West Germany is densely populated, averaging 245 inhabitants/km2, but varying widely between urban agglomerations and rural areas. Transport volume has increased by 40% since 1970, with virtually all growth due to private automobiles. Since 1981 public transit has been suffering from decreasing demand.A 1964 Expert's Report to the German federal government was the stimulus for initiating an effective funding mechanism for new public transit construction In 1965 Germany's first federated transit authority was founded for the region of Hamburg.Principal among the goals of any cooperative agreement among transit companies are improvements for the passengers and improvement of revenues for the companies To attain these ends, two distinct forms of transit aggrements have been developed in Germany: transit cooperative (Verkehrsgemeinschaft) and transit federation (Verkehrsverbund). The former is more suitable for smaller to medium-sized towns, while the latter is more suitable for larger cities. The two types are described in this article.German transit federations during the 1970s succeeded in significantly increasing ridership, while during the 1980s patronage has either remained steady or has declined. Yet transit federations showed much better perfomance than did public transit in general. In terms of costs and revenues, no public transit organization in Germany is able to break even; deficits vary between 42% and 55%. The author concludes, however, that hidden subsidies for automobile traffic are far higher, because of environmental damage and the high social cost of traffic accidents.