BART was already “facing a fiscal cliff” after working from home and driving to work caused revenues to collapse.
By Wolf Richter for WOLF STREET.
One thing that has not recovered to anywhere near pre-pandemic levels is ridership on mass-transit systems. Ridership has crept up from the total collapse in the spring of 2020, but has remained far below pre-pandemic levels. This has been the case also at Bay Area Rapid Transit (BART), a sprawling rail system that connects the East Bay via the Transbay Tube to San Francisco and further south to the San Francisco Airport and the northern part of Silicon Valley.
Ridership on BART has gotten crushed by working from home, for which the Bay Area has become the epicenter, and by people driving instead of taking the BART, as highway traffic was initially a lot less onerous than before the pandemic. But ridership began to recover gradually, from very low levels. Average ridership per month as measured by exits:
- In 2021, 2.05 million per month, -79% from 2019.
- In 2022, 3.45 million per month, -65% from 2019.
But the progress stalled in mid-2022.
In December 2022, the 3.34 million rides were down by 61.8% from December 2019, and there has been zero progress in ridership since June 2022, when ridership was down 61.9% from June 2019. The June drop was still a huge decline, still a collapse in ridership, but it was the smallest collapse, if you will, since the lockdowns, amid hopes of further frustratingly slow recovery.
But then the layoff announcements at tech and social media companies in San Francisco and Silicon Valley started to ricochet around, and progress halted entirely.
This chart shows the change in ridership each month in 2020 through 2022 compared to the same month in 2019, thereby eliminating the issues of the seasonal drops over the holidays in November and December.
This drop in ridership comes as the brand-spanking new trains that had been ordered years ago, have entered service, and they’re nice, but they weren’t free (and the epic “BART screech” in curves persists somehow).
Facing a “fiscal cliff.”
According to BART estimates released in October 2022 (PDF), due to the collapse in operating revenues (from fares), BART will have massive operating losses – $287 million in fiscal 2022; $335 million in fiscal 2023, $316 million in fiscal 2024, etc.), which will deplete the $1.6 billion in pandemic federal assistance it received by fiscal 2026. And then what?
Turns out, a rail system cannot just cut services to get out of trouble because the biggest portion of the expenses is high fixed costs and interest; and only about 36% of BART’s total operating expenses “scale proportionally with service,” according to BART Director Rebecca Saltzman.
But cutting services – reducing the number of trains, cutting weekend services, etc. — “means fewer riders (and less revenue) without proportional savings,” she said, citing a study by BART staff that sought to determine how much service would have to be cut to balance the budgets.
“BART is facing a fiscal cliff. Cutting service won’t balance our budgets – It would make our fiscal situation worse as ridership would drop,” she said, services would have to be cut further, and BART would “enter a death spiral.”
Get people to go back to the office (by BART)?
So BART does not plan to cut service, she said. “We cannot balance budgets by cutting service. We must identify new revenues in the coming years to close big future budget gaps.”
That’s going to be tough if workers keep working from home and don’t go to the office, and if workers that did go to the office by BART are now getting laid off.
There are now all kinds of discussions about what to do with the empty office towers, including converting some of them — where this is economically even feasible — into residential buildings. And if that pans out over the years, it would be another blow to BART because even more people could live near where they work, and wouldn’t have to commute.
Foot-traffic in San Francisco’s Financial District is still very thin, compared to how it used to be, and the ghost-town comparisons are still being made, but it has come up some from the levels in August 2020, which I documented: Haunting Photos of San Francisco’s Desolate Financial District During Morning “Rush Hour”: Visual Effects of Work-from-Home
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Plus I read the following from this summer:
San Francisco has the highest rate of population decline in the country. That stayed true through the first and second quarters of 2022, with a greater rate of outbound moves than anywhere else, plus a lessening number of people interested in moving in.
The pandemic hastened some people’s decisions to relocate. With a wider acceptance of remote work, people have found they can move to areas with lower costs of living and lower crime rates while still carrying out their same jobs. The housing market is another push – the median home price in California is nearly double the national median. Tracking data from United Van Lines, the Chicago Fed found six of the top seven moving patterns revolve around the Golden State.
Opposite?
BART is mostly for people who do NOT live in San Francisco. It only has a few stops in San Francisco. It’s for people to commute TO San Francisco. So if people moved from San Francisco to the East Bay (some did), then this would possibly increase BART revenues when these people are dragged by their hair into the office in San Francisco.
Is that true? I used to live in Santa Clara and Sunnyvale and it seemed that most commuters used Caltrain.
Of course, that was our only choice since the BART didn’t go down that south. But BART seemed to make sense only for the East Bay, where you could cross the bay on BART. But for any points south of SF, CalTrain was faster because it made fewer stops. Not sure what the numbers are, but I’m assuming south bay folks made up more of the commuting population than east bay folks, but I could be wrong.
The rascist county and city governments on the peninsula nixed the BART tracks decades ago. They didn’t want the “riff-raff” from the East Bay communities commuting down to “rob their homes”.
This is why the BART system doesn’t ring the bay, and we’re stuck with the crappy CalTrain from San Jose in the south to Milbrae in the north.
Lune,
Like you said, BART doesn’t go to Santa Clara, Palo Alto, Sunnyvale, San Jose… Caltrain does, and that’s why you see people take Caltrain to get there. Not sure what your point is.
Lots of people use the BART going into SF from both directions. Obviously a lot more from the East Bay since that’s the huge area where the BART lines fan out. On the peninsula, the BART goes only to Millbrae.
San Francisco is NOT a big city, 830,000 pop. right now. Less than 10% of the Bay Area’s entire population. So you can figure out on your own in which direction the commuter flows are bigger.
If you want details, you can download the station-specific data from BART in Spreadsheet format.
Nor does it go to Marin, which doesn’t have the CalTrain just the (commuter) bus lines and Ferries. Interesting fact the Golden Gate Bridge was designed with a sidetube for BART in mind but then Marin nixed it because they didn’t see the need.
I guess I’m just surprised. Living in the south bay I always viewed the BART as something to take once you go into SF :) didn’t realize that people commuting in from the East Bay made up most of its riders.
Interesting – I know of BART retiree in northern AZ
wonder how pensions are doing
BART is in for tough times in the short term. But these will be considered the golden years when you look in the long term. Those WFH workers will be dragged kicking and screaming back to office no doubt about that so traffic volumes will pick up. But we have been promised a recession so a lot of those workers are going to be laid off. BART traffic volumes are going to drop again and they might never recover.
Because here is the thing Covid-19 showed that for certain kinds of businesses and some jobs actual physical presence at work wasn’t necessary and wasn’t detrimental to the smooth and profitable running of said businesses, and WFH was a viable strategy.
And once the promised recession does come to an end companies still operating from San Francisco will be looking to expand but in order to keep a tight rein on costs they might adopt a hybrid/full WFH system.
So even if the economy improves the BART might be screwed.
“Those WFH workers will be dragged kicking and screaming back to office”
This is sounding like; “the beatings will continue until morale improves.”
It reminds me of those annual corporate meetings with HR about the company’s newest health care benefits plans and how they are saving another 10% on costs. (So HR could achieve maximum bonus payouts). Yea!
Would not more people living close to where they work bring more riders to the BART?
I do not know the geography of San Francisco, but more people living and working close to the stations of public transport often increase the use of public transport.
And public transport make it more attractive to have offices and housing along the line. That is what i see elswhere, development of housing, offices and shops happen along the public transit corridors. The shopping centres sit on top of the train/tram/tube stations.
BART is a regional rail system, it’s not used for getting around in SF, it’s used for getting to SF.
I don’t think WFH will last. Groups of people working together are more productive, IMO than over the phone, or by zoom etc. etc. Isolated work misses ideas, personalities and all the rest that comes with teamwork. San Fransisco will recover. Putting in more residential space will help also. Just as it does when groups form in offices, so too do they form in neighborhoods.
Permanent remote won’t last in the numbers it exists now, but hybrid arrangements will, in my opinion.
People going to the office 2-3 days a week versus 5 still has major implications for mass transit systems (as well as many other things in cities, like delis, dry cleaners, etc.)
I could not disagree more with this sentiment. WFH is a permanent trend and it will accelerate for work that can be done remotely. There are modes of work requiring physical presence, like manufacturing and hospitality and some of health care, but large sectors of knowledge work don’t require physical presence and people don’t like to commute. It will never be 2019 again.
As far as what this means for cities, that’s an open question. Urban life is still very attractive for many people and I would bet that cities will be fine from a residential perspective long term. High cost cities probably less so as people work out geographic arbitrage, but cities that are attractive will still be attractive.
But urban office markets in high cost areas are going to be crushed.
Our own business has moved all IT and clerical support staff home. We are a small business but that is a total of 10 people. We are now in a much smaller office space, 2/3 smaller. Everyone involved is delighted to be able to work from home, no exceptions. They do come in once a month or so for training. That’s it. Multiply by a few million and I think you can see what that means for office landlords.
As long as the job gets done, it saves the company money-bottom line. Plus many working for home will be part time. per diem, contractual etc… and the company saves huge money on bennies.
Yep, a more flexible work force and lower overhead should be music to the ears of both companies and employees. The small company I work for has always been fully remote.
Management is loath to give up those corner offices.
In many cases, they have spent their entire careers to get to executive floor.
There is nothing stopping the executives from coming in a sitting in their corner offices, just don’t make others do it. The future of commercial real estate, all corner offices!
Seriously there are some types of work that needs to be in person but for most people in the corporate world WFH is great.
A year from now all tech companies will be where Twitty is now: back to living in your office or don’t bother coming back.
They got it wrong on those Star Trek movies and shows where Star Fleet Headquarters was in a sleek bustling city of the future ( San Fran I think) with people movers taking workers to the office and trim looking folks in futuristic fashions strolling about. In reality, the future looks like it will be slobs in their pajamas lounging in chipboard and gypsum huts out in the Desert, tapping on keyboards and waiting for pizza to be delivered by molded plastic robots.
Why waste the energy on robots, when imported *H-1B aliens can tunnel through whatever confronts them, to complete delivery..
* the ‘H’ standing for Horta, of course. Hold the eggs!
Yea, I think Wall-e without the cool spaceship is closer to the truth.
“High cost cities probably less so as people work out geographic arbitrage, but cities that are attractive will still be attractive.”
Bit of a conundrum: a defining thread in the fabric of any attractive city is the community itself—the people who desire to live there; if such people can’t/won’t afford the cost of living in a city, the city winds up bereft of the fundamentals which made it attractive.
I see this phenomenon in cities like Austin, TX. Waves of the type of people who formerly imbued the city with a homespun vibrancy have either left or been frogmarched to the outermost outskirts & beyond to make way for the out-of-touch moneyed type A goons. Real drag.
bul – sometimes referred to in the past as ‘gentrification’, or, “…the ‘establisment’ subverts the dominant paradigm…”.
(Not only in cities, our rural North Bay area has seen an influx of moneyed Sil Valley WFH folks over the last three years. Like all people, there are some who are sincerely doing the work of integrating respectfully with the existing community, and some who aren’t. Mirroring the times here in the late ’60’s – ’70’s when this ranching/logging country had a large number of ‘trustafarian’ back-to-the-landers arriving, some remaining, many not…).
Five of my seven grandchildren are working from home here in Santa Clara county and they love it.
One of my granddaughters works for a company that had a large office in San Francisco. During the pandemic WFH was so successful they closed the SF office and made WFH permanent.
My wife is Vietnamese and has a niece that recently graduated from Richmond University in Virginia. She is now working for a company in Seattle from her home in Hanoi.
Working from home is here to stay.
Depends on the work being done perp:
Been working remote on and off for decades, usually after working totally in office for some time and savvy bosses determining I was more effective when I closed the door and was left alone, no phone calls etc., many times for hours.
Then came ”bid day” and the team absolutely was needed to handle the tons of phone calls, faxes (HA!) emails, and now tweets confirming, adding, and subtracting from base bids from subs and suppliers.
Lastly, it was all remote as I was working for companies 3,000 and 5,000 miles away, with someone else in the hot seat.
I’ll never be able to WFH in my career, but I would love to be able to do so. After having been to many meetings over the years, I can definitely say people working together isn’t necessarily more productive. If anything, it’s usually the opposite. Just my experience, YMMV.
The meetings don’t stop with WFH they get worse, unless management actively reinforces the idea that they are not needed for every little thing. You can eliminate a day of work (go to 4 work days) with the same or greater productivity if you could just get rid of all the useless meetings.
Anyone looking a bringing in a team for a meeting should examine the costs versus true benefit of such meetings. My team of 8 covered US and Canada, from Montreal to Vancouver and Atlanta to Colorado and several other cities between.
Meetings were prohibitively expensive and eventually eliminated in favor of virtual.
I’ve been in both WFH and office environments and seen the worst/best of both worlds. My first job we moved from cubicles into bullpen-style productivity farms that were designed to improve “collaboration.” Look, chief, this isn’t a Tactical Operations Center (TOC, now called a Command Post…CP) in the military. Nobody needs instant real-time updates from the intel officer, the ops officer, and the supply officer with all of them coordinating to plan a mission. We’re doing data analysis. The work was highly individualized and the exact opposite of collaborative. We all ended up wearing noise cancelling headphones and taking them off when somebody came to ask us a question. There was no point and no privacy and I heard they ended up going to a hybrid policy anyways later.
Next was work from home exclusively. I spent the majority of my day either working or doing absolutely nothing. The project I was assigned to had no more work and we were waiting on X. Very soon, the days spent working out reading books, playing video games, and drinking beer outnumbered the days spent doing meaningful work and I began to develop a sense of existential dread. Sure enough, the company was having trouble getting follow-on projects and was unable to keep its workforce close enough to retrain or utilize. The company folded, and that was that. I enjoyed the 40 minute work week minus the aforementioned existential dread which inevitably proved correct.
At the current company, I have the opportunity to do 100% remote, but I go hybrid where I show up about 3 times a week and work an 8 hour day at the office. It keeps me focused. It keeps my face in my boss’ mind (I always book the office, not common work space with a divider shorter than the top of your computer monitor, next door…the rest of my team shows up less than once a month). I get the vast majority of my work for the week done in these 3 days and company policy is “if your work gets done, I don’t care what you do on your off hours.” So Friday and some other day are usually just dedicated to answering (usually stupid) emails and sitting in a few meetings while enjoying what is mostly a day off. Moderation, as they say. The one thing I regret is that with nobody else in the office, sometimes it takes me half a day to get a straight answer out of somebody on a relatively straightforward question that could have been solved in a 30 second walk and a 2 minute conversation if we were both in the same building.
Could BART be used for delivery services ie. like Amazon? Other trains deliver goods.
Interesting idea! 100 years ago when interurban trains connected every city and town, they always carried freight and mail along with passengers. Some of the railcars were half baggage and half passenger, like this:
its about as reliable as a Saab
This decade is a new paradigm.
The hustle and bustle of the downtown centers will be a rarity. I also believe that America went through population decline in recent years.
We are in a new age. The downtowns will not be the same like before. Public transit and regional rail are not the same like the last decades before.
I was in Vancouver BC a couple times in the last 6 months and couldn’t believe how vibrant and crowded the downtown core was. I live outside Seattle, which is dead downtown now. But to me Vancouver seemed like it always was back in the day. Would love to hear from any locals how they feel.
Vancouver is mostly back to being Vancouver as far as foot traffic goes. However, WFH has affected the core somewhat in that those office workers were also clients for other businesses.. ie. My current barber is now at his 3rd location just outside DT because 2 others were closed down due to less clientele. Few little cafés and things like that closed down as well. Van has always been a bit too small geographically for the amount of people that want to be in it for various reasons so it’s hard to notice, whatever office workers are missing has been replaced with tourists, students, new residents and new business ppl who do need or want to be DT. Main difference I’d say is we shut down or at least slow down a bit sooner with some retail and service businesses, but again not a huge difference from before.
A couple hundred million per year is a rounding error for the Bay Area “tech” titans whose businesses obtain huge benefits from mass transit. A regional tax on local gajillionaires would go a long way towards making up the budget shortfall.
Who am I kidding? We all know this means higher fares for minimum- and low-wage essential workers.
The fiscal situation for cities is destined to get a lot worse and not just for SF though it might be one of the worst in the US.
Government budgets at all levels are dependent upon the asset mania and the loosest credit conditions in history.
@AugustusFrost,
I’m forced to agree 100%.
Municipal finances have become ever-more-dependent on property taxes with the secular decline of small businesses. The 20-40% appreciation we’ve seen in major many/most markets in the past 2 1/2 years is now showing up in property tax bills (many cities & towns froze appraised values through FY 2022) and I’ve finally started hearing reports of homeowners being forced to tap HELOCs to pay their property taxes. I’ve been warning about this happening for the last two years.
We’re sitting on a muni bond timebomb.
What will eventually happen, I’m sure, is that cities & towns will be forced to privatize a lot of stuff to balance the books in the short-term. Which will only lead to worse fiscal problems in the longer-term, IMO.
Yes. What I have been pointing out for a while. Inflation does not only affect your purchases, it gets leveraged up in municipality spending. Like a 50% G&A multiplier.
Privatization of services will just add more OH, G&A and profit layers. It may reduce the increase in your property taxes, but you will just get billed directly for much more.
And financially conservative managers are now officially extinct.
Remember how every business jumped at the opportunity to offshore work (manufacturing, IT software development, call centers, billing services) and downsized or resized their organization and employees. Now due to COVID the remaining “office” workers went remote too….they aren’t coming back to the office either. The days of mass public commuting to work are over period.
Except at Gold ManSacks.
You vil come into se offices. You vil!
“You vil come into se offices. You vil!”
Well, yes, they need to clean out their desks after all.
GS is laying off 3,200 people as of this morning.
What I want to know is how many of the 3,200 were those that refused to come to the office every day?
Hahaha… They are criminals… ooops… businessman, not morons. Those who produce will stay, those in red will be let go. Remote – shremote. People with skills are lacking like never before. The offers I’m receiving from the US these days are stupendous.
…and in Los Angeles, Metro transit also spreads the homeless, mentally ill, drug users and visitors from various exoplanets. There are rumors of occasional “going from Point A to Point B” passengers.
Yep, they’ll get billions of federal and state taxpayer money to deal with a problem they created and nurtured and since the census makes no distinction between legal and illegal residents they’ll maintain their political power even as they lose thousands of tax paying citizens every year. Cities will end up giant favaelas where the residents serve only as bodies to harvest this money and power matrix style.
If vehicle movements are down as well as train commuter numbers, then there will be less “wear and tear” to roads.
Cities can use the money they save from road maintenance and repairs to fund the mass transit shortfall.
Nah, just kidding – the road maintenance crews will just lean on their shovels for longer.
Over 40 years ago, I rode the trolley in New Orleans. A punk pulled a pistol to rob us.
To my amazement, my buddy told him to put his “pea shooter” away or he’d shove it up his azz. Gulp.
It worked. The punk put it away and he stfu.
Nevertheless, I’ve avoided all public transit ever since. It ain’t my cup of tea.
Wow! I rode the streetcar in New Orleans almost daily for about a year back around 1970 and never had an experience like that one. Was I just lucky? Never heard about that happening, either. Maybe I was just lucky.
This was probably about 1979. And, it was at night.
New Orleans is an arm pit. It’s a total dump.
I’ve been there several times for work and while the French Quarter (which is next to Marriott where I stayed) is a tourist destination, it’s dirty and nasty.
I’d never spend a cent of my own money or a second of my time voluntarily to return.
In Hennepin County, Minnesota, a 14.5 mile light rail track connecting Minneapolis and the southwest suburbs to Eden Prairie is now 60% complete.
It is slated to be in service in 2027, nearly a decade after originally planned. Cost so far is $1.8 billion. Nearly one billion more is needed. Right now it is about $500 million unfunded, and Hennepin County just kicked in another $100 million last month.
The Minnesota 2023 state legislative session opened last week and Minnesota is sitting on a $17 billion surplus. Already a fight has begun as the rural Senators and Representatives do not want money funneled into MPLS and the affluent suburbs, and of course, those in the area where the light rail will (probably … someday) run want a handout from the Governor and the State to pay for it.
Way over the initial projected costs & way over the time needed to build and complete.
“Driving that train, high on cocaine
Casey Jones you better, watch your speed
Trouble ahead, trouble behind
And you know that notion just crossed my mind”
Ahhh, a fellow “Dead Head”!
Wait until the economy really turns. That surplus will turn into an even bigger deficit.
I wonder if that train will have a New Potato Caboose.
Only if it’s traveling through the cool Colorado rain.
The good news is…at least they no longer have carpets and cloth seats on BART trains.
Muni Bond risk higher credit spreads and REIT exposure all play into the picture but rising transport costs impacts inflation plus the services costs will increase due to higher transport costs. None of the scenarios show a reduction in core inflation .
The BART ridership issue apparently is a global thing. I was going to comment about WFH as a trend that was phasing in, before the pandemic. Back then, lots of call center stuff was being routed to anywhere cheap labor was available. The pandemic accelerated lots of demographic trends.
“An official said work-from-home maybe a reason for the ridership falling short, while other causes could be increased short distance travel and permanent migration of the labour class from the metropolis and surrounding areas amid the pandemic.
Mumbai’s suburban network….”
This global WFH thing kinda related to BART revenue, kinda brings up another elephant in the room, which is related to a potential global recession unfolding, which by definition is all about a slow down in growth.
Tangentially, kinda related, I was just comparing Silvergate and Robinhood performance over about 5 years, and they both are neck and neck with 90% losses.
In the very BIG picture, what’s the odds of corporations like these bouncing back 90% to just break even?
My concern, is that, while the Fed is working hard to generate demand destruction and slow the economy, there’s overlapping decay already well underway.
Many of the zombie corporations that should fail, will fail alongside established, iconic names that are poorly managed. Those zombies and the entire crypto explosion and a recession with excess cash burn, is going to impact stuff like BART dramatically.
And, all that is shaping up, while wall street is projecting higher earnings for 2023 … Versus massive earnings revisions and unbelievable impairment problems…
Pretty upbeat, right?
I’m guessing it’s actually worse than you think.
If a stock is down 90%, it would have to increase an extra 900% (not 90%) to get back to it’s original value.
You could compare current conditions with the DotCom bubble in 2000-2001. Despite the massive tech stock market crash, there was not a long or severe recession. Wolf has shown that we have likely not seen the end of the tech and crypto crash.
Unemployment reached 5.5% and the GDP dropped 1% during 2000-2001. This is probably a Fed goal.
There wasn’t a housing bubble at that time (except maybe in Silicon Valley and other tech areas).
There also wasn’t low unemployment and high inflation.
I have always thought it would be better for Public Transit systems to just acknowledge upfront that they will not recoup their costs and move on to other advantages that they offer riders.
I agree. We pay a fortune for our highways and roads. Surely, there is money in the budget for public transport, especially rail.
There is a limit to how much the rest of the population can subsidize those who use it.
In the US, it’s not economically feasible at anything close to current economics. I live within a mile (or slightly more) to the nearest rail station in ATL’s (GA) limited network and it’s still not worthwhile to use it. It’s no faster than driving and I have parking at work,
I’ve used it in the past but have no plans to ever use it again.
The road, water and sever systems to the suburbs and exurbs are no better of for economic feasibility.
Asset bubble have propped them up so far, now wait for the toll roads to keep the roads maintained.
Is this of a piece with previous articles noting large capacity of un-leased commercial office space in SF?
It’s all part of the dramatic change that cities have to deal with. Empty offices and empty mass transit run in parallel, and both are results of how work has changed. We will still be struggling with this shift years from now.
At some point perhaps only the very successful will have a physical office to go to. My office was in a lovely building with a nice view surrounded by attractive people…
WFH is good for exactly two things:
a) Depriving public transportation of much-needed revenue
b) Super-charging the offshoring of high-earning jobs
And, yes, the drug addiction/homeless problem in San Francisco is extraordinary.
It’s flat out a rolling drug den that simply isn’t safe to ride.
That ( Drugs and Crime ) and general SF Bay ” Overcrowding ” and the Big One ” No where to Park ” was the reason I left the SF Bay area and sold out in 2002 Moving Rural .
The Tech Layoffs I have been watching as an indicator to see a Possible increase in Construction Job’s Lay off and that has not happened .
Construction Jobs have increased in holding recession off for now.
Yes rolling drug den on Bart is a serious issue with no solid resolve and exactly the sort of issue I decided its time to Leave the Inner City area’s
Why Stay ? Its a world wide Problem of course of any Large Population area
It appears many of the biggest names in tech have mandated at least 3 days/week in the office: Apple, Google, Twitter, Tesla, Snap, Uber and more.
Which tech companies are still allowing permanent, full-time WFH for the foreseeable future?
My daughter use to commute from the East Bay to SF , when she worked for a smaller tech company.
In late 2020, she started to work from home. In 2021 she moved to Northern Colorado and continued to work from home. Last summer she changed jobs to work for GOOGLE. She made it very clear that she would NOT accept GOOGLE’s job offer if she had to be physically present at GOOGLE’s Colorado office more than once per month
BART workers are relatively well compensated, especially those in positions which do not require advanced degrees (train operators, station agents, janitors, some line operations positions, etc – compared to peers with similar educational backgrounds).
Part of the reason for that is the history of strikes and strike threats – even though BART only carried about 10% of commute traffic during peak times (in better days), shutting it down completely was enough to bring horrid gridlock across regional highways as the BART passengers switched to cars, making half hour commutes into two and a half hour commutes in places, especially across choke points like bridges.
The public got so weary of these strike impacts after a few days that the BART board knew that playing tough in negotiations was a media ploy, but them mostly folding to demands just before a strike deadline would soon be forgotten by a public angry about the consequent gridlock, IMO. So the terms just kept getting cushier for employees as they’d stave off last minute strikes with generous settlements. The payroll is a large part of their expense base as well.
What happens now under this new reality will be interesting. There have been very few layoffs at all over the years at BART, but what happens when the fiscal hole gets too big, if no funding savior comes along?
Also, pensions are contracted agency by agency with CalPers – of which BART is one participant – so to the best of my knowledge, if BART runs into financial trouble, the rest of the pension system does not bail their retirees out. Any hits to the promised pensions are taken by the agency that cannot meet their obligation, not spread out among all CalPers participants. Unless the state government or some other big fish jumps in to bail them out.
Before I retired, I rode BART to work every day in the East Bay for decades (and usually walked or took a bus to and from stations). It was very smooth and convenient, and saved a lot of emissions that I could have made if I had driven to work. Mass transit is a useful social function, but funding is almost always an issue.
I don’t envy the position they find themselves in now. It looks like a pretty messy situation to me.
Prayers and best wishes to everyone in water deluged California!
Bob Iger of Disney is mandating four days a week in the office. Disney headquarters is in Burbank near Hollywood.
Commercial real estate loan delinquencies are below 1%. Credit card delinquencies are in an uptrend. Federal Reserve (FRED) Q3 2022 Data
Former bond trading brother reports that Toronto foot traffic in his former Bay Street haunts is about 40% of normal — less on Mondays and Fridays.
Tell you from the frozen North commuter trains don’t physically work, buses do. Rode BART on biz a few times, very handy from airport. Check out CA Inland Empire train boondoggle, cancelled at $100B. Clutch your pearls.
I wasn’t at all interested in a story about BART, but now I’m definitely being drawn into the bigger picture, of global economic dynamics, related to post pandemic consequences.
I think we’ll see increasing (unexpected) global economic stress related to WFH.
This is an example from NZ:
“A newly released report from Employment Hero, the 2022 Remote Work Report, found 48 percent of employees surveyed said they would consider quitting their job if their employers forced them back into the office full-time.”
Keep in mind, approximately half of NZ mortgages will reset to higher rates in 2023.
In my mind, this post pandemic paradigm is paving the way for epic failures globally. I’m not against WFH, but a generational shift in employment infrastructure, may morph into a global economic shock.
It’s as if a compounding error is occurring, not unlike cancer cell mutation. It’s as if the pandemic has sown seeds of chaos which are playing out with a reinvention of how everyone views themselves in this new chaos.
There’s certainly increasing division, polarity and dysfunctional absurdity everywhere — especially after the trump-era, which recently came back to life, with the speaker of house drama.
Seems like we’re at a weird tipping point…
Ahhh yes public unions – disabling the path to the”fix” for fixed costs every time. The next contract negotiations are going to be fun to watch – like watching a train wreck fun.
I took the BART 2-3 months ago. Magnificent. Great cars, fast, quiet, big seats.
They were mandating masks (WTF) but it seems only the locals were wearing them. Most people from the airport didn’t and I certainly would never wear one. But nobody said anything so it was good.
Save the BART.
In my work office there are few of my peers returning to work in the office. Our financial results are dismal. If you think my missing coworkers are productively working you are mistaken. While some business models may support work from home, most will not. Human nature is to do the minimum required to get by.
People keep saying that everything will recover. Why? Because we have such solid state and local leadership? They are busy running businesses out of the state not promoting new businesses.
Anything that is not sustainable will not be sustained. Just like quantitative easing. I do not personally see any ray of hope for California as it must hit bottom before any recovery is possible.
Where were the brand spanking new trains manufactured?…if not USA 🇺🇸 Then their is no need to support it!,
From BART:
“Final assembly of the car is in the United States and the cars contain at least 2/3 American manufactured components, including the Train Control, propulsion system, the brakes, and all the electrical wiring.”
“Jobs have been and will be created locally to support the design, commissioning, warranty and other activities associated with the project.”
“Update: On June 14, 2019 Bombardier Transportation announced it is opening a rail car assembly site in Pittsburg, California to assemble BART’s Fleet of the Future rail cars. This work, which is currently taking place in upstate New York, will be transferred to the Bay Area over the coming months.”
Was Hornell, NY I’m guessing for the recent train cars. I have fond memories of the ‘BART screech’ when I had to fly in to ‘Frisco and take the BART to my destination in the city. I’ve used the NYC subway. BART wins the screech contest hands down. Hearing protection recommended.
Who cares? Dems will find a way to get federal money to bail out any shortcomings. Same thing they did for the Illinois pension funds
“the biggest portion of the expenses is high fixed costs and interest”
Where have I seen this before… optimistic assumptions of endless, uninterrupted growth and outsized returns leveraged out to infinity ultimately proven unrealistic… who’da thunk it?
“Cutting service won’t balance our budgets” concludes an internal study.
They’re losing money on every loop, but planning to make it up on volume, double down, what could go wrong? I’m skeptical, my commuter rail used to run PR adverts claiming 90%+ on-time, but the trains I rode were late ~80% of the time (After reading into it, turns out both were feasibly “true” as they were using funny definitions and denominators)
I don’t know anything about BART but assume it’s much the same as the LIRR or more broadly the MTA. From unrealistic disability claim rates, to ‘bridge gate’, to mismanaged projects like the Eastside tunnel… They are anecdotally rife with stories of waste, fraud, and inefficiency… alleged to be top heavy with politics, management and pensions and from what I’ve heard they were generally poorly run and in financial trouble well before the sea change of work from home culture.
This is what I hear, and I believe it, but wonder how much of it is true, how much can be shown/seen from 10,000 feet up. Any good data that might shed light on operating efficiency? Maybe something going back long-term that could be compared between major metro areas SF, NY, Boston, etc?
Was curious about the BART vs. MTA (commuter lines in/out of the City, not the subways) myself. The MTA lives for corruption and bail outs. But at least the rich folks on the Harlem Line got artsy station overhauls. Nothing like sitting on an ice cold bronze art installation-slash-‘passenger seating’ while waiting on a delayed, dirty train. The stations still reak like urine.
BART and CalTrain are SF arteries and veins.
BART ridership might test the 2M, before rising to 5M/6M. Thereafter BART and CalTrain might fall apart.
Ridership might need decades to recover.
BART and CALTRAIN are like IV Drips INTO SF ME, and, similarly, don’t always introduce good stuff, eh.
Buses and trolleys running through the streets of SF that are the circulation equivalents.
I rode BART to SF from Berzerkeley twice in early ’70s; both times the train stopped under the bay for what seemed like for eva, and after that I took the bus.
Then saw my building swaying about 50 feet in the breeze, and that was the end of that job!!!
Bus was not as fast in theory, it was about the same time, but I did have to walk a bit farther to the office, though in those days that was safe and fun and not poopy as is a fact today.
And that will be the cause of SF going down a lot worse if they, in this case the GUV MINT they, don’t fix it fairly soon…
In any case, if I had the bucks, and could still run fast, I would LOVE to live in SF again, preferably right in the same apt near Coit Tower!!!
I just want to add. Up until April of whenever I was told to gather my stuff, box up stuff for off-site, and work from home due to Covid, I had worked in SF since the late 80’s. Short, medium and long term. No better place to work. Lunch time could mean simply sitting on a bench near the ferry building, or north or south along the wharf. Maybe walk over to and go up and down the Telegraph hill steps. ‘China Town’ was a 12 minute walk. Cheap eats at Lee’s. I’ve lived there, and know fairly well all the neighborhoods, though still some crannies to work on. In the past three months I’ve around twice a month visited: Richmond and inner/outer Sunset districts, Russian Hill, Pac Heights. By foot and a bike at the same time. Laurel Heights, Noe Valley, Ocean Beach, the Presidio, the Maritime Museum, Fort Mason, Fort Funston, Crissy Field, Cow Hollow, Cole Valley, the Park (and its trails), Baker Beach, Buena Vista Park area and from there down to the Mission. The meals at the DeYoung are fantastic, and the collection is pretty good, too. The Legion of Honor better. It is a beautiful city. I go over the same streets, and every time I am amazed at how beautiful it is. I’m lucky to live here, and I do worry about the fate of BART.
I didn’t make it clear. Bad communication. I live over in Berkeley. When the SF Giants shoot off fireworks, I hear it.
1) BART is down 10M from 10.5 to 0.5M, up 38% to 4M.
2) BART might visit the 2M before rising to 5M/6M, a dead cat bounce.
3) The 0.5M in 2020 might have been the lowest in decades.
BART is badly injures.
4) If we enter a prolong downturn, – we might, – BART will need decades to recover, because the whole Bay area will be subjected to a systemic change.
One other very important angle: pensions. Revenue for BART (and other govt. services staffed by union public employees) have terrific and expensive pensions which must be funded one way or another. Or cut – which other union pensions have done. Or the Fed can just print more money. Perhaps cutting pensions and printing money….hard to say what these “geniuses” will do.
Thank you for reporting the numbers on the dire BART finance situation. Great job! Few reporters will do this work. A few comments:
1. BART’s last projections several months back were that it would run out of subsidies from taxpayers across America by Jan of 2026 and reach the cliff, which is half way through FY26. That was a subtle PR stretch using Jan 26 instead of Dec 2025 IMHO. That projection will likely prove to be “Super aspirational” like most projections have been in last 3 years. Based on recent failure to meet ridership projections again, it is likely that fiscal cliff date moves back earlier in 2025.
2. The statement that keeps coming out of BART’s Board President and PR dept that “BART can’t change the fixed costs, so BART can’t cut its way out of the problem” is PR spin for the uninformed public. That bolsters their irresponsible “easy way” approach that BART just needs more money and everything will be fine, while we taxpayers pay for it., and no one needs to look at how the money is spent. I am working on an opinion piece on this topic. Unfortunately, most reporters are not adept at govt agency budgets (just like the BART Board), and so the focus is always on revenue, not on cost efficiency. I don’t know one reporter that can coherently talk about fixed vs variable costs. Additionally, details of BART expenditures are the best kept secret in the SF bay area. Ask any board director, the BART Inspector General, Alameda and Contra Costa Grand Juries, and of course, any reporter who has attempted to ask.
3. For context, BART spends $1.5B ANNUALLY and is the 5th largest transit agency in America.
Isn’t BART the one that has a former employee drawing a close to $900,000 retirement pay annually? With that kind of fiscal responsibility, it’s no wonder the system is going belly up.
That’s peanuts compared to what football coaches get before and after retirement. Firefighters are high on that list. At least I use the BART.