1. Transport
December 17, 2014

Why cities need public transport to be competitive

By Alain Flausch

Try to imagine for a moment, difficult as it may be, a major European city – London, Paris, or Madrid – without public transport. Picture the chaos as the whole city grinds to a halt: the congestion, the pollution, the noise, the stress…

It’s easy to take it for granted, as we go about our daily lives. But public transport is one of the key ingredients in making our cities both environmentally sustainable and economically competitive.

However, while the social advantages of public transport are well known, its economic benefits are less often discussed. In fact, the sector accounts for €130-150bn of the EU’s GDP each year, as well as providing 1.2m jobs and indirectly creating the conditions for an estimated 2-2.5m more. In other words, public transport is in fact a significant motor for economic development in itself.

That’s why, in London, one of the major advocates for the soon-to-be completed Crossrail project was the business sector: it realised that investment in public transport is key to matching employers with appropriately skilled employees, and retailers with customers. Indeed, public transport helps to increase labour force mobility, thus opening up a wider variety of employment and learning opportunities.

Public transport itself is also a major contributor to both national and local city economies through the diverse range of skilled, high-tech jobs that it offers directly. In many European cities (Brussels, Amsterdam, Barcelona, Paris), public transport operators are in fact the largest employers. These companies offer employment to local people at the service of the local community. They also provide jobs that cannot be outsourced or “off-shored”.

The capital investment in projects such as Crossrail sparks a chain reaction in business activity up to three of four times the initial investment, enabling and promoting urban densification and greater urban productivity. Investments such as these can also provide up to twice as many local jobs than investment in other areas, such as roads, due to their complexity and thus the variety of competencies required.

Such projects can also help to act as a catalyst for wider urban development, helping to attract businesses and private investment to cities. The opening of a new metro line in the French city of Lyon, for example, quadrupled the rate of urban regeneration in the corridor it served; the proportion of new buildings developed along the route that are used for commercial purposes stands at 60 per cent, compared to just 13 per cent elsewhere in the city.

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While large-scale public transport investment projects are undoubtedly expensive, they are actually significantly less expensive than the direct cost of congestion. Traffic congestion can seriously harm the competitiveness of cities, affecting travel time reliability and business productivity. About 50 per cent of the cost of traffic congestion is borne by business; it is estimated to cost the EU economy a staggering €100bn per year.

By transporting large numbers of people more efficiently, public transport has a major role to play in alleviating congestion and smoothing traffic flows. If the external costs and social impacts of congestion, such as pollution, are factored in, it becomes even clearer that investing in public transport is actually good value for money.

There’s one last element in how public transport helps make cities more competitive: that’s what we call the “global appeal” of a city. Public transport networks and infrastructure play an essential role in city tourism development, as it is often the prime means for visitors – whether on business or for leisure – to get about the city, to access heritage and cultural sites, and to access local businesses. Research from the American Public Transportation Association has shown that cities with rail transport from nearby airports to the city centre are more attractive for both business travellers and international conferences and meetings, thus benefitting local economies.

Public transport therefore generates a wide range of benefits for cities, well beyond just the mobility sphere. By directly contributing to the competitiveness of cities, public transport enables savings and creates value for individuals, businesses and public authorities, notably through higher tax revenues. When public transport schemes are integrated into economic development strategies – urban development and housing policies, education and employment strategies, as well as the tourism sector – cities are able to truly flourish.

 Alain Flausch is secretary general of UITP, the International Association of Public Transport.

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