The perverse incentives produced by institutional division

» In Chicago, conflicts between local transit services and the commuter rail network have impinged on peoples’ mobility for decades. The institutional context encourages divides, not cooperation, to the detriment of riders.

All across the developed world,* cities have transitioned their commuter rail networks—services designed for infrequent, relatively long-distance travel at peak hours between suburbs and central cities—into regional rail systems. Regional rail, exemplified by Germany’s S-Bahn and France’s RER systems, encompasses all-day, two-way, frequent service, often with through-running, meaning service from suburb to suburb via downtown. Regional rail is typically also integrated into the metropolitan transit fare system, such that a ride on regional rail costs no different than one on a local bus and train, as long as the origin and destination are the same.

These regional rail services have transformed metropolitan travel in the places where they’ve been implemented because they make show-up-and-go, fast service available to whole regional populations, not just those who live in center cities, where frequent local rail and bus options are available.

Why is it, then, that U.S. transit agencies have failed, practically universally, to adopt such changes? Why is commuter rail service in every U.S. city where it’s offered so infrequent? And why is it typically so much more expensive than other types of transit?

There are a number of reasonable explanations—commuter rail often travels on tracks also used by freight, so it’s difficult to add service; commuter rail journeys are longer, so they cost more to provide; and suburban Americans are less comfortable using transit than their foreign counterparts, so there is less demand for the service.

Yet there are also institutional constraints that have made U.S. regions so incapable of investing in regional rail. These are resolvable problems, but doing so will require a significant political lift.

Even so, if American cities are serious about moving people into transit, reducing transportation-related greenhouse-gas emissions, and providing an alternative to car-dependence at the metropolitan scale, regional rail is a necessary investment. It is the only mechanism available to provide fast, frequent, reliable, and long-distance transportation for large numbers of people. Finding the political will to surmount these institutional constraints and develop regional rail should be a priority in virtually every metropolitan area.

Chicago: A difficult case study

The Chicago metropolitan area would, in theory, make for an ideal place to implement regional rail. Less than a third of the area’s nine million inhabitants live in the central city, but Chicago’s downtown Loop is a massive jobs hub, and much of the region grew out along rail lines, now operated by Metra, the commuter rail service.

For years, advocates in Chicago have pushed for improvements on Metra Electric, a commuter line that runs south from downtown through the city and into the suburbs. They argued that it could provide frequent, all-day service and allow transfers to-and-from Chicago Transit Authority (CTA) local bus and rail routes; the Electric, which once had faregates and frequent all-day service, also had the advantage of operating on tracks not shared with freight trains. These improvements, they suggested, would increase transit use, reduce commute times, and help reinvigorate a low-income community.

The Chicago region, like most metropolitan areas around the U.S., has rapidly lost transit riders over the last decade, and needs a new strategy to build back the use of public transportation.

This year, change finally seemed to be afoot: The state passed a huge gas-tax increase, providing new funding for transportation investments. And Cook County President Toni Preckwinkle announced that she wanted to subsidize Metra to increase service not only on the Electric, but also on the adjacent Rock Island line, and reduce fares to levels equivalent to those on the CTA—just $2.50 a ride in the city.

But this week, Chicago Mayor Lori Lightfoot announced her opposition to the proposal. The fact that Preckwinkle was Lightfoot’s opponent in last February’s mayoral race suggests that personality politics may be partly to blame. Officially, for the new mayor, however, the policy is problematic because it would shift riders from CTA onto Metra, hurting the CTA.

CTA is an independent agency that the mayor of Chicago controls through appointees. Metra is a state agency whose board is largely composed of appointees from Chicago-region counties, including Cook County.

This leaves Cook County’s proposal with an unclear future. It’s not obvious that Metra will be able to assemble the political constituency to move forward without the city’s agreement, since the majority of people who would benefit from the service live and work in the city.

If Mayor Lightfoot’s opposition is successful, the citizens of the city will be worse off. The proposal to improve and cheapen Metra services would boost overall transit ridership, reduce car dependence, increase equity of access, and generally make the Chicago region a better place to live.

So what gives? Much can be explained by the current institutional configuration of transit in the Chicago region, which isn’t so far off from those of transit systems elsewhere in the U.S.

Institutional constraints at play

Let’s consider the current institutional configuration of transit systems in the Chicago region. The CTA, again, is controlled by the mayor, since she can appoint four of its seven board members (the other three are appointed by Illinois’ governor). Of Metra’s 11 board members, five are appointed by suburban county boards, one is appointed by the Cook County president, one is appointed by the mayor of Chicago, and four are appointed by suburban members of the Cook County board.

There is also an organization called the Regional Transportation Authority (RTA), which is supposed to oversee CTA, Metra, and Pace, the suburban bus service, but whose actual power is largely limited to distributing a small share of grant funds and vetoing the other agencies’ budgets, a power it has not engaged in.

CTA and Metra largely receive funding from the same sources: Sales taxes collected throughout the Chicago region and state financial assistance; together, these accounted for 95 percent of public subsidies to the two services in 2019. In other words, generally the same taxpayers are paying for services operated by CTA and Metra (though the transit-related sales tax rate in Cook County and Chicago, 1.25%, is higher than in the rest of the region, 0.5%).

Despite these shared sources of funds and official oversight of both agencies by RTA, CTA and Metra operate as if they were competitors. As an example, the CTA runs express bus services to the South Side, such as the #6, J14, and #26 buses, which serve destinations just adjacent to station stops of the Metra Electric—despite the fact that Metra Electric services are faster and more reliable.

Metra services, meanwhile, are more expensive than their CTA equivalents. One-way travel between the Loop and the South Side of Chicago costs between $4 and $5.50, compared to $2.25 for CTA bus and $2.50 for CTA rail fares. Metra’s fare doesn’t allow for transfers to other parts of the city on CTA services, whereas such transfers cost $0.25 for those using the CTA.

Cook County’s proposal would address some of these deficiencies, making Metra trains more convenient from both a timing and cost perspective.

It is unquestionably true that Mayor Lightfoot is right in suspecting that such changes would move riders out of CTA and onto Metra.

People on much of the South Side of Chicago are currently using CTA services instead of Metra for two reasons. First, they’re cheaper; many people who ride transit are financially constrained, and they make choices that reflect that fact. Second, CTA is more convenient, since its buses and trains operate more frequently.

Making Metra cheaper and more frequent would address those two problems to a significant degree. Allowing people access to regional rail service would improve their lives, allowing them to spend less time in transit and increasing the distance they could travel in a given period of time.

But Mayor Lightfoot has little incentive to encourage people to move from CTA to Metra. Doing so would reduce her political constituency by moving riders from a service she controls to one she does not. It would also put pressure on CTA’s finances by reducing its revenues to some degree.

Moreover, CTA officials are right to believe that relying on Metra to make wholehearted change is a tenuous bet at minimum. For instance, despite a state mandate for Metra to accept the Ventra transit card used by CTA and Pace, the agency still doesn’t accept the card in conventional forms. The suburban control of Metra’s board, meanwhile, means the agency has for decades undermined its urban customers—those living in the city of Chicago—to prioritize service for suburban riders. And even as CTA has slowly but steadily improved—for example, buying up-to-date railcars and buses—Metra remains stuck in the 1970s from a technological perspective. So encouraging a shift to Metra won’t necessarily be all roses.

The result, however, is a continued competition for riders, an absurd situation when both CTA and Metra are relying on the same market of passengers and both are receiving public subsidies from the same tax sources.

This is not an effective strategy for growing transit ridership.

What is the purpose of public transportation?

Setting aside institutional conflicts for a moment, this Chicago case raises questions about what the purpose of public transportation is, and what its goals should be, in a modern city. From my perspective, the answer to this is relatively straightforward: Provide high-quality service that encourages people to stop relying on automobiles to get around, and that ensures that everyone has access to affordable and reliable mobility.

If this is a shared view, then increasing regional ridership should be one of public transportation’s primary goals. But increasing regional ridership does not necessarily mean increasing the ridership of every individual service—it means improving the services as a whole such that the system is more attractive in general.

This isn’t a particularly complicated concept. For example, when a transit agency opens a new rail line, it generally expects people using buses along the same route to move to the new line. And that’s great! When people move from buses to rail on the same route, they’re generally getting faster, more reliable, more comfortable service. There’s nothing wrong with that. And the investment in this improved service will, in turn, bring in more passengers.

The problem with Mayor Lightfoot’s approach is that it acts as if the goal for regional transit should be to increase ridership on the CTA, not on the system as a whole. To pursue this deeply questionably line of logic would be to oppose investing in a new rail line because doing so might result in less ridership on existing buses. On the face of it, the city’s position on improvements for Metra Electric appear to be motivated by agency promotion, not by the region’s best interest of increasing transit ridership.

The result of stopping improved Metra service may be, yes, the maintenance of existing levels of CTA ridership (though they are declining, so something is amiss already). But it certainly will not produce the increase in ridership associated with providing people who need it better access to transit.

As I noted, however, there are institutional and historic reasons why the CTA might be concerned about moving people out of its services and onto Metra.

A course forward for thinking about regional transit

I’m hardly the first person to suggest that a lack of regional integration in transit systems produces pathologies when it comes to the motivations of officials involved in related decision making.

But the Chicago case should remind us that an institutional configuration that separates control of transit agencies in the same metropolitan area to different political actors can produce negative outcomes for the region as a whole. We have yet to resolve this situation related to Metra Electric improvements, but decades of little to no integration between CTA and Metra suggests that the current environment isn’t working.

Simply integrating services does not necessarily solve the problem, however. New York’s MTA, for example, technically oversees the New York City Subway, buses, Metro-North Railroad, and Long Island Rail Road—and yet neither Metro-North nor Long Island Rail Road offer regional rail services, and neither offers free transfers to Subway or bus services, let alone reasonably priced fares in areas where service is overlapping.

Moreover, Chicago’s CTA does have the distinct benefit of being directly answerable to the city’s mayor, which I’m convinced improves political accountability and makes the service better over the long run.

So simply saying that CTA and Metra should be merged into a regional entity will not, by itself, make today’s problems disappear.

Even so, the agencies need to find a way to agree on a new set of ground rules. It should be self-evident that the goal of transit in the Chicago region is to grow overall ridership, not ridership on a particular service—and that might mean sacrifice on one service or another once in a while. Moreover, it should be obvious that the current situation, where customers are treated as if they’re supposed to choose between competing services—despite the fact that both are subsidized by the same tax revenues—is unacceptable.

If Chicago’s transit agencies are able to move toward such a détente, they would be taking a big step forward toward reducing the conflicts native to the current institutional configuration. They would also be moving the region toward a transit service that actually benefits the people of the metropolitan area. Perhaps Chicago could be a model for the rest of the country.

* Frequent, all-day, two-way regional rail services are currently available in Basel, Bilbao, Leipzig, Madrid, Milan, Munich, Paris, and Zurich, among others. They are in development in Brussels, Buenos Aires, Geneva, and Toronto, among others.

Image at top: Metra tracks on Chicago’s South Side, from Flickr user The West End (cc).