Indy’s Red Line (and its successors): a microcosm of the transit cycle

Andrew Smith
8 min readJun 12, 2023

One day, Lyle Lanley bursts into the fictional town of Springfield and starts selling them on the benefits of a monorail.

Next thing you know, the entire town is bursting out into song as to how the monorail will transform Springfield and put it on the map — just like it did for Brockway and North Haverbook.

The Springfield monorail never lasted — it was a disaster from the moment Homer Simpson fired up the first train.

A 30-minute episode may leave out a few details in the interests of time, but it does illustrate the transit cycle.

Transit boosters push to introduce rapid transit to a community, pointing out economic benefits, huge ridership numbers and how it will transform an area, all while breaking “car dependency.”

They lobby key coucilors, the federal government jumps in with some cash and maybe even slip a referendum onto the ballot at a time when the most motivated voters — the transit boosters — are likely to turn out and tip the outcome.

The ridership numbers turn out to be way overestimated, revenues aren’t enough to cover costs and cuts have to be made. But because this is the shiny new object and the center of attention and usually serves the middle-class and upper-middle-class communities they needed to get votes from, cuts will be made elsewhere in the system, often on conventional buses routes that serve communities that are more likely to rely on them.

When ridership and revenues still stay below estimates, the agency runs to the local government with hat in hand, begging for more funding. Meanwhile, the local city council, with a lot of sunk cost and political capital into the transit system, thinks of ways to force people to ride, which often includes intentionally creating traffic congestion along the route in an attempt to force a “mode switch” from the private automobile to the BRT or light rail line.

While it may not fall into complete disrepair like the one Lyle Lanley sold to the Simpsons’ fictional Springfield, rapid transit ends up being a white elephant in a lot of communities.

It’s a phenomenon public choice economists call concentrated benefits and dispersed costs. Those who are most likely to benefit from the project are heavily motivated to support it and will lobby, vote and convince their friends and neighbors to vote. Those who are not likely to benefit generally do not see the cost as being high enough to be informed or motivated to vote no. Even though families in the corner of southeastern Franklin Township or northwestern Pike Township, who would be at least a 20-minute drive from the nearest rapid transit station once the system is built out — will not see much, if any, benefit from this network, they will pay the same as those who live across the street, 25 cents on every $100. But in the large scheme, someone making $80,000 per year would pay $200 in additional taxes. While that’s four or five restaurant trips for a family of four per year, it works out to about $4 per paycheck, which is not likely to motivate people to vote “no” as much as it motivates the “yes” voters who would perceive a daily benefit. I refer to it as “shiny new toy” syndrome. Elected officials love ribbon cuttings and big projects to be able to run for re-election on — and to show off to their friends from other communities.

That cycle plays out repeatedly, and it’s playing out in Indianapolis, where the municipal planning organization had high hopes for a robust six-county transit system hubbing out from downtown Indianapolis. What they really wanted was an angle to tax the suburban counties and dangle them a couple of token routes in exchange, with the bulk of the service benefiting the urban core. Only one county — Marion County, which houses Indianapolis — took the bait and a scaled-back but still robust system was developed.

Transit is a classic example of concentrated benefits and dispersed costs. Marion County taxpayers voted themselves a 0.25% income tax increase to fund the system, even though the vast majority will never use it. The rapid transit system features three bus lines — the first being a north-south one that conveniently runs through almost every gentrified neighborhood full of left-of-center urban professionals and connects it with downtown and the bars in Broad Ripple and Fountain Square. Not suprisingly, the first line — the Red Line — would be built to serve transit’s biggest boosters. A second line, which is meant to serve the northeast side and Lawrence and largely serve lower-income communities more likely to rely on transit, is currently under construction. A third — running along Washington Street, or old U.S. 40 — is slated for future construction. It would serve the airport, which again, would have made the most sense for the first rapid transit line, as business and convention travelers are most likely to need a quick, inexpensive shuttle from the airport to downtown without having to rent a car.

But very quickly, cracks began to show. After a summer loss-leader “fare-free” period to try to induce people to use the service, ridership began to settle in at below half of estimates. The ridership of the lines served in the general area of the Red Line was approximately 6,000 per day, according to IndyGo documentation. IndyGo projected 11,000 riders per day once BRT was implemented. According to IndyGo’s data, the average for the first four months of 2023 was 3,693 riders per day on the Red Line. So it appears to not have led to any negligible increase in ridership, but has spent — and is spending — millions to provide boutique service to the same people who were already being served with conventional buses.

Meanwhile, the bill authorizing funding for rapid transit required 10% to be raised through sources other than from fares and tax revenue —essentially, advertising and fundraising. IndyGo ignored it, likely assuming the provision was something it had to agree to in order to get approval, but would be hand-waved away once the line was built. When pressed by State Sen. Aaron Freeman (R-Indianapolis) in 2019, IndyGo admitted it had not raised any revenue from those outside sources. Also, the agency was required to provide at least 25% of operating revenue through fares. Per Freeman, that number was 16%.

The oversold ridership is the first problem. Extra charging stations had to quickly be built because the buses in the all-electric fleet were not holding their charges long enough. Now, less than four years into the Red Line’s existence, many stations and the dedicated road infrastructure for the buses are being rebuilt because the city did not account for the extra weight of the electric buses, which has caused damage to the pavement. Again, that reeks of a job that was “let’s get it done now, and get it approved, then we’ll fix the problems later.”

The second is, the cost of running the BRT system frequently leads to service cuts in other areas, likely lower-income areas that are more reliant on the lower-cost (and for a low-density city like Indianapolis, perfectly-adequate) conventional bus system.

And the third is, as ridership on rapid transit stays low, transportation and transit agencies collude to try to intentionally snarl traffic to try to make driving a frustrating experience to nudge people to abandon driving in favor of transit. In Minnesota, the state DOT has made it a goal to reduce vehicle miles traveled by 20% and has, since 2010, stated relieving congestion is no longer a goal, but instead “providing alternatives.”

We’re seeing that in Indianapolis. Most of the BRT routes are on dedicated lanes, which means a reduction of one lane of road capacity to serve the bus. For most of the roads the Red Line is on, it’s reducing from four lanes to three, or three lanes to two, or in the case of College Avenue, it’s a secondary street so there won’t be as much traffic impact (but the impact on parking and congestion have caused issues).

However, the impending Blue Line will cause four-lane Washington Street — the major east-west surface artery in the city — to become a two-lane road, which will undoubtedly cause congestion on a significant commuter route that frequently sees more than 10,000 cars per day, especially with left turns banned on portions of the route. Westside residents were successfully able to get a portion of the Blue Line to the airport moved to I-70 (although it is being couched as a cost-cutting move by the agency).

Another reality is that while ridership numbers are vastly underestimated, so are costs. The Blue Line, which hasn’t been built yet, was initially slated for $220 million. Its projected cost is now more than $500 million.

Congestion, cost overruns and unexpected failures that come after the bill has been approved. That’s a microcosm of the typical transit life cycle.

In the first half of the 20th century, most transit was private — trolleys and interurbans were run by electric companies and small jitney services served many municipalities. But to stay in business, private firms have to be profitable and serve their customers. If they don’t, they’ll eventually go bankrupt. Sunk costs are not a reason to continue a failing business. And Indianapolis saw that with the small monorail that connected its downtown hospitals. As the cost of operating it became too high, it was shut down. Meanwhile, when public entities are not meeting expectations, funding goals, budget or are simply money pits, they often call for — and receive — more money to complete the mission. They use the fact that consumers have continually rejected the service as justification for more funding. Sunk costs become a reason to double down, rather than a reason to pull back and proceed with caution.

There is a place for transit in largely suburban, low-density cities like Indianapolis and most small and mid-sized metro areas in the country. Conventional buses — which are cheaper to operate, more flexible and can be easily changed to fit market conditions — operating on either a grid or a hub-and-spoke system are adequate to serve the needs of most transit commuters. Rapid transit is a costly boutique operation often aimed not at transit riders, but at middle and upper-class civic boosters and urbanists who want a shiny new toy. But for the vast majority of commuters, the most important approach to transportation is to ensure the road network is seen as a complement, not a competitor.

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Andrew Smith

Andrew Smith is an economics instructor at New Palestine (IN) High School and an adjunct instructor for Vincennes University