Episode summary
How America Ended Up Paying So Much for Public Buses
Wall Street Week
· · Hosts: Chrystia Freeland, David Westin · Guests: Edward Glaeser
Summary
America’s bus system is carrying enormous demand—3.8 billion rides in 2024—but the episode argues that the bigger problem is how expensive it has become to buy buses in the first place. Edward Glaeser says the average electric bus in the US costs about $1.05 million, far above what comparable buses can cost abroad, and he argues that the country is “paying way, way too much” for vehicles that should benefit from scale and manufacturing efficiencies.
The discussion points to two main drivers of high prices: extreme customization and weak competition. Transit agencies often demand highly specific seats, engines, branding and other features, and Glaeser says roughly 70% of new buses in the data are unique. Deborah Johnson of Denver’s transit system says some tailoring is necessary for climate, geography and service needs, but she also argues agencies should be “procurement smart and not procurement first.”
Federal policy is part of the issue. Glaeser says Washington covers about 80% of bus costs, which dulls cost discipline and layers on rules like Buy America that limit foreign competition. He argues for a federal maximum price, more pooled purchasing, and a market that invites more manufacturers—ideally through US factories—to bring bus prices down.
Key takeaways
- Edward Glaeser says the average US electric bus costs about $1.05 million, while a Hyundai electric bus can cost about $350,000 before ADA adjustments.
- Glaeser argues that roughly 70% of new buses in the data are unique, showing how customization reduces scale economies and raises prices.
- Deborah Johnson says some bus customization is necessary for geography and operations, but agencies should be “procurement smart and not procurement first.”
- Paul Scoututellis says the industry has embraced standardization and pooled procurement to secure better prices and more reliable quality.
- Glaeser says federal funding pays for about 80% of bus costs, which weakens incentives to cut prices and makes innovation harder.
Notable quotes
“the future of American public transit should have a lot of buses in it. We're just paying way, way too much for our buses”
“So, the average electric bus in the US costs about $1.05 million. That is an astounding number”
“Precisely because we're finding roughly 70% of new buses in our data are literally unique in our data”
“I would say um we have to ensure that we are being procurement smart and not procurement first”
“US federal money pays for about 80% of uh the cost of buses bought for by uh local transit agencies”
How the episode opens
Buses are an incredibly important part of America's transit system. 3.8 billion bus rides occurred in 2024. Ed Glazer is an economics professor at Harvard and co-author of a paper on public buses for the Hutchkins Center at the Brookings Institution.
On average, that means the an American takes 10 bus rides a year. But of course, it's not like an average person does 10 rides. It's more that you know there are some people who take hundreds and hundreds of rides and some people who take none. But as much as people rely on public buses, there is room for improvement. New York City Mayor Zoran Mdani certainly thinks so.
We know that for so many New Yorkers, public transit is increasingly becoming out of reach. That is why at the heart of our campaign was a commitment to make the slowest buses in America fast and to make them free. And Harvard's Glazer agrees at least that we could do more with less when it comes to our public bus systems.
Lot to love about the bus and certainly it needs to be cheaper. How much you could do with more efficient use of the existing bus system in New York versus adding to the number of buses, I'm not sure. But in general, I think the future of American public transit should have a lot of buses in it.
We're just paying way, way too much for our buses. So, the average electric bus in the US costs about $1.05 million. That is an astounding number.
You can buy a perfectly nice 36- ft electric bus from Hyundai for $350,000. Right now, obviously, that wouldn't necessarily be compatible with the American uh Disability Act, but it just gives you an idea of just how expensive it is.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- public transit procurement
- federal funding rules
- market competition
- bus customization
- cost efficiency
Watch the episode
Watch “How America Ended Up Paying So Much for Public Buses” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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