Defenders of public transportation don’t seem to have noticed that Uber and Lyft are transporting the public. Randal O’Toole writes:
An article in the New York Times joins others in asking us to sympathize with the beleaguered transit industry, whose ridership has dropped every year since Uber and Lyft arrived on the scene. The article notes that Uber and Lyft subsidized the 5.6 billion rides they carried last year to the tune of $2.7 billion, or almost 50 cents a ride.
“The risks of [transit] privatization are grave,” the Times article warns. Uber and Lyft are taking “a privileged subset of passengers away from public transit systems” which “undermines support for public transportation.”
What the article doesn’t say is that, in order to carry 9.6 billion riders last year, public transit demanded more than $50 billion in subsidies from taxpayers, or more than $5 per ride. In other words, transit subsidies per rider are more than ten times greater than Uber and Lyft subsidies.
I shouldn’t have to say this, but there is also a crucial difference between ride-hailing subsidies and transit subsidies: the money Uber and Lyft are spending is voluntarily given to them by investors who hope to eventually make a profit. Tax subsidies are taken involuntarily from taxpayers to support systems that, as long as they are publicly owned, will never come close to making a profit.
Instead of bemoaning the loss of transit riders to ride-hailing services, we should be celebrating the fact that a fast, convenient, and affordable service is taking away the need to subsidize slow, inconvenient, and expensive transit systems. It’s worth adding that Uber and Lyft might not be losing $2.7 billion a year if they didn’t have to compete with a transit industry that gets $50 billion in annual subsidies.
[Randal O’Toole, “Celebrate, Don’t Mourn, the Decline of Public Transit,” Cato Institute, June 4]
