle,WA; and Wenatchee, WA.
There are a number of reasons why public transportation ridership is on the rise. First, the investment in public transportation by the federal government has paid off with new rail and bus rapid transit lines or extensions that have opened up in recent years. These new services have not only created greater access for people to use public transit, but have led to economic development that has transformed and revitalized the community. Public transportation is not just moving people, but also positively shaping the communities we live in.
A second reason for increased ridership is that people are affirmatively responding to the quality of public transportation that is now available. For example, some public transit systems have increased their frequency of service and have modernized their vehicle fleets. Additionally, with the use of apps and real time information at stations, riders can easily find out when the next bus or train will arrive. Technology has made riding public transportation more convenient and easier to use.
Additionally, the economy is recovering and since nearly 60 percent of public transit trips are taken to travel for work commutes, public transportation ridership has increased in cities where the economy has improved.
The following cities are some examples of areas with higher employment and public transit ridership for the third quarter: Atlanta, GA; Boston, MA; Champaign-Urbana, IL; Columbus, OH; Dallas, TX; Denver, CO; Minneapolis, MN; Portland, OR; Salt Lake City, UT; San Francisco, CA, and Seattle, WA.
High and volatile gas prices have played a part over the past nine years in convincing people to try public transportation. Now that gas prices are declining, many people are still choosing to ride public transportation. They have discovered that there are other benefits to taking public transit besides saving money.
For full national ridership numbers see the ridership report.