A recent New York Times article notes that, since 1995, transit ridership in the U.S. has grown by 31 percent, outstripping both VMT and population. This is true even in cities that lack good transit systems. The growth is attributed to increasing numbers of baby boomer retirees riding transit, frustration with congested driving conditions, and increasing gas prices. The link between gas prices and transit use is discussed in this Atlantic Cities article.
The main problem is transit systems have become increasingly reliant on state and local tax revenues as the purchasing power of the federal fuel tax revenue dedicated to transit (2.86 cents/gallon) has shrunk in purchasing power over the years. With the current economic downturn funding from these sources has dropped dramatically at precisely the time when demand for transit is strongest. Now some of the nation’s largest transit systems, including Atlanta, Chicago, and New York, are increasing fares and slashing service despite gains in ridership.