They do. But their income includes revenue from taxation. Suppose you own a London business. You pay taxes to the local government. In London, these taxes include money for TfL. After all, you chose to put the business in London, a city with a large public transport network, if you didn't like that you could have put your business in, say, Slough, and avoided this cost.
Passenger revenue is TfL's largest source of income by some distance, but it's nowhere close to enough to pay for the entire network, let alone the necessary capital investments to grow and change with the city. And of course if prices went up, ridership would fall, and transport would be diverted to the over-stretched and polluting private transport options which they city does not want.
You can see how they’re funded on their website[0]. I don’t think the city has the power to tax locally in the way LA might and funding London public transport out of general tax money would never go down well politically.
You mention Oyster cards so I'll assume you're talking about London in which case the operator (TfL) clearly states that "Fares are the single largest source of our income (projected to be 47% in 2019/20)". [0]
This income more than covers the operational costs, with the difference being used to support new infrastructure projects and upgrades such as the Elizabeth Line (as well as concessions for students, the elderly, etc).
Clearly there is a very strong argument for charging.
TfL is funded from fares, the congestion charge, business rates and grants from the Greater London Authority — which itself is funded by the national government and some council tax.
IIRC very few public transport systems make a profit on running costs - never mind capital costs. The rest operate as money pits.
Useful systems have huge positive externalities that can't be captured by charging passengers at a rate that reflects those benefits (I'm not sure if this is due to a free-loader effect, irrationality on the passengers part or something else).
I think the only systems that have profited on scale commensurate with their benefits are those that were a real estate play, eg.: the Metropolitan Line[1] in London, Los Angeles trams, Hong Kong subways. I might be wrong about these examples, either due to misremembering or to falling to a just-so story.
Edit 2: The point, I think, is that if you rely on direct profits for the transport system you give up on huge benefits and accept huge costs across society.
Not sure if this is satire, but most places lose money on public transit (at least, the ticket fares don't cover operating and capital costs). A few places make money off public transit, such as Hong Kong's MTR, because they own the land around the stations and build shopping malls on the land and profit from the rent.
Of course, there are less immediately tangible financial benefits of having public transit, such as improving a city's economy through moving labour efficiently compared to, say, roads.
If I remember correctly, the reason they're not profitable is that their budget is regularly requisitioned to pay for political boondoggles not really related to the metro service at all.
It's not that public transport is a bad idea, it's that assholes will be assholes, and the public purse is annoyingly easy to spend on obvious bullshit and political bacon. I wonder if there's a way to structure these things so they're more resistant to these shenanigans.
Nope. Gasoline taxes pay for roads. Vehicle registration taxes pay for even more services from the government. Income taxes on earnings pays for some things as well.
However city buses are tax subsidized. Why not boost the fare to actually cover the costs? Cities buses are driving on subsidized roads -- their fuel, vehicles, maintenance and marketing is tax subsidized. They even have special lanes built just for them -- paid for involuntary by people who are opposed to such things. Uber is paid for entirely by those that chose to pay for it, which is how it should be.
Why should I pay for city buses I won't ride? Why shouldn't the people riding the bus pay for it?
Not always true. TfL in London was (before COVID) famously unsubsidised, recovering its entire costs from ticket sales and adverts.
So the idea that you have to subsidise public transport is crap, the oldest, and one of the largest public transport systems in the worlds managed just fine without a subsidy for over half a decade, and is only struggling because government policy basically banned the use of public transport for a year.
I see no real reason why public transport must be necessarily profitable. It's a common good that tax payers enjoy. You'll have profitable legs, but you'll also have legs that are used by a few folks from a village who need to get to the city once a week, and those will never be profitable. A private company would probably not build there.
The problem with urban transport systems is that no one sees them for what they really are... an expensive thing that drives the economy. There seems to be an obsession in the west with making public transport pay for itself, but the reality is that a few billion invested in better public transport results in a lot more billions being made elsewhere.
We need to get away from this idea that public transport systems need to break even or turn a profit. They are there to help make money in other ways. An efficient reliable transport system should cost the taxpayer money, but they will get that back in profit elsewhere through a thriving local economy.
I don't get why so many people and politicians speak about profitability as if it was an optional system for a modern city to have.
Yes, the income via transportation fees are usually similar to operating expenses, but like it's the case with roads, no one should expect for it to cover the full cost of building the infraestructure, much like roads.
The tube is not a part of a closed system and delivers thousands of other societal and economic benefits that are not reflected in the fees paid by their direct users.
Also, this infraestructure can last for more than one century, as I understand is the case of London's tube.
Yeah, everyone also ignores that public transport can be supported through taxes and operated at a loss.
In the US, we have a weird obsession with all public goods/services paying for themselves. We should ditch that, operate at a loss, and pull the difference out of progressive taxes.
There's no reason your CEO or office shouldn't foot part of the bill to transport you into work.
Heck, were I king I'd fund public transport 100% from taxes and do away with ticketing. Imagine how much less money we'd pay on road maintenance, police doing traffic duty, running ticket stands/etc. Not to mention the air quality improvements and environmental impacts.
It usually does. Actually I am not familiar with one example where public rail actually makes a profit, in real terms. All public rail systems I know or have read about are subsidized by the state either directly or via subsidizing the fare for the traveler (or both).
Passenger revenue is TfL's largest source of income by some distance, but it's nowhere close to enough to pay for the entire network, let alone the necessary capital investments to grow and change with the city. And of course if prices went up, ridership would fall, and transport would be diverted to the over-stretched and polluting private transport options which they city does not want.
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