A variety of factors can affect the demand for public transit services,  including:    Population and demographics. Federal, state, and local investment in transit has grown over the year resulting in the expansion of the nation’s public transit systems. Transit agencies also rely on a variety of  other funding sources to help provide service, including assistance from  state and local entities, and other sources such as passenger fares. By mode, light rail  ridership grew at a faster rate than heavy rail or bus. For  example, heavy rail experienced the greatest discrepancy in ridership and  supply of services from 1998 through 2008 compared with light rail or bus. According to officials at  the transit agencies we contacted, agencies experienced varying degrees  of success in responding to ridership growth from 1998 through 2008. Transit Agencies’ Costs and Revenues Increased from 1998 through 2008, and the Share of Funding Sources Changed

While providing additional service, transit agency costs, including  operating and capital expenses, increased from 1998 through 2008, as did  transit agency revenues. However, while revenues increased overall, the  share of funding sources changed; the share of federal funding remained  steady while increases in state and local funding shares essentially offset  declines in the share of funding from other sources, such as passenger  fares. Agencies Faced Challenges and Responded by Adjusting Service, Making New System Investments, and Maintaining Their Existing Systems

		Agencies Faced Capacity Constraints and Other Challenges Related to Their Vehicles and Infrastructure

From 1998 through 2008, transit agencies faced challenges when  addressing increased ridership demand. More specifically, agencies faced  capacity constraints related to limitations of their vehicles (e.g., too few  rail cars and buses) and system infrastructure (e.g., platforms that were  too short to accommodate longer trains). For example,  transit officials at the MTA in New York City, New York, said the agency  improved the heavy rail system’s signaling systems in order to sustain  current levels of service and also enable the agency to increase frequency  of service. Representatives of a local  community group and intergovernmental agency added that the agency  turned away riders during periods of high demand and service on many  routes was too infrequent. Agencies’ Increased Costs and Fiscal Uncertainties May Limit Their Ability to Meet Future Increases in Ridership Demand

Transit agency officials expressed concern about their agencies’ abilities  to meet future increases in ridership demand for two principal reasons:  increased costs and various fiscal uncertainties. As previously discussed, from 1998 through 2008, while overall transit  revenues (including operating and capital funding) increased, increases in  the share of state and local government funding offset decreases in the  share of other nonfederal funding sources, such as passenger fares. In  addition, while in 1998 the federal government was the largest source of  capital investment in transit, by 2008 this was no longer the case. Options Exist to More Effectively Deliver Federal Surface Transportation Programs and Help Transit Agencies Meet Increased Ridership Demand

We and others have reported on ways to more effectively deliver federal  surface transportation programs that could help transit agencies address  growing ridership demand amid fiscal uncertainties. Therefore, the challenge is to focus the resources that are  available to effectively maximize the impact on transit agencies’ services. We and others have made recommendations to Congress and others about  how to restructure federal programs to better assist transit agencies and  the federal government in focusing scarce resources and addressing future  ridership demand, including:  focusing resources on maintaining the nation’s rail and bus systems in a  state of good repair;    streamlining the delivery of federal grant programs and projects; and  incorporating performance accountability into federal programs. In commenting on the draft, DOT generally agreed with the information  presented and provided technical comments, which we incorporated as  appropriate. Appendix I: Objectives, Scope, and Methodology

To address how transit agencies are responding to increased passenger  demand, we reviewed (1) trends in transit ridership and services from 1998  through 2008; (2) challenges, if any, that transit agencies faced during this  period to address increased ridership and actions they took in response;  and (3) factors that might affect future ridership demand and the ability of  transit agencies to meet that demand.
Why GAO Did This Study

Demand for public transportation in the United States reached record highs in 2008 and rose in the decade prior to 2008. Increased demand for public transportation can create opportunities and challenges for communities working to meet demand, improve service, and maintain transit systems, while operating within budgetary constraints. Transit agencies rely on a variety of funding sources, including federal, state, and local entities, and other sources, such as fares. The U.S. Department of Transportation's (DOT) Federal Transit Administration administers federal grant programs transit agencies can use to help meet ridership demand, such as for purchasing buses and modernizing rail systems. As requested, this report addresses (1) trends in transit ridership and services from 1998 through 2008, (2) challenges, if any, transit agencies faced during this period to address increased ridership and actions they took in response, and (3) factors that might affect future ridership demand and the ability of transit agencies to meet that demand. GAO analyzed data from the National Transit Database on transit ridership (i.e., passenger miles traveled), service (i.e., vehicle revenue miles), costs, and revenues; conducted interviews with 15 transit agencies operating heavy rail, light rail, and bus; interviewed federal officials and others; and reviewed prior GAO recommendations. DOT generally agreed with the report and provided technical comments.

What GAO Found

From 1998 through 2008, the most recent year for which complete data are available, transit ridership grew at a faster rate than transit service. Heavy rail experienced the greatest difference between growth in ridership and service compared with light rail or bus--heavy rail ridership outpaced the provision of service by about 18 percentage points during this period. Transit agency costs and revenues also increased overall from 1998 through 2008, but the relative shares of revenue sources changed. The share of federal funding remained steady while increases in state and local funding shares offset declines in the share of funding from other sources, such as passenger fares. In addition, in 1998 the federal government was the largest source of capital investment in transit; by 2008 local government provided the largest share. From 1998 through 2008, transit agencies faced challenges and took actions to address increased ridership demand. Specifically, agencies faced capacity constraints, including limitations of their vehicles (e.g., too few rail cars and buses) and their system infrastructure (e.g., platforms that were too short to accommodate longer trains). Transit agencies took steps to respond to increased demand, including: adjusting their service by modifying routes, fares, and hours of service; making new system investments, such as expanding fleets and extending platforms; and maintaining and updating existing infrastructure and vehicles. For example, New York City transit officials improved the signaling in their heavy rail system to increase frequency of service. Agencies experienced varying degrees of success in responding to increases in demand--some reported accommodating increases in ridership while others' success was limited. For example, a light rail agency reported that its service area did not keep pace with real estate development, and a bus agency turned away riders. Population growth and other factors are likely to increase future ridership demand, but cost increases and fiscal uncertainties could limit transit agencies' ability to meet this demand. Transit agency officials expressed concern about meeting future increases in ridership due to increased costs of expanding transit systems and maintaining aging infrastructure. Also, transit agencies' funding has been strained since 2008, as state and local funding has decreased with the economic downturn. This is significant because transit agencies previously relied on increases in state and local funding shares to offset decreases in other sources. Given this environment, along with fiscal difficulties facing the nation, it will be a challenge to effectively focus limited resources to maximize the positive effect on transit agencies' services. GAO and others have made recommendations to DOT, Congress, and others on options that could more effectively deliver federal surface transportation programs and help transit agencies address growing ridership. These options are under consideration and include: focusing resources on state of good repair, streamlining the delivery of federal grant programs, and incorporating performance accountability measures to maximize the impact of investments.