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SF MUNICIPAL TRANSPORTATION AUTHORITY

October 2025

10/9/2025 9:36 AM

DRAFT

A real life Trolly Problem

Note: SFMTA headcount data is notoriously noisy and inconsistent. These numbers reflect best efforts using publicly-available information

Coming to Grips With Our New Population Reality

• SF resident population down 45k since 2019… back to 2012 level, largest exodus since 1906
• SF weekday (workday) population down 160k since 2019… back to 2010 level
• CA DoF projects SF NEVER returning to 2019 population level
• We need to reset our operations and expectations to fit the city we actually have

US Census

CA Department of Financeh

Young Adult Exodus Reduces Projection

• SF has seen domestic migration net outflow since 2012, offset by more resident births than deaths and international immigration 2010-2018
• 2021 exodus was driven by 20-35 year olds, and their loss has resulted in the collapse of the long term population projection for SF
• Only 65+ age segment grew

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CA Department of Finance

usafacts.org

MUNI Ridership History and Trend

• After recovering through 2023, ridership has flatlined

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• 74% avg weekly index
• Weekday: 70%
• Weekend: 90%

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https://www.sfmta.com/reports/muni-ridership-average-weekday-ridership

Less Frequent Usage Explains A Lot

• Half the 5-day/week riders now ride 3 days

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• Explains half of the reduced ridership

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• Most likely results from WFH

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• WFH is killing MUNI

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Route Recovery Detail – Some Up / Most Down

• Muni operates 7 light rail lines, 2 streetcar lines (E Embarcadero and F Market & Wharves), and 3 cable car lines. Daytime bus service includes 44 local routes, 5 limited-stop "Rapid" routes, and 15 peak-hour express routes.

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• 52 bus lines on the SFMTA ridership recovery site …
• Overall recovery at 83% index as of July ‘25, up a bit from 81% in February ‘25
• 9 have fully recovered to 2019 ridership levels or better, with another 16 showing promise
• Bottom 27 routes continue to struggle and are recovering slowly

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https://www.sfmta.com/reports/muni-ridership-recovery-percentage-route-and-month

• Demand-based route management will be needed in light of financial constraints

WFH Trends – No Trend Yet

• SF has begun feeling more vibrant recently
• Not seeing it in the RTO data yet
• RTO in SF is tracked and published by two sources: Kastle Systems and Placer.ai
• Kastle tracks 2.6x the number of buildings and has broader coverage (Placer focuses on higher-end buildings, and these are known to have lower vacancy as a class and higher attendance)
• Kastle data shows RTO plateau in most markets including SF
• Peak-day occupancy has been stuck around 51% for over a year, and low-day occupancy around 23%

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https://www.kastle.com/safety-wellness/getting-america-back-to-work/

Ridership and Revenue Challenges Predate the Pandemic

• MUNI ridership had flatlined 2012-2019 despite the city’s growing population
• Rides per capita shrank at (1.2%) per year
• National trend… average ridership declined every year in the U.S. 2014-2019
• Passenger revenue was declining
• Official fares rose with inflation and operating costs…
• …but expanded free/discounted fares combined with lower collections reduced revenue per ride from $1.36 to $1.01, or a shrink rate of (7.2%) per year
• Now down to $0.64, or half the 2013 revenue per ride on a nominal basis… one-third adjusted for inflation

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https://www.transit.dot.gov/ntd/transit-agency-profiles/city-and-county-san-francisco

• MTA estimates that fare evasion was 12% in 2019 and is 20% now
• If accurate, that would mean additional passenger revenue of $25M+ is evaded today
• MTA reduced the number of transit fare inspectors from 93 in 2010 to 45 in 2024; hired 35 more in 2024… What else can be done… front door boarding? Accelerate required fare scan with tone? More PR on the importance of paying? Other?

Fare Collections Should Be Higher

• Adult single ride full fare was $3.00 cash or $2.50 MuniMobile/Clipper (now $2.75)

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• SF MUNI has theoretical full fare of about $340M at today’s ridership versus $107M collected

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• Discounts for Clipper Card and monthly pass usage as well as targeted demographics reduce by about $110M

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• Fare evasion costs another $30M

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• Where is the missing $45-70M?

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• Result is that effective revenue is 25% of full fare
• Consumers don’t value/respect what isn’t priced

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Farebox Recovery (Portion of Transit Cost Paid by Riders)

• Prepandemic metric of 24% in National Transit Database reporting
• Now running low-teens… down 12% *
• Typical national benchmark was 25-33% pre-pandemic

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• Returning to historical FBR at current ridership levels would generate $67M

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• Ridership recovery to prepandemic level of 225M per year would generate another $50M

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* SFMTA calculates this number differently, but the trend is the same

Muni C-Sat Ratings Up in 2024… Where is the 2025 Survey?

• In an August 2024 survey release, 72% of riders gave an overall rating of Excellent (19%) or Good (53%)

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• No surprise… expect higher C-Sat with sparse ridership
• Key factors are crowding and on- time performance, both of which improve with lower ridership
• Puts MUNI back in line with 2016-2017 ratings

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• TBD whether 2024 was an aberration or a trend
• SFMTA has not released 2025 survey results… WHERE ARE THEY?

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Favorable Operating Benchmarks Pre-Pandemic

• Not only was CSat high in 2017…

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• System operating cost was benchmarking well

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• Cost per trip was less than average, at $4.15/ride (adjusted for inflation to today’s dollars)

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• Achieving these ride cost metrics again should be a key priority… $4.85 now🡪$4.15/ride would save something like $110M (using 225M normalized ride volume in both cases, and prior to recent accounting re-allocations)

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SFMTA Operating Expense Ratio Now Among The Worst

• Compared to other major transit systems across the country…

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• SF Muni has the third-highest operating cost per car-equivalent vehicle revenue mile (CEVRM)…

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• And the second highest operating cost per passenger mile travelled (PMT)

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https://www.transit.dot.gov/sites/fta.dot.gov/files/2024-12/2023%20National%20Transit%20Summaries%20and%20Trends_1.2.pdf

BETTER

WORSE

SFMTA Strategy: The War on Cars

• Since 2017, the SF Department of the Environment Climate Action Plan has set a target of 80% of intracity and intercity trips via low carbon modes by 2030
• Defined as public transit, walking, biking, and shared EVs… sometimes defined as including taxis or cars with 3+ people
• “Achieving San Francisco’s climate goals for transportation will require a dramatic and sustained shift away from driving as the main travel choice.” … “Often, people travel by car because it is their only practical option or is simply more predictable and time efficient than the alternatives. Despite investments by the City, some transit routes can be slow and unreliable, and biking and walking are more dangerous on streets designed for motor vehicles. Successfully shifting trips to transit, walking, and biking means making these choices safe, convenient, reliable—and even fun. This can be done by redesigning streets to prioritize efficient movement of transit vehicles and reimagining streets as places for people of all ages and abilities. Examples of this include transit-only lanes, protected bikeways, HOV/carpool lanes, shared spaces, car-free roads in parks, and slow streets.” - SF 2021 Climate Action Plan
• Other agencies have incorporated the goal into their own plans… see MTA’s Strategic Plan and SFCTA’s SFTP2050
• A shift of this magnitude would require overwhelming support from a supermajority of residents due to the significant imposition on daily routines

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https://www.sfmta.com/about-us/sustainability-and-climate-action/climate-goals-targets-and-trends

https://www.sfcta.org/policies/climate-action

https://www.sfenvironment.org/climateplan

https://www.sfcta.org/sites/default/files/2023-01/SFCTA_SFTP-2050-Report-FINAL_2022-12-13_0.pdf

https://www.sfmta.com/blog/moving-towards-san-franciscos-transportation-future

https://www.sfmta.com/reports/sfmta-strategic-plan-2021-2024

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Note that the CAP is currently being updated by the SF Department of the Environment; if you want your views represented, get involved now, starting with reviewing the draft and expressing your opinions through the online survey:

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https://www.sfenvironment.org/CAP-2025

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SFMTA Strategy: �Peer Benchmarks

• San Francisco has one of the highest percentages of commuters using public transit today and one of the lowest commuting solo by car

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• Benchmarking suggests little room for further modal shifts
• NYC is structurally unique among transit systems due to its high density and more consolidated operations… subterranean lines provide a viable alternative to surface streets

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• SF has already reached the reasonably achievable frontier… we should celebrate the progress rather than self-flagellating

The Competition: TNCs

• By 2018, the #1 alternative among riders to Muni was ridesharing… 44% of the time and growing as shown in Exhibit 2.6
• MTA no longer publishes this data? The question appears to no longer be asked in its surveys

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• Muni is structurally/physically unable to address the 3 reasons that comprise 86% of rider preference for TNCs (Exhibit 2.7)
• Faster/direct
• Don’t have time to wait
• Door-to-door service
• Though perhaps can be partially mitigated with improvements to headway consistency and more ETA transparency?

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• Rideshare impact likely permanent and unavoidable… and appeals more to fare-payors than subsidized riders
• Critically important that MTA undertake a realistic fact-based strategy review looking 10-20 year out… what portion of today’s fixed route infrastructure will be relevant and not cost-prohibitive given current trends?

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MTA’s Activities

• MTA basically does three things
• Operates a transit system ($770M)
• Changes, but does not maintain, the city’s streets and sidewalks ($240M)
• Spends a lot of time “administering” ($240+160M based on historical accounting)

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• After discussing this topic with MTA leadership, these numbers were subsequently reallocated to reduce Admin and AW, with commensurate increases to Transit

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If The Story Doesn’t Fit The Numbers…

• After meeting with senior MTA leadership to express concern about spending growth, especially in administration categories… several categories of spend were moved out of admin and into transit
• If Transit costs were in fact higher, it means operating comparisons are worse… can’t hide the excess cost by reclassifying it

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• This accounting change presumably impacts reporting accuracy to the National Transit Database and potentially future funding allocations?

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• Did past reporting meet required federal accuracy standards?

Budget Trends (Historical Accounting)

• MTA budget in current dollars up $370M versus 2010 (same population) and up $115M since 2018

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• Contribution from General Fund up by $262M since 2010 (infl-adj)
• Increased general fund contributions offset lower parking revenue ($172M) and transit revenue ($105M)
• Subsidizing riders with tax dollars and cannibalizing parking revenue with anti-car policies while suffering from WFH impacts
• GF amount adjusts up/down with overall fund and up-only ratchet with population growth as codified in the city charter (SEC. 8A.105)

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• Expense growth driven by labor and professional services
• Admin load is too high… transit has become inefficient
• CFO recently changed GL allocations… different conclusion now, or window dressing?

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• Improvement to Farebox Recovery could be a $200M+ opportunity if 2010 level re-achieved

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• Transit+Parking fell from 55% to 25%
• $130M opportunity from Parking as RTO takes hold

Result: Perpetual Structural Deficits

• With the expiration of short-term federal support, SFMTA is projecting $320M+ annual deficits starting in FY2027 (July 2026-June 2027)

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• General fund currently contributes $542M, or 38% of the MTA budget
• Relief through the ballot box in the form of additional subsidies is binary, uncertain, and not proximate… other holistic options needed, including near-term cost reductions

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• Potential solutions:
• Increase revenue:
• Improve fare structure/collection to 25% MUNI cost recovery ($65-130M?)
• Eventual increased ridership to 225M annual boardings ($55M?)
• Eventual increased parking revenue ($130M?)
• Additional subsidy dollars (federal/state/regional) (likely none)
• Increased contribution from the General Fund (none - broader city budget deficit)
• Ballot proposition(s) (uncertain and binary… other options needed)
• Decrease costs:
• Improve operating efficiencies across labor, prof svcs, etc. ($80-110M?)
• Service rationalization to match ridership trends ($?)
• The immediate spending reductions would be spread across Streets & Sidewalks (Vision Zero, etc.) ($115M?) and Admin Support ($125M?)… offset by increased spending for Transit as ridership recovers over time ($155M eventually?)

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YoY Cost Inflation Drives $85M of 2027 Deficit

• SFMTA is primarily focused on new sources of revenue

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• However, the $322M deficit includes $85M of cost increases FROM TODAY’S LEVELS

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• That equates to a 6% cost increase over 2026… should be managed flat to down in light of the pending deficit

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• CFO announced 5-7% cuts across the board Sep 2… $80-110M of savings if enacted

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SFMTA's Chief Financial Officer, Bree Mawhorter, said that stark reality means it's asking departments to cut 5% to 7% from their budget, possibly meaning less frequent deep cleanings among other impacts. 

- KTVU Sep 2, 2025

What Could MTA Look Like When Stabilized?

• If operated to the benchmarks in this presentation:
• Manage back to $4.15 cost per ride (2017 infl-adj cost)
• Re-attain 25% fare box recovery (2017 Muni benchmark)
• Run Streets at 2010 infl-adj levels
• Run Administrative Support, Agency Wide, and Taxi/Mobility at historical benchmarks

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• Would result in a pre-2027 general fund need of $391M at today’s ridership, which fits within the transfer requirements of the Transit Fund and builds a reserve for post-2027

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• Ridership recovery to 2019 levels of 225M annual boardings and recovering half the lost parking revenue from RTO would result in $145M additional revenue, which would result in post-2027 general fund need of $550M
• Fits within the Transit Fund math (req’d GF transfer)

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DIRECTIONAL

Headcount Reductions Need Not Impact Service

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• Vehicle Revenue Hours (VRH) down 5% since 2013… MUNI providing a little bit less service
• The number of transit operators is up 30% since 2010, and their cash compensation is up 46%, adjusted for Bay Area inflation
• As a result, the operator cost per VRH is up 53% to $64, while the average operator has gone from driving 1,684 hours per year to 1,237… (27%) fewer, while being paid 12% more, adjusted for inflation
• Setting TO employment using 2013 VRH per TO would result in headcount reduction of 700 and savings of $56M

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• “Service Critical” positions as defined in the Charter are estimated to represent $558M of MTA compensation, leaving $177M of residual “non-critical” headcount expense
• At a typical 39% benefits load, this represents a total of $246M

NB: low precision / medium confidence overall due to noisy data sets

SFMTA’s Workplan

• Expecting at least two ballot measures outlined in red (2026 and 2028) for $137-260M annually from sales/parcel taxes

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New Taxes – Current Status

• Mayor Lurie has proposed a new $85M parcel tax that would require 67% voter approval on the Nov 26 ballot (in process – testing receptiveness now)

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• Scott Weiner’s SB63 would increase SF sales tax from 8.625% to 9.625%, generating about $140M for SFMTA and would require 67% approval if placed on the ballot by the MTC or 51% if by a signature gathering campaign (Newsom has until Oct 12 to sign or veto… expected to sign)

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• The state may provide $750M of bridge funding until cash from these initiatives begins flowing in 2027 (in process)

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• Even if all are approved, SFMTA would still face a $100M annual deficit

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Subsequent Development: Budget Cuts Announced

• On Sep 2, 2025, SFMTA instructed all divisions to cut 5-7% of their budgets

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• With a total budget of $1.5B, this equates to $75-105M

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• MUNI is not including route or frequency reductions in this efforts
• Route and frequency adjustments should be a core function of SFMTA’s operating cadence, responding to evolving ridership trends

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• Department submissions are due Oct 10
• If all SFMTA departments comply, SFMTA would have a path to being fully funded, assuming both ballot propositions pass
• If one or both do not pass, additional cost cuts would be necessary, or the Mayor could reduce city spending elsewhere to make funds available
• See $16B annual city budget presentation (SF budget is almost 2x our city/county peers… sufficient funding already runs through the city to fully fund all basic needs; prioritization needed)

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Summary

IMPROVEMENTS TO POLICY, STRUCTURE, AND EFFICIENCY CAN MAKE MTA MORE EFFECTIVE, BETTER ALIGNED WITH EVERYDAY RESIDENTS, AND CLOSE THE DEFICIT WITH CURRENT FUNDING

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