Assessing the arguments for urban transit operating subsidies. Paper presented at the 54th Annual Meeting of the Transportation Research Board (TRB), Washington, January 1975.

Operating subsidies to urban transit have been growing rapidly in recent years. Proponents argue that operating subsidies are desirable because (1) they alleviate problems with existing automobile and land use patterns; (2) they create a more egalitarian distribution of income and mobility; and (3) they permit public transport to be priced at its marginal costs. Many of the arguments of subsidy proponents are implausible. Evidence is given that operating subsidies will not generate most of the benefits proponents of subsidies claim.