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Build America Transportation Investment Center (BATIC) Institute: An AASHTO Center for Excellence
Build America Transportation Investment Center (BATIC) Institute: An AASHTO Center for Excellence

Funding

Local Funding

Fares

Fares are a user charge for public transit exclusively collected at the local level.

Like tolls for turnpikes, fares are one of the oldest means of collecting revenue for transit services. From mass transit's very beginning with privately operated coaches, omnibuses, and streetcars, transit operators have charged fares to cover the costs of their service.

Today, the majority of the nation's transit systems dedicate fare revenue to covering operating costs. It is extremely rare, however, for a passenger service to be self-supporting. According to the 23rd Edition of the FHWA Conditions & Performance Report (published 2019), farebox receipts from 2004 to 2014 for all transit modes combined was 35.5 percent of operating expenses, and for many smaller transit systems, the proportion is significantly lower. In many cases, fare revenue is now viewed as the means of closing the gap between the costs of a given amount of service and the revenues from governmental support. Additionally, farebox revenues may be used to back bonds issued to finance transit improvements.