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Automated transit passenger counters, or APCs, are electronic systems that maintain a count of passengers on board a transit vehicle (such as a bus or train). The Federal Transit Administration (FTA) requires ridership information to be reported to the National Transit Database (NTD) and accepts data from APCs, which it also inspects to ensure correct calibration. Without APCs, transit agencies must use manual schedule checkers, which generate estimated ridership data by manually counting the number of passengers on randomly selected trips and multiplying that figure by the number of trips in a given length of time (typically a month). Though the systems used for manual counts are usually carefully designed in order to minimize the effect of anomalous trips with unusually high or low numbers of passengers, they are nevertheless obviously less accurate than the true ridership counts provided by APCs. Further, APC counts are not distorted by transit agency actions that inadvertently distort manual counts. For instance, if a transit agency cancels an 11:30 bus because it has consistently low ridership, then by definition this will have little effect on the agency's monthly ridership totals; but using the manual method, it will have a significant effect on the count.

Accurate ridership counts are important for a number of reasons. Reporting to the National Transit Database is required as part of a larger group of data transit agencies are required to report to the FTA, including their compliance with the Americans with Disabilities Act and with the Title VI requirement to distribute transit services equitably. The information reported to the National Transit Database pertains mainly to ridership, financial information, and safety and security (notably reporting the number of accidents and crimes that occur). Reported ridership information includes unlinked passenger trips (UPTs), meaning each trip, defined as a passenger boarding, traveling, and then disembarking, regardless whether they then transfer to another route; total number of trips according to time of day; and total passenger miles, meaning how far passengers travel.

For their own purposes, transit agencies usually track more data than this, including the relative popularity of various routes, seasonal or other time-based factors that impact route popularity (such as the impact of Red Sox home games on Boston's Green Line subway route), the length and frequency of trip delays, the correlation of safety or security incidents to specific routes or times, the correlation between crimes committed on transit vehicles and the crowdedness of those vehicles, and the frequency with which buses or trains are full to capacity and are unable to let all passengers board, requiring some to wait for the next vehicle. But most of this information builds on the accurate ridership count that only APCs can provide.

The complete level of detail provided by APCs has not only made it easier for transit agencies to report their information to the NTD and improved the quality of federal information on transit use, it has also challenged many of the tenets of conventional wisdom that had guided the transportation industry in the past. For instance, it used to be held as true—and many still advocate this view—that increasing fares or reducing services will lead to declines in ridership. The available facts even appear to bear this out sometimes, when the sampling and manual count method is used for estimating ridership. In recent years, for instance, the cities of Sacramento, California; Los Angeles; and Chicago have all cut their services in response to the budget tightening following the 2008 financial crisis, as well as other factors. Opponents of the cuts predicted severe ridership decline.

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