Demand for bus service grows even as fare revenue plummets

Growth in population and job density in Southern Nevada has lead to an “immediate” need for several new bus routes and expansions, say transportation officials, but a lack of funding and plummeting revenue is holding back any improvements.

“Three of the four fastest growing ZIP codes in the valley currently have absolutely no transit service, zero access,” said Jacob Simmons, senior principal transit operations planner for the Regional Transportation Commission of Southern Nevada (RTC).

The four fastest-growing ZIP codes in Southern Nevada from 2014 to 2018 were 89179, 89148, 89166 and 89141. Of those, only 89148 is partially served by transit currently. The most populated portions of these ZIP codes range from about 1.5 to 3.5 miles from the nearest transit route, leaving large, densely populated pockets throughout the valley without transit.

Areas around the M resort, Blue Diamond Road, and master planned communities like Mountains Edge, Providence, Sky Cannon and Cliff Shadows all completely lack even basic transit service, said Simmons.

“This challenge negatively impacts our entire region, not just the affected areas because it means that those that are transit reliant or chose to use transit are completely excluded from certain places and from certain jobs,” said Simmons.

An analysis of population and job growth by the RTC shows six new routes are needed and that other routes need to be extended and buses run more often to keep up with demand. 

The new routes that need funding include Ann Road through East Tropical Parkway, East Harmon Avenue, Russell Road through Gibson Road, Blue Diamond Road, Cactus Avenue through Horizon Ridge Road, and St. Rose Road through Lake Mead Parkway.

The RTC has 39 transit routes with 404 buses servicing 3,300 transit stops. It is the 14th busiest bus transit system in the United States, and saw 64.4 million riders in the 2018-2019 fiscal year.

“There’s clearly a demand for service,” said Simmons. 

Less transit today than 20 years ago

A new Smiths grocery store that opened in Sky Canyon last year is a mile and a half from any transit. Dense three- and four-story apartment complexes line Blue Diamond Road, Buffalo Drive, Durango Drive and Cimarron Road with no transit for miles, said Simmons. Shopping centers with fast food restaurants and other low-wage jobs have also developed in these areas, but lack of public transit puts those jobs out of reach for low-income Nevadans who rely on public transit.

“The existing problem of certain pockets of the valley having no transit access will continue to worsen to the point where large portions of the valley will be completely unreachable via the transit network,” Simmons said.

The additions RTC wants to make would make transit service available to an additional 260,000 Las Vegas residents and increase frequency to hundreds of thousands more.

But a lack of resources and funding have made it difficult to expand transit routes. Simmons said there is less transit service today per person in the Las Vegas Valley than there was 20 years ago, largely due to the valley’s booming population growth and failure to meet demand.  

These potential improvements would require about a 36 percent increase in funding. The projected cost of operating all the proposed transit routes would be $50.4 million, according to the RTC.

Uber and Lyft eat into profits

Public transit does not generate a profit and is heavily subsidized by sales tax revenue. For instance, in the last fiscal year RTC collected about $75 million in fares but that provided only about 65 percent of needed revenue. The average operating cost per passenger is $2.65, while the average revenue per passenger is 99 cents, meaning there’s a $1.66 subsidy for each rider.

There was a time when RTC saw a $6 million annual profit from public transit revenue, largely driven by tourist dollars in the resort corridor along two routes: the Deuce and the Strip and Downtown Express (SDX). That revenue, in turn, helped finance public transit throughout the city. But a rise of transportation network companies (TNC’s) like Uber and Lyft has eaten into the RTC’s profits on the strip.

This was the first year the RTC has had to subsidize transit on the resort corridor instead of turning a profit. 

“Something has got to change,” Don Snyder, Chair of the RTC’s Transportation Resource Advisory Committee said during a meeting last month. “If the revenue does not change we’ll have no choice but to cut expenses.”

“This is why the ridership on the Strip is so critical,” Snyder said. “That has been the golden goose and the golden goose is not giving.”

Should revenue from the Strip route continue to free-fall, which looks increasingly likely, RTC has authority from the Legislature to seek a sales tax increase via ballot initiative by 2024 to fund current and needed future transit. The RTC is currently in the process of identifying possible revenue streams.

During a meeting with the RTC’s Transportation Resource Advisory Committee last week, state legislators discussed their vision for the future of mass transit funding. Yvanna Cancela, chairwoman of the Nevada Senate Committee on Growth and Infrastructure, vice chair Chris Brooks and Daniele Monroe-Moreno, chairwoman of the Assembly Committee on Growth and Infrastructure, all represent parts of the fastest growing ZIP codes in the valley without transit.

The RTC’s reliance on revenue from the resort corridor is not an option moving forward, said Cancela. 

“That is not a sustainable model as transportation continues to evolve. It is not sustainable for my constituents on Maryland Parkway to rely on the Strip corridor to be successful for them to be able to get from point A to point B,” she said. “It doesn’t work and it assumes that we will always have a high level of revenue.” 

Fight coming over fees?

Monroe-Moreno said one constituent who reached out to her is a single mother who takes public transportation. The woman told her she must leave home an hour and a half before she needs to be at work because the bus comes so infrequently.

Five routes need frequency increases from every 20 minutes to every 15 minutes to meet demand, according to the RTC. Another five routes need to increase from every 30 minutes to every 20 minutes and another two routes need increases from 60 minutes to mostly every 30 minutes.

In order to pay for more frequent service and new routes the RTC must find new revenue streams, said transit officials.

Currently, the RTC uses a portion of the state’s sales tax⁠ to help fund transit services.

While raising vehicle registration fees for electric cars and hybrids has been widely discussed to help pay for public transit, critics worry the bill would disincentivize consumers from buying clean-energy vehicles, but backers say the bill provides an equitable solution to a critical funding problem. Vice chair Brooks said he would fight any additional fees to electric vehicles.

“There is this stigma attached to electric vehicles that it’s for the wealthy and we should tax them,” Brooks said during the RTC’s Transportation Resource Advisory Committee meeting. “Well, it’s easy for 98 percent of the population to say ‘tax that 2 percent.’ That would be the simple and expedient thing to do, but absolutely short-sighted. And that’s why I have said I will fight using any ability I have against an electric vehicle fee.”

In April, Gov. Steve Sisolak signed into law SB358, a bill sponsored by Brooks, which increased the state’s Renewable Portfolio Standard to 50 percent by 2030 with a goal of 100 percent carbon-free energy by 2050. Brooks said in order to meet that standard there would need to be a “massive electrification of the transportation sector” in Nevada which additional charges could put into jeopardy. 

The Legislature is looking for solutions to the decrease in fuel tax revenue. A law passed last session calls for a pilot program to gather data on the annual vehicle miles traveled with the goal of possibly implementing mileage-based user fees to fund the construction, maintenance and repair of public highways as well as public transit.

“It’s clear to me that the time for us to have a big imagination about how to better move Nevadan’s across the state and the city of Las Vegas is both here and also urgently pressing because our city is getting bigger,” said Cancela.

This story was updated to clarify that the RTC uses a portion of the state’s sales tax, not the fuel tax, to help support public transit.