NAICS 485

Transit & Ground Passenger Transportation

NAICS 485: Transit and ground passenger transportation — public transit, school buses, IIJA funding, and fleet electrification.

Industry at a Glance

Sector-wide aggregates across all businesses classified under NAICS 485 (2017 classification frame). For specific sub-industries within this sector, see the individual reports below.

Employment
459K
US Census CBP · 2023 · NAICS 2017
Establishments
20K
US Census CBP · 2023 · NAICS 2017
Annual Payroll
$18.5B
US Census CBP · 2023 · NAICS 2017
Avg Annual Wage
$40,323
Derived from US Census CBP · 2023 · NAICS 2017
Market Size
$50.9B
US Census Economic Census · 2022 · NAICS 2017

Industry Overview

Transit and Ground Passenger Transportation (NAICS 485) covers passenger services provided by buses, rail transit, vanpools, paratransit vehicles, and charter/tour operators. The subsector spans public transit agencies, private school bus contractors, intercity bus carriers, and specialized transportation for elderly and disabled populations.

Public transit is dominated by large metropolitan agencies: the Metropolitan Transportation Authority (MTA) in New York, Chicago Transit Authority (CTA), Los Angeles Metro, Washington Metropolitan Area Transit Authority (WMATA), and the Massachusetts Bay Transportation Authority (MBTA). These agencies collectively operate thousands of buses and rail vehicles. Private-sector operators include First Student and National Express (school bus contracting), Greyhound and FlixBus (intercity bus), and charter operators.

The Federal Transit Administration (FTA) administers federal formula and competitive grant programs under the Infrastructure Investment and Jobs Act (IIJA), which authorized $89.9 billion for public transit through 2026. The Americans with Disabilities Act mandates paratransit services for riders who cannot use fixed-route systems. Labor relations are governed by Section 13(c) of the Federal Transit Act, which protects collective bargaining rights for transit workers receiving federal funding. Post-pandemic ridership recovery remains uneven — New York MTA bus and subway ridership has recovered to roughly 70-80% of pre-COVID levels, while commuter rail recovery lags further due to hybrid work patterns.

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Industry Trends

FTA

FTA's Low or No Emission Vehicle Program under the IIJA is funding electric bus procurement at transit agencies nationwide, with New Flyer, Proterra (acquired by Phoenix Motorcars after bankruptcy), and BYD competing for orders.

WMATA

Hybrid work patterns are structurally reducing peak commuter rail ridership at agencies like WMATA and MBTA, forcing service redesigns that shift resources toward all-day frequency on high-demand corridors.

03

Transit agencies in Los Angeles, Houston, and Columbus have restructured bus networks around high-frequency grid patterns rather than radial commute-focused routes, improving off-peak connectivity and ridership.

04

Driver shortages are constraining service levels at transit agencies and school bus contractors nationwide, with First Student and National Express raising wages and offering signing bonuses to compete with warehouse and delivery employers.

MTA

Open-payment fare systems using contactless bank cards and mobile wallets — deployed at New York's MTA (OMNY) and Boston's MBTA — are replacing legacy magnetic stripe and token systems, reducing fare collection costs.

Frequently Asked Questions

What is NAICS 485? ▾
NAICS 485 covers transit and ground passenger transportation — public bus and rail transit, intercity bus services, school transportation, charter and tour operations, and paratransit for elderly and disabled riders. The Federal Transit Administration oversees federal funding, while the ADA mandates accessible transit and complementary paratransit service.
How is federal transit funding structured under the IIJA? ▾
The Infrastructure Investment and Jobs Act (2021) authorized $89.9 billion for public transit through 2026, distributed through FTA formula grants (Section 5307 for urbanized areas, 5311 for rural), Capital Investment Grants for new rail and BRT projects, and competitive programs like Low or No Emission Vehicle grants. This represents approximately a 30% increase over prior authorization levels.
Why has post-pandemic ridership recovery been uneven? ▾
Bus ridership has recovered faster because it serves essential workers and lower-income riders with fewer remote work options. Commuter rail — historically oriented toward peak-hour office commuters — has recovered more slowly due to hybrid work. New York MTA subway ridership has reached roughly 75% of 2019 levels, while commuter rail systems like LIRR and Metro-North lag further.
What is driving the transition to electric buses? ▾
FTA's Low or No Emission Vehicle Program provides competitive grants for zero-emission bus purchases. California's Innovative Clean Transit regulation mandates all-electric bus fleets by 2040. Agencies value lower fuel and maintenance costs over the vehicle lifecycle, though higher upfront costs and charging infrastructure requirements remain barriers. New Flyer and BYD are leading manufacturers.
How do driver shortages affect transit service? ▾
Transit agencies and school bus contractors across the country have reduced service frequency, eliminated routes, and shortened operating hours due to inability to fill driver positions. Competition from Amazon, UPS, and warehouse employers offering comparable or higher wages without CDL requirements has intensified the challenge. Agencies are responding with wage increases, signing bonuses, and accelerated CDL training programs.

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