The man behind the Simpson Curtain

Last week I posted about arguments for free public transit, some of which refer to the "Simpson-Curtain rule." "Politically and practically, for most systems, the easiest way is to raise fares. But soon after, ridership goes down," writes Dave Olsen.

As I wrote last week, things are actually quite different, and a bit more complicated. The rule is actually the Simpson-Curtin, rule, after the Philadelphia planning firm of Simpson and Curtin that came up with it. A 1968 paper by principal John F. Curtin is often cited as providing the basis for the Simpson-Curtin rule, but it is actually concerned with extensions to the rule for various additional factors.

From the 1940s through the 1960s, Simpson and Curtin collected data on transit fares and ridership. After crunching the numbers, they found that when fares were increased, ridership went down. The ratio of the change in ridership to the change in fare is called shrinkage ratio or fare elasticity, and is explained in more detail in this PDF from the VTPI. But briefly, Simpson and Curtin claimed that for every 3% increase in fares, ridership dropped 1%, for a shrinkage ratio of -0.33. The lower the absolute value of the ratio, the less an agency would have to worry about driving riders away with high prices.

So what's wrong with the Simpson-Curtin rule? Well, it represents correlation, but correlation does not imply causation. As I wrote in the previous post, to get causation, we have to come up with an explanation that fits the facts better than any other one. The explanation that Curtin, Olsen and others have made, that raising fares by itself causes reduced ridership, is not the best explanation.

Just a few years after Curtin's paper, in 1973, Michael Kemp published a paper arguing that "transit demand is inelastic with respect to money price." He indicates a number of other factors that affect demand, including level of service ("particularly door-to-door journey time"), trip purpose, distance, transit mode, urban form, and length of measurement period. In particular, since transit riding is a choice, it is dependent on the relative attractiveness of the alternatives. He notes:

One might hypothesize that, given the initial decision to travel, transit riding will be higher when the relative prices of substitute modes are at their highest; and that under such conditions transit fare elasticities will be relatively low. It follows that one would expect ... fare elasticities to be relatively low in very large cities with highly congested central areas, particularly for those modes catering to long-haul commuter traffic.

In other words, people are least likely to abandon the bus when it's hardest to drive ("relative price," here, includes travel time and convenience). The correlation observed by Simpson and Curtin is simply due to a lurking variable that drove down ridership and consequently pushed agencies to raise prices: the massive road-building that went on in the postwar period. Of course people aren't going to stick with their old bus system when the government is building new roads and parking lots for their cars! But if the government doesn't build as many new roads and parking lots, then transit still has a chance.

That brings us back to New Jersey, and what has allowed the bus companies to remain profitable for all these years. Not only do the private Lincoln Tunnel buses have the XBL, but they also have the Port Authority Bus Terminal and a law protecting them from destructive competition from the government.

There are two factors that are even more important. The buses (a) go to Manhattan (b) under the Hudson River. Manhattan is a notoriously unpleasant place to drive a car; despite the best efforts of the New York City DOT up until a year and a half ago, it is and was still incredibly congested. It can take half an hour to go a block, "free" parking is almost always full, and private parking is very expensive.

Still, as you pointed out on Friday, the private bus companies in Brooklyn, Queens failed many years ago, even though they continued on as zombies until recently. What's the difference? I think it's very simple: cordon pricing. You can drive across the East River without paying a toll, but you can't drive across the Hudson for free.

Recently I ran into my boss on the subway here in Queens. He told me that he lives in New Jersey and owns a car, but he takes the bus to the Port Authority and then the subway and another bus to work. He's tried driving in the past, but the tolls were too expensive. Sure that's anecdotal, but it fits with the pattern that Kemp found. If it's too expensive to drive, people will take transit.

During the congestion pricing debate, Aaron Naparstek wrote a post called, It’s the Bus Riders, Stupid. Aaron is actually referring to something different from what I'm talking about (and honestly, I always hated the Clinton quote he's referencing). However, it was - and is - the bus riders: cordon pricing would have eliminated the toll-free option for crossing the East River, and thereby increased ridership on the MTA buses, bringing up revenue. With cordon pricing in place, that revenue would be more stable than the other MTA funding sources, and maybe enough to start paying down the debt.

So there's your magic formula for transit profitability:

1. Give transit its own right-of-way and good terminals
2. Make it hard to use cars
3. Make it expensive to use cars
4. Profit!

More on the profitable Lincoln Tunnel buses

Astute readers will have noticed that I'm interested in free transit, but I'm also interested in profitable transit. Mainly I'm interested in successful transit, and both extremes are promising in different ways. A high farebox recovery ratio indicates a strong demand for the service, and it suggests that whether the operator is public or private, the service will be relatively stable. A well-run free transit system could indicate strong political support for the system, which also suggests that the system will be stable.

With that in mind, let's take another look at those profitable buses that go through the Lincoln Tunnel. You'll find them on the right half of the graph below:

Although most of these services have very high ridership, some are actually low, like Olympia Trails, but make up for it with high fares like the lucrative service to Newark Airport.

Of course this is correlation (0.67, in fact) not causation. To get causation, we have to come up with an explanation that fits the facts better than any other one. So far, this seems to be the best explanation: something about the Lincoln Tunnel created high demand for the buses, which allowed bus operators to run fuller buses and/or charge more per trip, and that leads to profit.

One of the biggest factors is probably the the Exclusive Bus Lane. It gives buses their own queue through the tunnel so that they don't have to wait behind private cars, and that time advantage makes up for the multiple stops they have to make before they get to the XBL. This is, of course, a tremendous indirect subsidy to the bus companies. The State of New Jersey also buys buses for many of the companies, relieving them of this capital cost.

"Fine, Cap'n," you say, "but the Gowanus Expressway and the LIE both have HOV lanes. They're used by express buses that bear a passing resemblance to these New Jersey buses. And those buses in Brooklyn and Queens also got free buses from the government, but they lost money for years until they were finally taken over by the MTA, which continues to operate them at a loss. Why didn't those make a profit?"

Good question! I think there are a few factors. One, as described in this article about the deCamp bus company that serves Montclair, the law creating New Jersey Transit in 1980 contained a clause prohibiting the agency from operating "in destructive competition" with the private bus companies. Several of them have successfully sued NJ Transit on the basis of that law. There can be no public option.

Interestingly, the article also mentions that last year State Senator Beck sponsored a bill that would modify this restriction to add that "Under circumstances where the private entity fails to provide safe, adequate, and reliable public transportation services, it is the responsibility of the State, and instrumentalities thereof, to supplement, compete against, or replace such services."

The second is the Port Authority Bus Terminal. As Alon Levy wrote in the comments last January, "the XBL works only because it feeds directly into a gigantic terminal." Yeah, it's kind of a nasty place, but it's nowhere near as nasty as it was thirty years ago, and it's very good at what it does. It has ramps directly from the Lincoln Tunnel to the terminal, so that many of the buses are in bus-only space from Secaucus all the way to the end. It has an underground entrance to the Eighth Avenue Subway, with a one-block tunnel (that's just as nasty as it was thirty years ago) to the Times Square hub where people can access up to nine subway lines (depending on how you count them), with Grand Central and Penn Station just one stop away. It is very efficient at getting buses out of the tunnel and turned around again, or shuttled off to nearby storage. It's also very good at getting people out of the buses and onto the subways, or vice versa.

I'll get to the most important factor next time.

Tripping over the Simpson Curtain

This blog was recently featured as "Blog of the Week" on the Free Public Transit Blog. I do believe in access for all, meaning that we cannot have equal opportunity until we all have equal access to housing, jobs and shopping, regardless of whether we can afford the favored transportation mode of the moment. However, I don't think we have any collective obligation to make it comfortable. And while I'm very honored to be featured, I'm not by any means convinced that all public transit should be free.

In addition to the fairness and equal opportunity arguments, free public transit advocates argue that there is a cost to fare collection itself, some of which is paid by the transit operator in the form of security, and some by the rider in the form of delays. I feel that most of this cost can be eliminated with a well-run proof-of-payment system, but that's not the main point of this post.

The main argument is that making transit free will entice drivers to shift to transit, which is good for our goals, including combating pollution, resource depletion, carnage and sprawl. One proponent, Vancouver resident Dave Olsen, points to something called "the Simpson-Curtain rule", which specifies that "Revenue for any system drops when ridership dips or when fares are increased." So if revenue goes down when fares are increased, then if fares are zero, revenue must be infinite!

Well, not really, but Olsen claims that free transit will get more and more people to stop driving, until we've all turned our cars into planters and hopped on the bus. To support this, he took a visit to Whidbey Island, Washington and then wrote a summary of the fare-free buses in Hasselt, Belgium (it's not clear whether he actually went there - after all, US Airways is not fare-free). In both places, transit is free, ridership is booming, and everyone is happy. The rest of his series involves mostly local Vancouver politics and arguments for eliminating fares there, and can be found here.

I was intrigued by this story, and as I suspected, things are actually quite different, and a bit more complicated, than Olsen portrays them. Stay tuned for more on that.

Access is more important than mobility

Sometimes transportation planners are confronted with a problem of access where transportation improvements aren't necessarily the best solution. Sometimes I seem to detect a note of frustration, something like "Well, what are you wasting my time for? I'm a transportation planner!" And sometimes they push ahead with the transportation improvements because, well, that's their job.

If I'm not imagining this, then it's, ahem, not such a good idea. Sure, your job is to improve transportation, but if that's not what's needed then you're wasting the customer's time and money.

This is certainly not unheard of outside the planning world: people often pay for clothing and food that are completely unrelated to their needs. But transportation planning is different when it's public money at stake. An ethical planner should simply not knowingly agree to facilitate a massive waste of tax dollars.

At one point I actually owned a car, and I was fairly far from home when it broke down. I was able to get it limping along to the next town and right into the first mechanic on the street. He could have charged me an arm and a leg just to look at the thing. But instead he told me where the nearest auto parts store was, and suggested I buy a bottle of "gas dry" and see if that fixed it. I bought a bottle for $5 and it actually didn't fix it, but I figured that if this mechanic was willing to pass up guaranteed work, he was a pretty honest guy. I brought the car back to him, and he eventually fixed it.

Last week Grist had a well-sourced article (which came to me via Planetizen, via Portland Transport, via Streetsblog.net) that nicely illustrates how improving access without mobility can get people to drive less. And of course by driving less, we reduce pollution and global warming, increase energy efficiency, and all the rest. In this case, when stores are located within walking distance, people walk more, improving their health as well.

Transportation planners should be willing to acknowledge when there's a possible non-transportation solution that's worth considering, especially when they're dealing with taxpayer money. They should then be prepared to say, "You know, you really need a business development planner. That's not my specialty, but let me introduce you to Joe, who's really good at fostering downtown businesses."

Access for all

Last April, I talked about Transportation for All as one of my goals in choosing to advocate one transportation policy or critique another. Jarrett introduced the term mobility, which seems to fit a little better with what I'm aiming for. But now Jarrett comes along with access, which may fit even better.

Jarrett writes, "Mobility is how far you can go in a given time. Access is how many useful or valuable things you can do." They're clearly connected: you can have minimal mobility and minimal access, like the Count of Monte Cristo in the Château d'If, or you can have maximal mobility and maximal access, like Rick Steves. However, mobility and access are not the same thing at all: you can have minimal mobility and maximal access, like Neo in the Matrix, or you can have maximal mobility and minimal access, like Charlie on the MTA.

When we think about the public welfare justifications for transportation subsidies, it is clear that their goal is access, not mobility. As a society founded on equal opportunity, we find it unjust for certain people to be restricted in the jobs they can have, the places they can live, and the stores they can shop at, through no fault of their own. It may be because they cannot drive due to disability, because they cannot afford a car or gas, or because they cannot even afford to ride the bus or train.

That is the main reason we have subsidized transit. The benefits to society in the form of decreased pollution, more efficient use of energy, safer streets and greater social cohesion are often forgotten by those who fund transit.

The only problem I have with the phrase "access for all" is that it's already the name of a long-established Dutch internet provider.

The value of ridership

Back in February, it was all over the news: even with "record numbers of riders," transit agencies were cutting service and raising fares. On Tuesday, Transportation for America released a report giving more details about the service cuts and fare hikes.

Lots of people have been baffled by this, including your Cap'n. We had images of packed buses making their way through cities and money pouring into fareboxes, while guys with green eyeshades still sadly shook their heads: not enough to overcome the declining tax revenues. My first guess was that the agencies simply weren't charging enough. That's a factor, but it's not the main factor.

I finally had a chance to sit down and crunch some numbers from the National Transit Database, and I've figured out that the main factor is that those buses aren't packed. "Record numbers of riders" means that the buses were going by with fourteen people instead of the usual ten.



I took the NTD figures for the 374 bus services "directly offered" (on an individual basis, not under contract to some other entity) for 2007, the latest year we have data for. Some of the systems in the Transportation for America report weren't in there, but I marked all the ones that I could find, 46 of them. On most of the systems identified by T4A as facing service cuts, the average number of passengers was 9.9. The nationwide average number of passengers per bus per revenue mile was 10.8; not too different. The average farebox recovery for the systems facing service cuts was 21%, which is below the nationwide average of 27%.

The Transportation for America authors use some 2008 data; I can't find it on the NTD website. T4A gives some numbers in their report, but some of those are for agencies that run both rail and bus services (maybe ferries too), and that's hard to tease apart. So I figure I'll just do a hypothetical: imagine that the buses were all packed, with forty people on each one. I know that when buses get full, fuel costs and dwell time go up, but for now let's assume that operating expenses stay the same.

With forty people on each bus, farebox recovery goes up to 86% for the services facing cuts, and 94% nationwide. With only twenty people on each bus it still goes up to 43% and 47% respectively, but the systems in Gary and Baton Rouge both make a profit.

So clearly my initial guess was wrong, and the ridership gains were much more modest. It is possible to run a bus without subsidies in any city in the country, if you can get enough people to ride. Of course, that's the big "if"! I'll talk about that in future posts.

If you'd like to play with the data, the spreadsheet is here. Also I'd like to note that some states have no systems facing cuts. For example, no one is stranded in Iowa.

More craziness, this time in Pittsburgh

I've only been to Pittsburgh, but I had a really good time. It definitely fulfills the Tourism Department's slogan, "Pittsburgh: It's Not as Bad as it Used to Be!" Seriously, though, I experienced no noticeable pollution, it was mostly compact and walkable, the trolleys were cool, and it was visually just a fascinating place to explore. They don't need helped much there!

So I don't think the latest weirdness is Pittsburgh-specific. Here it is, anyway: next month Pittsburgh is hosting the G20 summit, which is expected to bring in lots of money from all the delegations and protesters. And plans are still being worked out, but it seems like the city intends to, well, shut itself down for three days.

At first I thought it was some crappy anti-transit security theater stuff, since a number of these restrictions will affect transit: Amtrak trains will pass through the city without stopping, trolleys may not be allowed into the Downtown subway tunnel, and buses may be turned back or not run at all. A modern-day Apocryphal Marie Antoinette might have said, "Can't get to work? Let them drive the Lexus." But this will apparently also affect schools, universities, nonprofits and businesses.

I have to wonder whether the hit to the economy from closing the downtown for three days might be more expensive than the gain from hosting the summit, and apparently I'm not the only one. I think there's a good case to be made for reasonable security to protect diplomats and heads of state, but if you have to go this far, you've clearly got big problems on your hands.

But if the Port Authority of Allegheny County really is channeling Apocryphal Marie Antoinette, they might want to keep in mind what happened to the real one - despite her security arrangements.