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WHY POPULARITY DOESN'T ALWAYS PAY

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Public transportation in the United States is finding it does not always pay to be popular. As more Americans leave their automobiles at home and go by bus or rail for local travel, they are straining many transit systems nearly to the breaking point.

Forget the basic economic law of supply and demand. With conventional mass transportation, an increase in riders usually means greater financial losses to be made up by government subsidy. That is because most new ridership comes during the peak commuting hours, forcing transit systems to invest in more employees and equipment which for most of the day runs nearly empty and loses money.

This axiom puts conventional public transit at a crossroads: Should it expand and improve service, as Americans apparently want, and worsen its already shaky financial position? Or should it maintain the status quo, effectively discouraging new passengers?

Taxpayers, urban planners, transit operators, and independent transportation analysts offer various answers. But there is wide agreement that this issue will be the key in determining to what extent public transit grows as a transportation option in the 1980s:

* "Transit in the 1980s has the potential for both boom and bust . . . ," a top federal government transportation official notes.

* "It costs us $1.20 for each new rider we get, and our average fare is 41 cents," says the general manager of one major urban transit system. "Our constituency wants more service, but the more riders we get, the more money we lose. It boils down to a delicate balancing act of never being too far out in front of what the public is willing to pay for."

* "There is a growing perception that the fiscal appetite of public transit is voracious and nearly impossible for elected officials to control," a leading transportation scholar asserts.

* While the strength of support for public transit "at the moment appears quite robust . . . the national mood appears increasingly to be toward the limitation of government expenditures and toward 'balanced budgets,'" a transit analyst at a large research institute warns.

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