I was reading the thread about why no-one builds subways anymore, and a big point made was about the cost - it’s expensive to build and maintain for the amount of business it creates.
Does this mean that subways NEVER make money? After the initial investment (which I imagine to be huge) and all the maintenance that would necessitate an underground rail system, is not enough money made by the companies to at least break even, sithout the help of hueg government subsidies?
I believe it inaccurate to say no one builds subways, as the initial thread notes.
In general public transportation like subways does not maximize its efficiency at prices that turn a profit. There are positive externalities associated with lower fares to attract higher ridership. I do recall that in NYC discount farecards introduction, however, got quite a large boost in ridership.
The DC area has had a subway system since the late 70s. I have heard that the city could’ve saved money by buying an economy car for every adult who has ever ridden it (While MD and VA kicked in some state funds, DC has no state to draw on). OTOH, having a Metro station in your neighborhood can reallly enhance the value of your property, so it may pay for itself over time in increased property taxes.
That kind of analysis is fairly bankrupt, insofar as it abstracts away from the obviously greater auto infrastructure - more roads, parking, congestion costs be they imputed or direct - that such a move would require, while not allowing for positive externalities from reduced auto traffic, etc.
All of Tokyo’s subways (and some of their above-ground commuter lines) are run by private companies (at least 4 different ones), and they all seem to be doing quite well. One new line opened two years ago, the line I ride was just extended by four stations this year, and another new line will open within the next few years.
One big difference between Tokyo and many cities in the US is population density outside of the main downtown area. There are enough people living within a fifteen-minute walking radius of the stations here that the trains get enough riders to make a profit, and there are stations close enough together that you can easily get almost anywhere in the city without a car. In the US, densities tend to drop off pretty quickly to the point where most people need a car anyway just to get to the station, and unless you’re arriving downtown, you’ll need a car again to get to where you’re going from the station. With this added hassle, many will opt to just take their cars instead.
In general, there’s a difference between publicly and privately owned transit systems. Where the rail lines are privately owned, such as in Tokyo, they will of course make a profit. Such is the nature of private business. If they didn’t, they wouldn’t be in business much longer.
Where the government owns the transit system, they’re usally run at some sort of a deficit. This is because governments generally recognize good public transit as a public benefit. They could increase the fares and find some break even point, but that would discourage people from using transit, and add more cars on the road, increasing traffic congestion. Plus, transit tends to have a positive impact on downtown commercial areas (people walking to/from transit tend to spend more in shops than people driving past at 50 mph), resulting in a more vibrant downtown, which benefits the city tax base and improves the area’s image. So, cities tend to have an incentive to lower transit fares to improve ridership, even if it means an operating loss.
These losses tend to be much bigger in the U.S. than they do in Europe and other more transit dependant areas, but they exist all over. The U.S. is largely now stuck in a place where they can’t reduce losses without cutting into the existing transit service, but they can’t do that because transit exists primarily to serve the poor in this country, and is operated (however inefficiently) as a social service. Simply put, to reduce deficits, you need more people to ride, but people won’t ride because they have cars and transit service tends to suck. But the service sucks because no one rides. It’s a catch-22.
How do you break the cycle? You have to increase densities. Transit can’t operate efficiently at current suburban densities, and consumers won’t chose what is clearly an inferior product. If you want people to use transit, they’ve got to find it more convenient than using their car. But they probably won’t do so as long as most people live in sprawling suburban developments. Comprehensive suburban transit doesn’t work. That’s why deficits are so high in the U.S.
masafer-
“These losses tend to be much bigger in the U.S. than they do in Europe and other more transit dependant areas, but they exist all over.
…
How do you break the cycle? You have to increase densities.”
Agree with your points. I would add it might help if US gas prices approached those in Europe. Paying generally double for a fill up might convince more people to grab the bus.
I would also add another public benefit to transit is that it is more effecient to use the roadways predominatly for commercial traffic. Unloading supplies at a restaurant takes a big truck to go to specific place. Going to the dentist does not require an SUV to drop you at the front door.
I agree with Collounsbury in that I think there are alot of uncounted economic benefits to Subways. In DC in particular, a Metro system that was originally seen as primarily a way to revitalize and get around the city like New York’s system … turned into largely a way for folks to commute into the city.
In the Suburbs, many properly planned metro stops became destinations, rather than merely transit points. Mixed used sites of housing, entertainment and shopping. Really the tail (Metro Station) in many cases wagged the dog by becoming a “destination”. Some Stations that simply built parking agrages regret that now and see a wasted opportunity – & are trying to rectify the situation.
This can never be measured simply by saying MD, VA, DC’s subisdy to Metro is is X amount – because there is more to it than that.
If the most heavily used & extensive subway in the US (NYC) needs to subsidize itself to the tune of 100’s of millions of dollars p/yr I would say no subway in the US is self funding per se – but also that is not the proper measure.
Not likely. I live over here in Germany, and nobody slows down or takes the bus because gas is expensive. They bitch and moan and pay the price - and pressure the boss into giving them a raise so that they can pay for the latest gas tax hike.
Lots of people do take the bus or the train, but there are other factors that come into it.
Germans have a smaller view of the world than Americans do. A one hour commute to work really bugs a German if he has to drive. He’ll gladly spend two hours on the train (and bus) to avoid driving for one.
Another thing that really gets them is the insurance. Liability is required by law, and the insurance companies do their best to take advantage of that. Insurance payments hurt - and most folks don’t have a second car for that reason.
The third really big thing is the property taxes on vehicles. Those are painful, too, and keep a lot of people from owning a second car.
When you add in the fact that it is damned hard to do any work on your own car here, then you can see that there are plenty of reasons for Germans to take the bus or the train that have nothing to do with the gas prices. It is hard to do your own work here because of the difficulty of disposing of used oil, brake fluid, coolant, etc. You must pay to dispose of it, and it can be very inconvenient to get to a place that will take the stuff. Parts are expensive, too. The next time you bitch about high parts prices, consider that VW wanted nearly fifty bucks for a simple car antenna rod (just a simple rod, it isn’t even a telescoping one.)
Hong Kong’s MTR (Mass Transit Railway) was privately funded and built, and has been in profit (Google cache only) for several years.
Anecdotally, I must also say that it’s incredibly efficient, clean, and pleasant to use (though still not as nice as Singapore’s MRT).
Of course you are right Mort Furd, it’s overall convenience and cost that decides it. I still think double gas prices would influence the choice. YMMV.
I can’t say I completely agree with any of your points, but this one I simply do not understand: How does a lack of desire to commute by car translate into “a smaller view of the world” ?
FWIW, I sold my car on moving to Hamburg because driving in traffic is annoying, parking was a pain in the rearside and - wouldn’t you know it - the subway was fast, cheap, efficient and reliable. Given the choice of driving for thirty minutes in traffic and thirty minutes of reading the book of my choice in the subway, I sure as hell know what I prefer. I’m currently commuting in LA and that has certainly not changed my outlook on those priorities.
Very true, but here in DC my choice is to spend thirty minutes in traffic, or spend thirty minutes with my nose shoved into someone’s armpit without enough space to read (yes, I take the Red Line during rush hour). I think I know what I would prefer.
I think that population densities really is the most important factor. Subways really are pretty expensive to maintain and the only way to keep the costs reasonable is to have a large ridership that is really only available with a fairly centralized downtown area with a high population density in the city and the surrounding metro area.
One one point I don’t think is mentioned is that a train system must pay for the trains and all that goes along with that and the track maintance. While car owners get roads subisidized through taxes and they are not bearing the full cost.
This puts trains, especially subways with expensive underground tracks and union workers to maintain, at a severe disadvantage.