Houston Strategies

Metro had been making steady progress reducing the average subsidy per boarding since 2021, the fiscal year with the worst impact of the Covid ridership collapse. Progress came to an end in its fiscal year 2025 report, which was posted on the Metro site on March 27. Ridership was up 3.7%, but operating expenses went up faster and fares collected had a small decrease.

The result: average subsidy per boarding increased from $12.75 (inflation-adjusted) in 2024 to $13.07 in 2025.

Below is the annual update of plots of Metro's performance. Inflation adjustments are done using the official consumer price index inflation calculator for September of each year, since fiscal years end on September 30. Inflation was 3.0% between September 2024 and September 2025.

Charts with the 2025 Annual Report Data

2025 ridership was 78.64 million boardings, up 3.7% from 75.86 million in 2024. Ridership is 12.6% below the pre-Covid 2019 ridership of 90 million, and 23.5% below the 2006 ridership peak of 102.8 million.

However, operating expense increased from $988.4 million in 2024 to $1076.3 million in 2025, up 8.9% for actual values and 5.7% adjusted for inflation. The MetroNow initiative, announced in February 2025 with a goal of improving safety, cleanliness and reliability, likely contributed to increased costs.

From the taxpayer perspective, the most important metric is subsidy per boarding, which should be as low as possible, keeping in mind that a transit roundtrip is two boardings. Average subsidy per boarding is calculated by dividing the operating loss ($1.0275 billion in 2025) by the total boardings (78,642,439 in 2025).

Since Covid struck in 2020, I've been saying that a reasonable goal is to get the average subsidy per boarding back to the 2019 pre-Covid level, which is $10.96 in 2025 dollars. Last year, with the subsidy at $12.75 (2025 dollars), I said that achieving this goal was "within reach". Unfortunately the trend of decreasing subsidy reversed, and the 2025 subsidy was $13.07, which is 2.5% above the 2024 value and 19.3% above the 2019 value.

Looking at the plot, the 2025 points suggest that the cost and subsidy per boarding have returned to the long-term increasing trend, which has caused the subsidy per boarding to increase from $5.05 in 2001 to $10.96 in 2019 and now $13.07 in 2025, which is an average $0.33 increase per year.

The next plot shows major budget items. Sales tax revenue reached a record $1.086 billion, which is also a record high on an inflation-adjusted basis. (2023 is second at $1.04 billion.)

A notable and welcome result in 2025 is infrastructure assistance, which was $326.9 million, 30.1% of sales tax revenue. The target percentage is 25%, but assistance was below 25% for the five years from 2020 to 2024, even with Metro receiving $715 million in Covid operating grants from the federal government during fiscal years 2020 and 2021.

Fare revenue decreased from $49.8 million to $48.8 million, an actual decrease of 2.1% and an inflation-adjusted decrease of 4.9%. The average fare collected per boarding dropped from 67.6 cents per boarding (inflation-adjusted) in 2024 to 62 cents per boarding in 2025, which is the lowest value in the 25 years of the plot and probably the lowest in Houston public transit history. The regular fare per boarding for local service is $1.25 and the discounted fare for students and seniors is $0.60 (park & ride service is much higher).

Average fare collected as a percentage of operating expense per boarding was 4.53% in 2025, down from 5.04% in 2024.

Metro's headcount continued an upward trend in 2025, rising from 4627 in 2024 to 4779. This is probably related to security and cleanliness efforts launched in 2025.

Metro's marketing expense was $14.2 million in 2025, down from $16.1 million ($16.6 million inflation-adjusted) in 2024.

Recent Monthly Ridership Data

This chart shows Metro's monthly ridership through the most recently available data, February 2026, showing the first five months of fiscal 2026. Light rail shows a noticable downward trend at the end of 2025, with February 2026 18% below February 2025. The sum of the monthly average weekday ridership in the first five months of the fiscal year is 1,207,076 in 2026 compared to 1,207,604 in 2025 - nearly perfectly flat. If Metro is going to acheive a ridership increase in 2026, it needs increased ridership in the next seven months, or increased weekend ridership.

Outlook

The large and easy ridership gains after the 50% ridership drop in 2021 appear to be over, with only a 3.7% ridership increase in 2025 and flat ridership so far in fiscal year 2026.

The trajectory of ridership suggests it could be years before 2019 ridership can be achieved, if ever. Peak ridership in 2006 was never equaled after the 2008 rececssion; we could be headed for a similar sitation after Covid. Ridership could get a boost from higher gasoline prices (in they persist), more return-to-office mandates and service improvements with MetroNow.

To reduce the average subsidy of $13.07 per boarding, we need a favorable combination of higher ridership, lower operational cost and better fare collection, although fares are a minimal factor. With ridership flat in the first five months of fiscal 2026, the best hope for a subsidy reduction in 2026 is reduced operational expense.