Boosting Mass Transit through Entrepreneurship

Most of the world’s urban mass transit
systems cannot cover operating costs, let alone capital
expenses, through farebox revenues. On average, 25 percent
of metro operating expenditures are not funded by farebox
income. With limited public subsidies, as well as obstacles
to raising fares and political sensitivities to road user
taxes, metro systems have been increasingly pursuing income
from commercial activities connected with their operations.
Metro systems earn commercial income, such as from
advertising, naming rights, and especially real estate
activities, are making inroads in their operating deficits.
Commercial revenue in some systems is nearing 20 percent of
fare revenue. Although reforms of transit financing
structures remain high on the policy agenda, a review of
ancillary income streams of metro systems around the world
shows that a more entrepreneurial approach to tapping their
commercial potential can help them narrow their funding gap.