Public Transit Fare Revenue and Government Subsidies

Public transit fare revenue generally covers a third of the operating costs of a system, with federal grants covering capital costs. About two-thirds of operating costs are covered by government subsidies. The farebox recovery ratio can vary greatly between different transit systems, with some having recovery rates as low as 10%. Demographic makeup of public transit ridership varies based on geography, economics, and history of a city. Cities where driving is time-consuming and expensive have a higher proportion of middle and high-income riders, while cities where driving is easier and cheaper have more low-income transit passengers. Charging fares is seen as a regressive tax on those who need public transit the most. Removing fares can significantly reduce incidents and disputes on public transit vehicles, leading to a safer and more efficient system.