Malaysia’s Public Transit: Breaking Free from Subsidy Dependence

What does ‘progress’ truly mean for public transit? For many, it’s about sleek new trains, expanded networks, and larger budgets. But in reality, true progress means solving the core, systemic failures that keep Malaysia’s public transit trapped in what I call the Endless Emergency—a perpetual state of underperformance, crisis, and financial instability.

Across Malaysia, transit services oscillate between poor and barely adequate—plagued by slow speeds, infrequent schedules, breakdowns, and unreliable operations. Yet, whenever these issues arise, the default response from operators and transit advocates is simple: “We need more funding.” The belief is that if only the government—be it city, state, or federal—would allocate larger subsidies, the system would finally function as it should.

But this endless demand for more funding, in the absence of deep structural reform, has created a cycle of dependence without progress. The emergency never ends because of the choices we’ve made—poor planning, mismanagement, and a lack of self-sustaining financial models.

True progress isn’t about blindly pouring more money into a broken system. It’s about making the tough choices that break the cycle—choices that cities like Hong Kong, Singapore, and Tokyo have made, allowing them to run profitable, efficient, and world-class transit networks. If Malaysia had made different choices in the past, or made the right decisions today, the outcome would be entirely different.

Progress is not just about expanding transit—it’s about fixing its foundation. And until that happens, the Endless Emergency will continue.

Why Public Transit Must Pay for Itself

Today, we challenge a fundamental assumption about public transit—that it should always require government subsidies to function. What if the root of transit’s dysfunction isn’t a lack of funding, but the fact that it fails to cover its own costs through fares? And what if fixing this single problem could solve everything else?

The reality is simple: Transit should be run like a business, not a charity, and definitely not a never-ending cost center. Yet, in Malaysia, public transport has been treated as a perpetual welfare project, reliant on constant bailouts. Instead of building a self-sustaining system, we’ve created one that demands more money while delivering subpar service—slow, unreliable, and inconvenient.

Contrast this with cities like Hong Kong, Tokyo, and Singapore, where public transit is profitable. How? Because their systems operate with the mindset that ridership = revenue, and service quality = profit. Instead of chasing subsidies, they attract riders by delivering a fast, efficient, and reliable experience that people are willing to pay for.

If we want to fix public transit, we must first fix its business model. The moment transit pays for itself, everything changes:

??Better service—because efficiency and reliability drive profits.

??Less political interference—because it’s no longer reliant on government handouts.

??Real growth—because expansion is based on demand, not subsidies.

This isn’t just a thought experiment—it’s a proven formula. But to make it happen, we must stop seeing transit as a financial burden and start treating it as an economic engine.

Public transit must sustain itself—or it will never escape the cycle of crisis.

The Logic of Cost Recovery

Public transit, in its ideal form, should function like a well-run business—delivering reliable service, responding to rider demand, and making operational decisions based on efficiency and sustainability. But in most subsidized transit systems, especially in North America and Malaysia, this logic breaks down entirely. Why? Because operators don’t make decisions based on revenue from riders—instead, they are beholden to government subsidies.

If Coca-Cola wants to increase profits, it plays with variables it directly controls:

? Sell more drinks through marketing

? Reduce production costs by optimizing supply chains

? Adjust pricing based on market demand

Every decision is rooted in the fact that profit flows from selling soft drinks—there is no confusion about how the business must operate.

But a public transit operator doesn’t have that luxury. It only gets about half its revenue from fares, with the rest coming from government funding. This distorts decision-making at every level:

1. Route Planning: Not Driven by Demand, but Politics

How it should work: If transit were financially self-sufficient, it would allocate service where demand is highest.

How it actually works: Because governments fund transit, route planning is often dictated by political interests—not ridership numbers.

For example, cutting inefficient, underused routes should be common sense. But in politically influenced systems, service often continues despite huge losses, just to avoid upsetting certain constituencies. This results in wasteful spending, lower efficiency, and a weaker transit network overall.

2. Capital Investments: Decisions Made for Political Optics, Not Efficiency

How it should work: Transit agencies should invest in infrastructure that lowers costs and improves service.

How it actually works: Governments force transit agencies into expensive, impractical projects for political gain.

Example? Mandated experiments with hydrogen-powered buses—many agencies knew these were costly, unreliable, and unsuited for local conditions. But because funding came with strings attached, they had no choice but to comply—only to quietly abandon the project once the political cycle moved on. These wasteful spending patterns are impossible in a self-sustaining transit model.

3. Labour Costs: No Market Discipline = No Accountability

How it should work: In a private business, wage growth aligns with company performance—if revenue is weak, salary increases slow.

How it actually works: In subsidized transit, unions negotiate knowing that agencies can always ask for more funding—and management has no financial constraint to push back.

Over time, this spiraling cost structure leads to a transit system that is increasingly expensive to operate, yet remains inefficient, fueling the Endless Emergency of constant funding shortfalls and service breakdowns.

4. Management & Performance: No Real Incentives for Efficiency

How it should work: Performance should be judged by ridership growth, cost control, and service reliability—metrics that reflect public demand.

How it actually works: Without market discipline, managers instead focus on softer, politically safer goals—good labour relations, media-friendly projects, or simply maintaining the status quo.

In this system, poor management is never held accountable, because there are always alternative metrics to highlight—ridership might be falling, but look, cost-per-rider improved! Or service reliability is suffering, but wait, we expanded geographic coverage! The result? A system that’s always underperforming, yet always justifying its failures.

The Only Way Forward: End the Subsidy Dependency

If transit covered its own costs, everything would change:

? Routes would be demand-driven—high-ridership areas get more service, low-demand routes are cut.

? Capital investments would focus on real efficiency gains, not political vanity projects.

? Labour costs would stay under control, ensuring long-term financial sustainability.

? Management would be performance-driven, accountable for real ridership and service quality improvements.

The root of transit’s dysfunction isn’t insufficient funding—it’s the fact that transit agencies don’t operate like businesses. Until that changes, the Endless Emergency will continue.

Public transit must pay for itself—or it will forever be trapped in crisis.

The Business Case for Cost Recovery

Public transit does not have to be a financial black hole. It does not have to exist in a perpetual state of crisis, waiting for the next government bailout just to keep the trains running. There is a better way—a way that treats transit like a real business, focused on efficiency, sustainability, and customer satisfaction.

To understand this, let’s contrast transit operators with another essential public service: electric utilities.

1. What Transit Can Learn from Electric Utilities

Electric utilities, like transit systems, are regulated monopolies—but they cover their costs through user fees, not endless subsidies. Their financial model is simple:

??User fees cover operational costs.

??Revenue funds infrastructure maintenance and upgrades.

??A modest, regulated profit ensures long-term sustainability.

Because of this, utility executives have clear incentives:

??Serve customers as efficiently as possible to maintain profitability.

??Invest in infrastructure only when it makes financial sense.

??No bailouts—poor management gets replaced, not rewarded.

Transit should operate under the same principles.

2. Transit Agencies Must Become Financially Independent

Instead of relying on government funding, transit agencies should be expected to cover their costs from fares—just like utilities do with electricity rates. This would:

?? Force transit executives to focus on service quality—because ridership (not subsidies) would drive revenue.

?? Ensure financial sustainability—eliminating wasteful spending and politically motivated projects.

?? Encourage innovation—because better service = more riders = more revenue.

A transit agency under this model would be regulated, ensuring:

?? Fares are high enough to sustain good service but no higher than necessary.

?? No political interference—transit decisions would be based on ridership demand, not political favors.

?? Executives are accountable—if they fail to serve customers, they’re replaced, not bailed out.

3. What Does Transit Actually Sell?

Coca-Cola sells soft drinks. Electric companies sell power. So, what does transit sell?

Right now, transit agencies juggle too many conflicting goals:

??Maximize ridership.

??Provide service across an entire geography, even where demand is low.

??Keep fares low while subsidizing certain groups (students, veterans, seniors).

??Promote environmental sustainability.

But no business can effectively chase multiple conflicting goals at once.

Instead, transit agencies should focus on the one goal that drives everything else: Ridership.

4. Why Ridership Must Be the #1 Priority

Higher ridership = More revenue = Financial sustainability.

More riders = Justification for system expansion.

Fuller trains/buses = Better service efficiency & lower costs per passenger.

Reliable transit = More car users switching to public transport.

Everything else—accessibility, affordability, sustainability—flows from a well-used, financially sound transit system.

When ridership is strong, the need for subsidies disappears. Transit becomes self-sustaining, like an electric utility. And once that happens, the cycle of crisis, inefficiency, and political interference finally ends.

5. The Future of Public Transit: A Business, Not a Charity

For too long, transit has been treated as a government-funded social service, not a vital economic tool. It’s time for a new model, where transit:

? Pays for itself through fares.

? Operates under a clear business mandate.

? Focuses entirely on growing ridership.

This is the only way to build a transit system that is reliable, efficient, and financially sustainable for the long term. Anything less, and we remain trapped in the Endless Emergency.

The Ridership Imperative

If public transit were run like a business, ridership would become the ultimate measure of success. Instead of depending on endless subsidies, transit agencies would cover their costs entirely through fares—just like regulated utilities do with electricity and water.

The logic is simple: With fares capped at the level needed to sustain operations, and government subsidies eliminated, the only way for a transit agency to increase revenue is to attract more riders.

This fundamental shift would redefine how transit operates, aligning every decision—route planning, pricing, labor relations, and management incentives—around a single, clear mission: maximize ridership while controlling costs.

1. A Business-Like Approach to Fares

In a self-sustaining transit system, fares would be:

? Set high enough to cover operating costs and maintain infrastructure.

? Regulated to prevent unnecessary price hikes, ensuring affordability.

? Directly tied to ridership—the more people use transit, the more stable fares become.

This would mean a higher initial cost per ride than today's subsidized rates. Fares would at least double in many places. But instead of fluctuating with government budgets, they would stabilize over time—and, as ridership grows, fares could even decrease due to economies of scale.

2. Smarter Route Planning

Today, transit routes are often spread too thinly, covering wide geographic areas but operating at low frequency, making the system inconvenient and unreliable. A ridership-first approach would change this:

??Service would be concentrated where demand is highest. Instead of wasting resources on near-empty routes, transit would focus on high-density corridors with frequent service.

??Fewer route kilometers, but more frequent trips. A smaller network that runs every 5-10 minutes is far more useful than a large, infrequent one with 30-60 minute waits.

??Reliability would improve, making transit a real alternative to driving.

Instead of planning transit like a public utility that "must serve everyone," agencies would prioritize ridership growth, leading to more useful service for more people.

3. Rethinking Labor Relations

In a self-sustaining system, both management and labor would have clear financial constraints:

??Unions would recognize that wage growth is tied to agency profitability.

??Extended strikes would be risky—driving away ridership would shrink future revenue.

??Negotiations would be grounded in financial reality, just like in private industry.

This doesn’t mean labor relations would be perfect, but transit agencies wouldn’t be able to simply demand more government funding to cover higher costs—forcing real negotiation and cost control.

4. How Management Would Change

Under a cost-recovery model, management’s focus would shift dramatically. Instead of chasing political approval, executives would live and die by two core metrics:

Service Quality = Ridership-per-service-hour → How many people use each hour of transit service? The goal would be to maximize usage through better frequency, reliability, and customer experience.

Operating Efficiency = Cost-per-rider → How efficiently does the agency serve each rider? Cutting costs without harming service quality would become the top priority.

? Secondary metrics (on-time performance, customer satisfaction, route efficiency) would support these core goals, but not replace them.

? Unlike today’s vague mandates, every management decision—adding routes, upgrading technology, changing fares—would be judged by its impact on ridership and cost efficiency.

This clarity of purpose would eliminate today’s confused, politically driven transit planning and replace it with hard numbers and real accountability.

5. This Isn’t a Fantasy—It’s How Transit Used to Work

Some argue that transit can’t survive without subsidies. But history proves otherwise: Hong Kong, Singapore, and Tokyo have profitable transit systems today. New York’s subway and Toronto’s early rail lines were originally built and run by private companies—without subsidies. For much of the 19th and 20th centuries, public transit across North America was self-sustaining.

The idea that transit must be a financial burden is a modern, broken assumption. The truth is: transit can pay for itself—if it’s designed to do so.

6. The Future of Transit: A Virtuous Cycle

By focusing entirely on growing ridership while covering costs, transit agencies would finally escape the Endless Emergency and enter a cycle of sustained improvement:

Higher ridership → More revenue ?? More revenue → Better service ?? Better service → More ridership ?? More ridership → Fare stability & system expansion

This is the only way to build a transit system that grows, improves, and lasts—without relying on endless bailouts.

Public transit must be a business—not a charity. The future depends on ridership, not subsidies.

Addressing the Controversy Head-On

At this point, it’s important to acknowledge an unavoidable truth: this plan would be incredibly controversial. Restructuring public transit to be self-sustaining, ridership-driven, and free from government dependence would challenge long-standing assumptions about how transit should work.

But controversial doesn’t mean wrong. Let’s break down the biggest criticisms—and why they don’t hold up.

1. This is just privatization! You’re putting profits over people!

Perhaps the first and loudest criticism would be that this plan sounds like privatization—that turning transit into a self-sustaining system would prioritize profits over public need.

?? Reality check: We don’t object to power companies covering their costs. We don’t demand that water utilities be permanently subsidized. Instead, we regulate them to ensure fair pricing while maintaining financial independence.

?? Why should transit be any different? A transit system that pays for itself isn’t anti-public—it’s pro-sustainability. By aligning financial incentives with ridership growth, it ensures that transit remains reliable, frequent, and well-maintained—not at the mercy of political cycles.

2. Fares will skyrocket! Riders will have to pay way more!

The most immediate concern for riders is that fares would rise—potentially doubling. That’s true at first. But here’s the question:

Shouldn’t riders be expected to pay what the service actually costs?

Right now, most transit users aren’t paying the full cost of their ride—taxpayers who may never use transit are covering the difference. That’s fundamentally unfair.

Besides, many riders would gladly pay more for a system that actually works—one that runs frequently, is clean, reliable, and free from constant breakdowns and delays. If higher fares meant:

? No more waiting 30+ minutes for a train.

? No more random breakdowns.

? No more overcrowded or unsafe conditions.

Wouldn’t that be worth the trade-off?

And as ridership increases, efficiencies would drive costs down—meaning fares would stabilize or even decrease over time.

3. This is class warfare! What about people who can’t afford higher fares?

This is the hardest concern to answer—and the most important. A self-sustaining transit system means routes with low ridership would be cut. But these routes often serve the most vulnerable populations—students, the elderly, low-income workers, and immigrants.

? Abandoning these riders is not an option.

? But that doesn’t mean the entire system should be broken to accommodate them.

Here’s the solution: Subsidy does have a place in transit—but it must be structured in a way that doesn’t distort the entire system.

There are two ways to do this without warping incentives:

?? Option 1: Subsidize the Rider, Not the System Instead of artificially lowering fares for everyone, directly assist those who need it most.

• Digital farecards already exist. Governments could deposit monthly transit credits for low-income riders, students, seniors, or veterans.
• This keeps the transit system financially sustainable while ensuring vulnerable groups can still afford to ride.

?? Option 2: Subsidize the Route, Not the Operator As David Levinson proposed, money-losing routes should be contracted out separately.

• If a government wants to maintain a low-ridership route (such as one serving a rural or low-income area), it pays the transit agency directly to operate it.
• This makes subsidies transparent—showing exactly how much these routes cost taxpayers and allowing policymakers to decide whether to continue funding them.
• Meanwhile, the core transit network remains financially independent, free to focus on high-ridership service that funds itself.

By separating essential subsidies from the main transit network, we get the best of both worlds:

?? A transit system that is efficient, reliable, and financially stable.

?? Targeted support for riders and routes that need extra help—without distorting the whole system.

4. This is impossible! Transit has always needed subsidies!

False. Not only is self-sustaining transit possible, but it’s already a reality in multiple cities.

?? Hong Kong’s MTR, Tokyo’s rail network, and Singapore’s MRT all cover their own costs—and even turn a profit.

?? Historically, transit systems in New York, Toronto, and other North American cities were originally built by private companies—without government funding.

The question isn’t whether transit can pay for itself—it already has before. The real question is whether we have the will to make it happen again.

5. So what’s the bottom line?

This plan challenges the status quo—and that’s exactly why it’s needed.

?? No more politically driven route planning.

?? No more government bailouts for failing systems.

?? No more unreliable, underfunded transit trapped in the Endless Emergency.

Instead, we get:

? A transit system that is financially self-sustaining.

? A focus on ridership growth, not political favors.

? Higher service quality, more reliability, and greater efficiency.

Yes, it’s controversial. But real progress always is. And if we want a transit system that actually works, we need to stop fearing change—and start demanding solutions.

Fixing Transit by Fixing What Drives It

Every decision—by individuals, businesses, and governments—is shaped by incentives. And right now, public transit is failing because its incentives are completely misaligned.

In an ideal world, transit wouldn’t need subsidies—but neither would urban roads. By refusing to implement congestion charges, we are effectively subsidizing car travel, making it artificially cheap to drive while forcing transit to compete on an uneven playing field.

The True Cost of Roads

• Governments spend billions maintaining highways and city streets.
• Congestion wastes time for every driver, making travel slower and less efficient.
• Yet, drivers don’t pay directly for the burden they create—unlike transit users, who must pay fares.

A true cost-recovery model for roads—via congestion pricing—would level the playing field. If driving carried its true cost, transit would instantly become more attractive, boosting ridership and reducing traffic.

But that’s a debate for another day.

The Key to Ending the Endless Emergency

Right now, transit agencies lack a clear, singular focus. They juggle conflicting goals—political demands, geographic coverage, and environmental policies—while ridership remains an afterthought.

This warped incentive structure is the root cause of the Endless Emergency—the cycle of underfunding, inefficiency, and poor service.

The solution? Align transit incentives around ridership growth.

? More riders → More revenue → Better service

? Better service → More riders → Financial stability

? High-frequency, high-demand routes → A system people actually want to use

This would create a virtuous cycle, where transit improves because riders—not subsidies—drive success.

Yes, Change Is Hard—But Real Progress Always Is

Shifting to a self-sustaining transit model won’t be easy. There are entrenched interests—politicians, bureaucracies, unions—that resist reform.

But if we want a transit system that actually works, we need to fix what drives it. Aligning incentives to prioritize ridership is the first step toward real progress. Because when behavior follows the right incentives, everything else falls into place.

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