Why Public Transit Sucks in America

Video Description

Download the CFO’s Guide to AI and Machine Learning at https://netsuite.com/MODERNMBA Public transit is divisive, but nowhere does it draw more controversy and deliver worse results than in the United States. This is the richest nation on Earth, yet driving is far more common than public transport and ridership here is low relative to any other developed country. In the decades after WW2, the U.S. deliberately reshaped itself into a car-centric nation. The “American Dream” sold families on a big house, a yard, the latest appliances, and your own car in the driveway. Yet cities like New York City, Chicago, Washington DC, San Francisco, and Boston all boast the highest public transit ridership in the country despite this generational prioritization of cars. While public transit has been underinvested through history, it’s not accurate to say that there’s been no investment. U.S. public transit agencies serve fewer riders than their international counterparts, yet cost more money than anywhere else, with annual operating budgets that exceed billions of dollars. But whether it’s the rampant crime and poor hygiene or just basic on-time performance and fare collection, public transit in America ranks amongst the worst in the developed world in nearly every metric. Every year, they set a global record for how much money they lose. Adjust for currency, normalize into percentages, and the answer is the same - no one offers less, spends as much money, and still somehow loses more on public transit than America. Public transit advocates regularly trumpet that public transit is an essential service, not a business, and that measuring profit is useless. They point to valid double standards like how U.S. roads themselves to this day are not fully funded by drivers and their losses are covered by every taxpayer. But guess what? Even the transit systems in Europe and Asia that Americans idolize - the Taipei subway, Tokyo subways, Madrid Metro, or Paris RER - all chase profit. These agencies not only boast the best on-time rates and highest ridership in the world, but also operate like for-profit businesses. They publish annual reports, share progress, outline clear goals, track revenue, and explain their financial performance with the same diligence as a publicly-traded corporation. Contrast that with the U.S., where transit agencies make no attempt to be independent. They burn through billions, ask for more, burn through that, and still cry about being underfunded even as service and rider experience decline. Instead of managing finances, they double down—hiring more people and raising wages year after year, deepening losses. Unless workers in Japan, Taiwan, Spain, Italy, or France are naturally more productive than Americans, there is no justification for higher costs and worse results. Underinvestment can explain delays, but it can’t explain this level of chronic mismanagement and inefficiency. Only in America—where capitalism supposedly rewards efficiency and value—has public transit become this dysfunctional machine that serves only to enrich unions and workers. Fraud, and corruption get a slap on the wrist. Ironically, this doesn’t happen in the EU or Asia. Not even the French with their 35 hour work-weeks, aggressive worker protections, and militant unions engage in this kind of behavior. Corruption has been institutionalized at nearly every major transit agency in the US across decades. This is the real reason why politicians prefer to repave intersections or add lanes to busy highways. Roadwork has predictable costs, a clear scope of work, concrete turnaround, and nets visible, even if temporary, results. In contrast, money given to public transit vanishes into a black hole—only to be met with complaints that it still wasn’t enough. What many Americans fail to understand is public transit requires good governance. With the wrong leaders, broken incentives, complacency, and systematic corruption, more money just leads to more waste. Yet the prevailing attitude nationwide is apathy. In this episode, we dive into transit systems around the world to expose the uniquely rotten economics of American public transit—where unions drain public funds, stifle innovation, and cut backroom deals with politicians to protect their own interests. 🎬 Support Modern MBA: https://buymeacoffee.com/modernmba ☕ Support Modern MBA on Patreon: https://patreon.com/modernmba 🤳🏻 Follow Modern MBA TikTok: https://www.tiktok.com/@modernmba 📸 Follow Modern MBA Instagram: https://www.instagram.com/modern.mba/ 📖 Subscribe to Modern MBA Reddit: https://www.reddit.com/r/modernmba/ 🕊 Follow Modern MBA Twitter: https://x.com/modern_mba