With the increases in wages since the 1950s, labor costs have become the dominant portion of operating costs for transit agencies. Efforts to increase productivity of operating labor have been particularly successful on rail transit systems. For example, development of high-capacity articulated cars, provision of separated rights-of-way and introduction of self-service fare collection have resulted in an approximately 20-fold increase in productivity of light rail transit systems. The report shows that while the modern rail transit systems (e.g. Lindenwold Line, San Francisco BART, Atlanta's MARTA) have one-person train crews and thus very high productivity, most older streetcar, rapid transit and regional rail systems still have obsolete, inefficient labor practices. A systematic analysis of alternative ways of performing different duties shows that on many existing transit systems productivity of operating labor can be substantially increased through rather modest efforts. This has been illustrated in two actual cases. The greatest potential benefits from introduction of modern operating methods exist on regional rail systems. Existing rapid transit is another mode on which labor productivity can be substantially increased. Cooperation of labor unions should be obtained by retaining jobs through increased service frequency, or by passing on a portion of the savings to the operating employees in form of increased wages for increased duties.