Examining claims made by “Yes Wichita” provides an opportunity to learn about the finances of the Wichita bus transit system.
In November Wichita voters will vote yes or no on a one cent per dollar sales tax. Part of that tax, ten percent, would go to the Wichita Transit system to pay back loans, cover operating deficits, and allow for some service expansion.
Coalition for a Better Wichita, a group that opposes the sales tax, has mentioned that instead of expanding the existing Wichita Transit system, we ought to take a look at private sector alternatives for providing transportation options for Wichitans. An example is the Uber service, which started operations in Wichita last month. (Uber’s arrival is not without controversy. It appears that Uber is not compatible with Wichita’s regulations. I expect that soon the city will clamp down on Uber, which would be a mistake for the city. See Arrival of Uber a pivotal moment for Wichita.)
Regarding Uber, a Facebook user named Michael Ramsey wrote this on his Facebook profile:
Commuting to work every day from the College Hill area costs $1.90 each way and instead of using ONE PENNY from every ten dollars that we spend jumpstarting our transit system the Coalition for Better Wichita has suggested that we use Über instead. HOW DOES THAT SIMPLE MATH WORK??? VoteYes Wichita.
The “Yes Wichita” group that supports the sales tax shared Ramsey’s remarks and added this comment:
Michael Ramsey makes a great point. The simple math shows for Micahel to use public tansit to get to and from work it would cost $998.40 a year, to ride Uber it would cost $3,640 (using the low range estimate). The would cost riders an additional $2,641.60 a year. Simple reasoning shows a one-cent sales tax would be more economical for those in need. #voteyeswichita #yeswichita
Since Wichita voters are urged to consider and use “simple math” and “simple reasoning,” let’s do just that. It will help voters understand some of the finances of public transit.
First, far from “jumpstarting” our transit system, one use of sales tax funds would be to repay $1.2 million in loans the transit system owes to the city. But let’s not quibble about the enthusiasm of those who want to spend more of other people’s money.
The important consideration that needs examination is the idea that a bus ride costs $1.90. (The actual adult fare, according to the Wichita Transit website, is $1.75 or $2.00 with transfer, so I’m not sure where the $1.90 figure comes from.)
Statistics from the Wichita Transit System reveal that the fare that passengers pay is nowhere near the cost of providing the bus ride. I happen to have handy financial figures from 2011 for the Wichita transit system. For that year, total operating funds spent were $13,914,580. Revenue from fares was $1,876,991. This means that considering operating expenses only, 13.5 percent of the cost of a bus trip was paid by the passenger’s fare.
If we include capital expenses of $1,570,175, the portion of the cost of a bus trip that was paid by the passenger’s fare is 12.1 percent. Figures in this neighborhood are common for transit systems in other cities.
So far from costing $1.90 (assuming the author’s data), a bus trip actually costs much more. It’s not bus passengers that pay these costs. It’s taxpayers who pay, most of whom do not use transit.
There are a number of ways to look at the costs of providing bus service. For Wichita in 2011, and considering only the regular bus service and not the more expensive on-demand service, here are cost figures:
Operating expense per passenger mile: $0.97
Operating expense per unlinked passenger trip: $4.79
The 97 cents per mile is not the cost of moving a bus one mile down the road. It’s the cost of moving one passenger one mile. These costs are for operating expenses only and do not include the capital costs of purchasing buses.
Bus transit is very expensive. For the “Yes Wichita” campaign to imply that one-tenth of one cent per dollar sales tax will fix the system ignores the system’s tremendous costs and disrespects the taxpayer subsidy the system already receives.
There’s something else. The Facebook posts seem to imply that someone proposes replacing Wichita bus transit service with Uber. I don’t think that anyone has made that claim. Services like Uber could be a complement to traditional transit. There could be other market-based complementary services.
It’s important to remember that services like Uber generate revenue from people who willingly use and pay for its service. This is very different from Wichita Transit. As shown above, the Wichita bus system receives its revenue primarily from taxes. Money collected in the farebox is a small portion of the system’s revenues. Meeting the needs of customers is not an important factor in determining the revenue the system receives.