Gaosline prices are up and some people are looking at substitutes for auto use. Some of them are switching to public transit. This morning's WSJ reports that "Riders Swamp Public Transit". That article fails to mention that transit's share of all U.S. passenger miles in 2005 was just 1.5%. If that were ever to double this, we would be back to the 1975 share.
Parry and Small show that public subsidies of operating costs average about 50% -- and most go to bus riders. They argue that these subsidy levels are efficient.
Trouble is that at the margin, transit agencies want to add high-capital-cost rail transit -- and typically in the newer cities with origins and destinations much too dispersed to make these systems cost-effective.