China's Metro Systems Raise Fares and Cut Service as Losses Strain Urban Transport

Foshan's financial gap brings cuts to daily journeys

Foshan Metro Group recorded operating revenue of 586 million yuan against costs of 2.689 billion yuan in 2024, finishing with a net loss of 178 million yuan even after government subsidies. Its response is now reaching passengers: dimmer stations, warmer train cars, fewer working escalators and earlier closing times.

As of August 4, 2025, metro operators across China are raising fares and reducing services as the property downturn weakens a funding model that helped build their networks. From Beijing and Shanghai to newer systems such as Foshan's, operators face declining revenues, rising costs and pressure to find other ways to pay their bills.

Foshan's measures are projected to save more than 10 million yuan a year. All its lines now close 30 minutes earlier than before, and intervals between trains have been permanently extended. Further reductions are possible if financial pressure continues.

The changes mark a shift for a sector that has been a symbol of China's urban modernization and economic dynamism for decades. Expanding a railway creates new connections, but every additional station and train also brings expenses that must be met year after year.

Passengers experience those financial decisions in practical ways. A longer wait can complicate a journey to work or school. An earlier final train reduces options for people travelling late. For households already facing inflation and economic uncertainty, higher fares add another expense to an essential routine.

China's difficulties have parallels abroad. Transport agencies in the United States and Canada are also confronting gaps between income and spending, while examples from Pakistan and Saudi Arabia show how political decisions and unusual travel demands shape the price and availability of public transport.

Why the property downturn matters to metro funding

Chinese metro systems have traditionally drawn money from three main sources: ticket sales, government subsidies and development of land around stations. Under the funding model often called land finance, a new rail connection could raise the value of nearby property, helping cities pay for infrastructure and support operations.

A station makes a neighbourhood easier to reach. When the surrounding land becomes more valuable, governments can use the returns associated with that increase to help fund the railway. The arrangement becomes harder to sustain when the property market cools and those expected returns weaken.

Hu Gang, president of the South China Urban Research Association, explained how the downturn is affecting this source of support:

In the past, the land appreciation effect around stations brought substantial returns. Governments used rising land values to fund operations. But with the real estate market in deep adjustment, this land-finance-driven subsidy model is under real pressure.

China's deepening real estate downturn therefore reaches beyond developers and homebuyers. It puts pressure on the resources cities have used to support public transport, just as metro operators need money to maintain increasingly extensive networks.

Government subsidies remain a critical source of support for most systems. Economic slowdowns and competing demands on public budgets make their availability and reliability less certain. Local policymakers must decide how much money to devote to transport alongside other needs, while operators must make their case for continued investment.

More track has not brought enough passengers

Foshan's metro network extends over 150 kilometres, yet it carries far fewer passengers per kilometre than neighbouring Guangzhou or Shenzhen. Its experience illustrates a central problem: the rapid expansion of rail networks has outpaced growth in ridership.

Passenger numbers per kilometre help explain why network size alone tells only part of the financial story. A longer railway needs trains, stations and daily operations across a greater distance. If too few people use those services, ticket income struggles to meet the expense.

Private car ownership and electric scooters have also eroded the metro's customer base. Riders have more ways to make a journey, increasing the pressure on rail operators to provide a service that remains convenient and affordable.

Foshan Metro Group's 2024 annual report puts the scale of its challenge into concrete figures. Revenue of 586 million yuan amounted to about 22% of reported costs of 2.689 billion yuan. Costs were roughly 4.6 times operating revenue, while subsidies still left the group with a net loss of 178 million yuan.

Fare revenue would need to rise several times over to cover operating costs in Foshan and many other cities facing similar conditions. Ticket sales are only one part of metro income, so the pressure extends to government support and revenue from property and commercial activity.

Many Chinese cities use fares based on distance, with prices ranging from 2 to 12 yuan. A passenger travelling farther pays more. Even where operators raise those prices, ticket sales alone cannot fill the gap left by declining subsidies and weaker real estate revenues.

How savings change the passenger experience

Foshan commuters have encountered stations with reduced lighting and train cars with less air conditioning as the operator cuts electricity use. Escalators have been shut off, operating hours shortened and waits between trains lengthened.

Foshan Metro Group describes the measures as part of an initiative to "reduce costs and increase efficiency." The projected savings of more than 10 million yuan annually show how many small operational changes can contribute to reducing expenditure.

Passengers pay for those savings through reduced comfort and convenience. A warmer carriage changes the experience of a journey, while an inactive escalator or an earlier closing time changes how someone moves through the network and plans a trip.

Other Chinese cities are also raising fares and reducing service frequency. Commuters have expressed frustration at paying more while receiving less service, especially when household budgets are already under pressure.

The metro remains a lifeline for people travelling to work, school and essential services. Operators therefore face a difficult balance: cutting spending can help their accounts, while a less useful service can weaken the reason passengers choose the railway in the first place.

Transport specialists describe the danger as a "transit death spiral." Higher fares and fewer services can drive away riders. Fewer riders mean less revenue, which can lead to another round of fare increases and cuts. Similar cycles have been observed in other countries, making this a major concern for Chinese cities seeking accessible public transport.

Philadelphia's proposed cuts show the risk

The Southeastern Pennsylvania Transportation Authority, known as SEPTA, serves the Philadelphia region and faces a projected annual deficit of $240 million as federal pandemic assistance runs out. It has proposed a 21.5% fare increase and a 20% service reduction.

The proposed reductions include eliminating dozens of bus routes and running other services less frequently. Without additional state funding, further measures would include ending service on several regional rail lines and shutting down operations after 9 p.m. each night.

Scott Sauer, SEPTA's chief operating officer, described the situation in direct terms:

This is the beginning of what we have been saying is the transit death spiral.

SEPTA estimates that the cuts would cost it 350,000 daily trips across all its services. The consequences would reach beyond the authority's finances, affecting mobility, economic activity and quality of life throughout the region.

New York City's Metropolitan Transportation Authority, or MTA, has also experienced financial turmoil. Federal assistance and state funding temporarily held off fare increases and service cuts, but regular fare increases have resumed to maintain and improve service levels.

In August 2023, New York's base subway fare rose from $2.75 to $2.90, with similar increases for weekly and monthly passes. The MTA continues to warn of deficits if ridership fails to recover and new funding sources cannot be found.

Vancouver spreads the cost beyond ticket sales

Metro Vancouver's TransLink faced an annual operating deficit of $600 million starting in 2026. Its response combines higher fares, a property tax increase and provincial funding to avoid major service cuts.

The agreement includes a 5% fare increase in July 2026, a 0.5% property tax increase and $312 million in operating income from the provincial government over three years. The package will keep the system operating until at least 2027 and allow some service expansion.

TransLink's plan spreads the expense among passengers, property taxpayers and the provincial government. Officials acknowledge that it is a temporary arrangement rather than a permanent answer to the funding gap.

Denis Agar, executive director of the advocacy group Movement, described both the relief and the work still needed:

This is a Band-Aid that gets partway to a permanent solution. We hope a plan in 2026 will provide a permanent funding solution and improve transit enough to avoid overcrowding.

The dated developments show how these pressures extend across several years:

• August 2023: New York's base subway fare increased from $2.75 to $2.90.
• 2024: Foshan Metro Group recorded revenue of 586 million yuan, costs of 2.689 billion yuan and a net loss of 178 million yuan after subsidies.
• August 4, 2025: Chinese operators are confronting fare and service pressures, while SEPTA's proposed reductions depend on additional state funding.
• 2026: TransLink's projected annual operating deficit begins, and Movement hopes for a plan providing permanent funding.
• July 2026: TransLink's agreement schedules a 5% fare increase.
• 2027: TransLink's temporary funding package supports operations until at least this year.

Pakistan and Saudi Arabia show different priorities

Pakistan's Islamabad Metro Bus system faced public anger after a 100% fare increase. The increase was quickly rolled back following intervention by the prime minister, giving commuters relief from a doubling of their transport costs.

Maintaining service quality without sufficient revenue remained a concern. Suggestions included targeted subsidies, which direct financial help towards particular passengers or needs, and gradual fare increases that spread the adjustment over time.

Saudi Arabia's Mecca Metro serves a different purpose. It operates primarily during the annual Hajj pilgrimage, handling millions of passengers in extreme conditions. The system is heavily subsidized and designed around exceptional peaks in demand.

Islamabad and Mecca illustrate why transit funding cannot be reduced to a single formula. One faces public resistance to a sharp price increase on a regular transport service. The other receives substantial support to meet the concentrated travel needs of a major religious gathering.

Across countries, declining ridership, rising costs and uncertain funding have put transport agencies under pressure. The COVID-19 pandemic accelerated many of these trends as remote work and changing travel patterns caused sharp falls in passenger numbers.

What other Chinese cities earn beyond fares

Shenzhen and Chengdu provide examples of a broader income base. Commercial activity and developments integrated with transport contribute 30% to 50% of metro income in those cities, helping offset shortfalls in fare revenue.

Foshan has not yet diversified its income streams in the same way. That leaves it more exposed to changes in passenger numbers and government support, particularly while the property market is under pressure.

Commercial development, advertising and partnerships between public bodies and private businesses are among the approaches proposed to widen metro revenues. These can provide money beyond the ticket gate, reducing dependence on any single source.

Public transport also serves purposes wider than earning income. It supports economic activity, environmental sustainability and access to jobs and services. Governments must weigh those benefits when deciding how much financial support to provide and which services to preserve.

Hu Gang urged metro systems to learn from other cities and seek additional sources of income:

It's essential for metro systems to learn from the experience of other cities and explore diversified business models to identify new growth areas under today's changing circumstances.

What operators are exploring next

Metro operators in China and elsewhere are exploring business models and technologies intended to improve efficiency and attract passengers. Their options address both sides of the financial problem: generating more income and making the service more useful to riders.

The approaches under consideration include:

• Dynamic pricing and fare capping to make transport more affordable for frequent users. Dynamic pricing varies charges, while fare capping limits what a passenger pays over a set period.
• Connections with bike sharing and electric scooters to make journeys involving different forms of transport easier.
• Commercial development around stations to create additional revenue.
• Digital ticketing and information about services as they run to improve the passenger experience.

Chinese operators must also make decisions about fares, service levels and investment priorities. No date has been given for further reductions in Foshan. The possibility depends on whether its financial pressures persist.

The property market and government support will help determine what happens next. A more stable real estate market and continued public funding could give systems room to manage their losses. Continued pressure could push more cities towards the fare increases and service reductions seen in Foshan.

For passengers, the practical test is whether transport remains affordable, reliable and available when they need it. For operators, adaptation means finding revenue beyond fares, controlling costs and securing continued public investment without making the service less attractive to the people who sustain it.

The Bottom Line

• Chinese metro operators are raising fares and cutting services as financial losses, the property downturn and changing ridership strain their funding.
• Foshan Metro Group reported 586 million yuan in revenue against 2.689 billion yuan in costs for 2024, with a net loss of 178 million yuan after subsidies.
• Foshan's cuts include reduced lighting and air conditioning, inactive escalators, longer train intervals and closing 30 minutes earlier, with projected annual savings above 10 million yuan.
• SEPTA faces a projected annual deficit of $240 million and has proposed a 21.5% fare increase alongside a 20% service reduction.
• TransLink's temporary package combines fares, property taxes and provincial funding, including a 5% fare increase scheduled for July 2026.
• Commercial activity and developments integrated with transport provide 30% to 50% of metro income in Shenzhen and Chengdu.
• Operators face the risk that higher prices and less convenient services drive away passengers, reducing revenue and prompting further cuts.