Operating Subsidies in Urban Public Transit in Latin America: A Quick View

Operating subsidies to urban transit systems are ubiquitous in Latin America, and most systems lack transparency about them. In 2019, the level of subsidization ranged from 26 percent of transit systems' total operating expenditure to 69 percent. Although demand-side subsidies are better at targeting beneficiaries, most subsidies in the region are supply-side subsidies (subsidies provided to transit system operators). Both demand-side and supply-side subsidies may be needed to ensure that services are affordable, including to middle-income users. The restructuring of public transit subsidies provides an opportunity to improve the efficiency of transit systems and ensure that subsidies benefit those who need them most.