TfL finances rarely produce a calm conversation. Mention Tube fares and someone will post a chart showing London’s fares are higher than New York, Paris or Madrid. Someone will reply with a different chart - the one that shows London getting a much bigger share of its transport income from passengers than those cities - with the implication that London is being starved of subsidy. Someone else will say TfL is just too expensive to run.
That second chart is the one we want to look at. It is usually used as a subsidy argument. But it has a problem: it does not actually show subsidy. It shows fares versus everything else. And “everything else” is not one thing.
So we unpacked it. We split the non-fare bar in each city to see what is actually inside it, and then asked the question the chart never does: how much does it cost TfL to run the network in the first place?
“When the Government awarded TfL £2.2bn in vital investment, it made clear it expects TfL fares to rise by inflation plus one percent.”
Sadiq Khan, Mayor of London, statement on the 2026 TfL fares package (Mayor of London / Greater London Authority)
Where each row in the chart comes from
| City / row | Fare-share source | Bucket-split source | Year | Confidence |
|---|---|---|---|---|
| London 2019/20 | TfL Independent Review (Dec 2020), Fig 3.2 | TfL Independent Review / TfL accounts | 2019/20 | High |
| London 2026/27 | TfL Mayor’s Budget Submission 2026/27 | TfL Mayor’s Budget Submission 2026/27 | 2026/27 | High |
| Paris (IDFM) | TfL Independent Review (Dec 2020), Fig 3.2 | Île-de-France Mobilités financial material | Pre-pandemic | Medium |
| New York (MTA) | TfL Independent Review (Dec 2020), Fig 3.2 | MTA financial reports / NY State Comptroller summaries | Pre-pandemic | Medium |
| Hong Kong (MTR) | TfL Independent Review (Dec 2020), Fig 3.2 | MTR Corporation Annual Report | Pre-pandemic | Medium |
| Madrid (CRTM) | TfL Independent Review (Dec 2020), Fig 3.2 | CRTM annual report / budget | Pre-pandemic | Medium |
| Singapore (LTA) | TfL Independent Review (Dec 2020), Fig 3.2 | LTA Annual Report | Pre-pandemic | Low/medium |
This chart is useful, but only if it is labelled properly. The blue bar is passenger fares. The grey bar is not subsidy. It is everything that is not passenger fares. In some cities that means government grant. In others it means employer taxes, dedicated levies, tolls, commercial income, property income, or accounting structures that TfL does not have.
One thing genuinely jumps out: London is fare-heavy. Even after the current TfL figure has fallen from the old 72% pre-pandemic comparison to roughly 60%, London still relies more on fares than most of the peer systems in the chart. But the more important point is hidden in the grey bars. They are not the same thing. Calling all of them “subsidy” makes the comparison look cleaner than it is.
That is not a straw man: the 72% figure is repeatedly used in arguments about whether London gets enough public transport subsidy, including in London Assembly scrutiny on public transport subsidy and wider online debate.
What counts as subsidy, city by city
The chart in its usual form comes from the pandemic-era discussion about TfL funding. In 2019/20, the December 2020 Independent Review of TfL put fares at 72% of TfL revenue, compared with much lower shares in New York, Paris, Madrid, Hong Kong and Singapore. The broad point was correct: London depended on passengers more than its peers, and that dependence became a serious vulnerability when fares disappeared during Covid.
What it does not show, despite how it is often used, is that every other city simply gets more government subsidy. It shows fare dependence. The opposite of fares is not automatically subsidy. To see why, take each city in turn.
London
London is genuinely fare-heavy. In the Independent Review’s 2019/20 figure, TfL was shown at 72% fares. In TfL’s own current funding explanation, the figure is closer to 60% of operating income.
London’s non-fare funding is made up of:
- other operating income, including road-user charging, enforcement, advertising, commercial income, and property-related income
- retained business rates
- council tax precept
- capital grants, which should be treated separately from day-to-day fare subsidy
So London does receive public money. But its funding model still relies heavily on passengers, and more so than most of the cities in the chart.
Paris
Paris is often treated as a simple example of a more heavily subsidised transport system. But much of the Paris-region funding model is employer-funded, not just state-funded. The versement mobilité is a dedicated employer payroll tax, and employers also contribute to workers’ travel passes.
Paris passengers pay less directly at the fare gate partly because employers pay more of the transport bill.
New York
New York is not simply “more subsidised”. The MTA has a wider funding base, including payroll mobility tax, mortgage recording tax and sales-tax surcharges; bridge and tunnel toll revenue; and direct state and city support. Some of that is public subsidy. Much of it is hypothecated transport taxation or transport-user charging.
The point is that New York spreads the bill across taxes and tolls rather than just fares.
Hong Kong
Hong Kong is the weakest example in the subsidy argument. MTR’s low fare share does not mainly mean each journey is being subsidised by government. Its model includes property development, station commercial income, property rental, and international/property revenue.
That is a rail-plus-property business model, not a normal fare-versus-subsidy model. Treating MTR’s non-fare income as the same thing as a government grant is one of the chart’s biggest sleights of hand.
MTR says its “Rail plus Property” model uses value from property developments “to support railway operations” and bridge funding gaps for new infrastructure.
MTR Corporation, on its rail-plus-property model
Madrid
Madrid is closer to the model people often assume. CRTM’s non-fare funding includes regional, national, and city subsidy alongside fare revenue and a smaller commercial share.
So the chart is not meaningless. Some cities really do use direct public subsidy to hold fares down. Madrid is a defensible example.
Singapore
Singapore is also a stronger subsidy example, but the comparison is still institutionally messy. The state owns major assets and infrastructure, and under the bus contracting model the government retains fare revenue and pays operators to run services.
That makes the financial structure very different from TfL. The headline “low fare share” in Singapore reflects an institutional model where central government carries network capital and revenue risk by design, not just a more generous operating grant.
Pulled together, the chart is directionally useful but badly named. It proves London’s fare dependence. It does not prove that every other city simply gets more subsidy.
Where the money comes from
TfL’s 2026/27 Mayor’s Budget Submission puts passenger income at about £6.0bn. Other operating income is about £1.7bn. Places for London contributes separately (about £0.1bn), but is excluded from the chart below because it is a wholly owned commercial property subsidiary rather than a core operating-income line. TfL then has a financing requirement of about £2.5bn, funded mainly by retained business rates and the council tax precept. On that broader picture (operating income plus local revenue financing), fares are roughly 60%.
So TfL is not funded only by fares. Londoners support it through business rates and the council tax precept. Road-user charging, enforcement, commercial activity and property income also contribute. Government provides capital funding. But fares are still the largest single source of operating income, and the model leans on them more than most peer systems.
Maybe the bigger question is cost
A funding chart can tell us who pays the bill. It cannot tell us whether the bill is too high. To get at that, you need to look at what TfL spends, and on what.
TfL’s 2026/27 operating costs are about £9.0bn (Mayor’s Budget Submission 2026/27). The two largest service areas are buses, at just under £3.0bn, and London Underground, at about £2.4bn. Streets and other operations are around £1.2bn. Rail, Elizabeth line, Places for London and other categories make up the rest. That is the cost side. It does not prove the Tube is expensive to run on its own - the one piece of evidence on that question is the 2020 Independent Review’s per-km finding, which we come to below.
TfL itself identifies the cost pressures: inflation, pay, bus retendering, energy, utilities, London Living Wage assumptions, and investment programme costs. The Mayor’s Budget Submission flags staff-related costs as a major driver of London Underground cost increases, and bus cost increases as driven by tender prices from third-party operators. None of this is hidden. But it is rarely included when people post the subsidy chart.
Staff costs
Tube driver pay is not the whole story, but it is not irrelevant either. TfL FOIs put the 2024/25 Train Operator salary at £71,160 (TfL FOI response, 2024/25 Train Operator salary scale). Including pension contribution, limited overtime and employer National Insurance, TfL’s own FOI data puts the average Train Operator cost to TfL at about £93,500. With a 2023/24 average headcount of 3,388 (TfL FOI response, 2023/24 staff numbers), that implies an all-in cost of roughly £315m a year for this grade alone - though the cost figure and the headcount come from different reporting years.
That is not enough to explain a £9bn operating cost base. But it is large enough to matter, especially when combined with wider staffing costs, pensions, station staffing, maintenance staffing, control-room staff, management, contracted bus labour, and rail concession labour. Salaries and benefits were 23.4% of TfL costs in 2024/25, or 25.1% including non-permanent labour (TfL Annual Report 2024/25), before counting indirect labour costs inside bus contracts and rail concessions.
Staff costs are not the entire problem, but any serious claim about cheaper fares has to look at staffing levels, working hours, pensions, automation, rostering, productivity, and industrial relations.
TfL’s own budget identifies pay, bus retendering, energy, utilities, London Living Wage assumptions, and investment programme costs among the pressures on its 2026/27 budget. None of those is mysterious. They are written down. They just rarely get posted alongside the subsidy chart.
Pension reform
The December 2020 Independent Review of TfL was more direct on pensions than on pay. It described TfL’s pension model as expensive, unreformed, generous compared with reformed Network Rail and Civil Service schemes, and potentially capable of saving around £100m a year if modernised (Independent Review of TfL, pensions chapter). That is a concrete cost-reform area, not a culture-war slogan. It is also the kind of structural saving that gets quietly dropped from the public argument because it is harder to chant about than driver pay or subsidy.
Can automation solve this?
Driverless trains are not a near-term fare fix - retrofitting full automation onto old deep-level Tube lines is expensive, disruptive and technically difficult, as our analysis of when the Tube will be fully automated sets out. But future upgrades should still be judged partly by their effect on long-term operating cost. The question is not whether London can sack drivers tomorrow; it is whether new signalling, new trains, line upgrades and station design are being planned with labour productivity in mind.
Are London fares actually expensive?
The strong evidence is the December 2020 Independent Review of TfL, which found that London Underground and rail fares were 50% to 100% above an international standard measured by fare revenue per passenger kilometre (Independent Review of TfL, fares chapter). That matters because London is not just asking passengers to pay a high share of the bill. It is asking them to pay a high amount per kilometre.
The single-fare table below is illustrative only. Headline singles are not a like-for-like test, because ticketing systems, transfers, day and weekly caps, and pass products differ by city. They are useful for a quick orientation, not a verdict. Our Tube fares guide covers the international comparisons in more detail.
| City | Single fare (centre, peak) | Approx. GBP |
|---|---|---|
| London (Tube, Zone 1) | £3.10 | £3.10 |
| Berlin (AB single) | €4.00 | £3.40 |
| New York (Subway/local bus) | $3.00 | £2.35 |
| Paris (Metro/RER zone 1) | €2.55 | £2.15 |
| Madrid (Metro central) | €1.50 - 2.00 | £1.30 - 1.70 |
One thing the chart does not say: London Tube fares have not actually risen much in real terms. The Mayor’s 2016-21 fare freeze and a run of post-pandemic rises that mostly lagged inflation mean headline pay-as-you-go fares are broadly flat against inflation over the past decade. Our Tube fare tracker has the year-by-year picture. The complaint that fares keep going up is not really the issue. The level was already high before the freeze, and it is still high now.
The missing question: can TfL earn more, and cost less?
The subsidy debate usually jumps straight from “fares are high” to “government should pay more”. That may be part of the answer. It is not the only question.
A better question is whether TfL can capture more of the value its network creates before asking passengers or general taxpayers for more.
Hong Kong is the extreme example. MTR is often included in charts showing lower fare dependence, but much of the difference is not simple government subsidy. Its “rail plus property” model uses property development and commercial income to help support railway operations and new infrastructure. New York offers a different version of the same idea: the MTA-owned air rights above Hudson Yards were leased to Related Companies for around $1bn on a 99-year deal, with a working development built on a deck over active rail yards. Japan’s private railway groups, such as Tokyu, have long combined railways with real estate, retail and station-area development as a core part of their economics.
London is not starting from nothing. TfL is one of the capital’s largest landowners, and Places for London is already pursuing over-station and transport-linked development, including schemes at Bank, Paddington and Southwark. The Southwark over-station scheme alone includes hundreds of student homes, affordable homes, retail and public realm above a Tube station. That is exactly the kind of value-capture question London should be asking more aggressively.
Commercial routes worth pushing harder
- over-station development and air-rights deals around major stations
- depot and rail-yard deck-overs where engineering and planning allow
- station retail and advertising/digital-media concessions
- telecoms and fibre concessions (TfL’s 4G/5G rollout is already being delivered through a concession that pays TfL rather than costing it)
None of these is a magic replacement for fares. But they do make the international comparison less straightforward. In some systems, the money that shows up as “non-fare income” is not subsidy in the usual sense at all. It is revenue from property, station retail, commercial rights, development agreements, air rights, telecoms, advertising or other assets created by the transport network itself.
The verdict
The funding chart points at a real difference. London is fare-heavy, and London Tube fares are expensive. But the chart does not show a clean split between fares and subsidy: it bundles employer taxes in Paris, dedicated taxes and tolls in New York, property income in Hong Kong, and actual public subsidy in Madrid and Singapore. That changes the policy question. If fares are high, the answer is not automatically more subsidy. It may be revenue the network is capable of generating on its own, or simply a lower cost base.
The chart makes the debate look like a choice between higher fares and more taxpayer support. The harder question is whether TfL could capture more value from the network it creates, and whether the Tube could cost less to run.