Governmental Pricing and Subsidy Policies Create Transit Inequities

How Do Governmental Pricing and Subsidy Policies Create Transit Inequities?

Inequities result not only from inaccessibilities of urban transportation, from the structure of job and residential locations in the metropolitan region, and from the distance and duration of work-related travel but also from the pricing and subsidy policies of local, state, and federal transportation agencies. Subsidies for highway development, free parking, and commuter rail services create incentives for suburbanization and increased highway travel volumes (Wachs, 1981, 243-51; cited in Yago, 1983). In public transit, flat-rate pricing policies force short-distance, off-peak users to pay disproportionately high fares, offsetting losses incurred by the system in serving long-haul, peak-hour travelers. Those supporting transit operating deficits through sales, property, and income taxes are also negatively affected by fare and subsidy policies. A recent study of pricing inequities discovered current fare practices have a regressive redistributive effect especially among minorities, women, and those without cars (Cervero, et al, 1980; cited in Yago, 1983).