Abstract The capabilities of a transit company to provide service is usually based on the existing commuter traffic. Rapid increases in commuter ridership will cause transit service to deteriorate. The transit companies' ability to respond to increased ridership is controlled by the length of travel by the new riders, the availability of additional buses and trained staff. This study found that under a situation where fuel was allowed to price itself in a free market, the transit company could face a situation of declining revenue per bus mile with increasing patronage. This comes about because those with longer commuter trips find it more advantageous to use transit. The transit patronage increase to be expected with a five per cent reduction in fuel supply is similar to that experienced by a doubling of fuel price. The more uniform change in the trips made throughout the urban area will probably not alter the average length of trip. The transit company should be able to keep the same ratio of passenger revenues to operating costs. The models used to estimate the changes in transit ridership appear to be generally applicable. The model used for the pricing scheme is similar to one used in the Tyneside-Wearside Transportation Study. The experience of Seattle's Transit System over the last year and a half tends to confirm the estimates found in the gasoline rationing model.
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