How America Ended Up Paying So Much for Public Buses

Speakers

Ed Glazer — Economics Professor, Harvard University

Deborah Johnson — Head of Transit System, Denver (RTD)

Paul Skoutelas — President and CEO, American Public Transportation Association (APTA)

Summary

The US pays significantly more for public buses ($1.05 million avg for electric) compared to international standards ($350k for a Hyundai electric bus).
A lack of competition (duopoly in US manufacturing) and excessive customization ("400 shades of white") drives these costs, unlike the automotive industry where quality-adjusted costs dropped 40% over 30 years.
Federal subsidies (covering 80% of costs) and "Buy American" regulations create a moral hazard, reducing the incentive for transit agencies to cut costs or standardize procurement.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
HYMTF	LONG	Ed Glazer Economics Professor, Harvard University	Glazer states, "The average electric bus in the US costs about $1.05 million... You can buy a perfectly nice 36-ft electric bus from Hyundai for $350,000." The price discrepancy is nearly 3x. As municipal budgets tighten and the "astounding" waste is exposed, there is immense pressure to either relax "Buy American" rules or for Hyundai to onshore manufacturing (which Skoutelas explicitly welcomes). Hyundai possesses a massive competitive pricing moat against US incumbents. LONG Hyundai as the superior efficiency play in the transit sector. "Buy American" regulations remain strict, preventing Hyundai from entering the US market despite the price advantage.	—
UBER /LYFT	LONG	Deborah Johnson Head of Transit System, Denver (RTD)	New York City Mayor (quoted) notes public transit is "increasingly becoming out of reach" and is the "slowest in America." Glazer notes we are paying "way, way too much." When public infrastructure becomes prohibitively expensive and inefficient (slow), consumer demand shifts to private substitutes. If cities cannot afford to expand bus fleets due to $1M+ price tags, ride-share networks absorb the excess demand for mobility. LONG UBER / LYFT as the private sector beneficiaries of public transit inefficiency. Cities successfully implement price caps or standardization, improving public transit competitiveness.	—
GM /TM	WATCH	Ed Glazer Economics Professor, Harvard University	Glazer contrasts the bus industry with the auto industry: "Between 1995 and 2025, the quality adjusted cost of a new car dropped by 40%... The miracles of low cost come from scale economies." The bus industry is broken because it ignores the manufacturing principles of GM and Toyota. If the bus market reforms toward standardization (as Johnson suggests), it either opens the door for these auto-giants to enter the market with their superior scale, or they serve as the benchmark for how manufacturing must evolve. WATCH for entry into the mass-transit hardware space or partnerships with transit agencies. They remain focused solely on consumer vehicles and ignore the B2G (Business to Government) market.	3:12