Over the past four decades, American cities have spent close to $100 billion constructing rail transit systems, and many billions more operating those systems. The agencies that spend taxpayer dollars building these lines almost invariably call them successful even when they go an average of 40 percent over budget and, in many cases, carry an insignificant number of riders. The people who rarely or never ride these lines but still have to pay for them should ask, “How do you define success?”

This Policy Analysis uses the latest government data on scores of rail transit systems to evaluate the systems’ value and usefulness to the public using six different tests:

  • Profitability: Do rail fares cover operating costs?
  • Ridership: Do new rail lines significantly increase transit ridership?
  • Cost-Effectiveness: Are new rail lines less expensive to operate than buses providing service at similar frequencies and speeds?
  • The “Cable Car” Test: Do rail lines perform as well as or better than cable cars, the oldest and most expensive form of mechanized land-based transportation?
  • The Economic Development Test: Do new rail lines truly stimulate economic development?
  • The Transportation Network Test: Do rail lines add to or place stresses upon existing transportation networks?

No system passes all of these tests, and in fact few of them pass any of the tests at all.