Financing the expansion of mass transit services

Since the rise of the automobile, mass transit systems have struggled to recover their costs via the farebox alone. This chapter outlines some of the strategies being employed by operators and governments around the world to cover the gap between the cost of running, maintaining and expanding a transit system, and the revenue earned through fares. It examines the key elements in creating internal efficiencies and then turns to the pros and cons of subsidies, earmarked taxes, forms of value capture, employer and developer charges and more. It also examines the political dimension of various revenue-raising instruments: some are more progressive than others; some are more controversial than others depending on the prevailing political culture; some will spread the burden while others focus it on beneficiaries.