Farebox Recovery Ratio, Selected Transit Systems

Farebox Recovery Ratio, Selected Transit Systems

Source: Adapted from Wikipedia.

Very few public transit systems around the world generate enough revenue from fares to cover operating expenses. This is even more challenging if capital costs, such as infrastructure investments, are considered. The profitability of a transit system is usually measured using the farebox recovery ratio, which is the difference between the revenue collected as user fares and operating expenses. A ratio above 1 underlines that more fares are collected than operating expenses, implying that the transit system is profitable. A ratio under 1 underlines that the transit system has to be subsidized.

Because of their low farebox recovery ratios, most transit systems have a high reliance on government subsidies, even in a transit-friendly environment such as Europe. Asian transit systems usually have a high farebox recovery ratio, mostly because of high urban densities and a greater share of commuting assumed by public transit. North American and European transit systems have lower farebox recovery ratios and have thus highly subsidized transit systems. Transit systems in a highly car-dependent setting usually have ratios below 0.25.