# Why can't transportation systems at least break even? **URL:** \ **Category:** The BBQ Pit\ **Created:** [December 27, 2004, 11:50pm UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841 "2004-12-27T23:50:26Z")\ **Posts on this page:** 19\ **Page:** 1
**Author:** ![danceswithcats](https://avatars.discourse-cdn.com/v4/letter/d/9e8a1a/32.png) [@danceswithcats](https://boards.straightdope.com/u/danceswithcats)\ **Post date:** [December 27, 2004, 11:50pm UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/1 "2004-12-27T23:50:26Z")
Some news articles of late cause me to wonder. SEPTA seems to regularly need some form of bailout by the Commonwealth, and IIRC, the Pittsburgh transit system is in similar straits. US Air is in deep doo-doo, and other airlines aren’t far behind. Time and again, they look to the state or federal government for assistance. Forgive me if this seems like a stupid question, but why can’t they charge what it costs to take a person from A to B with a modest profit to cover fluctuations in cash flow? Isn’t that a basic business model? Speaking as someone who hasn’t flown in ages, I fail to see why I should as a taxpayer be forced to subsidize transportation modes that I don’t use. The other taxpayers aren’t going to pony up to help me if I want to buy a new truck. Ditto for the guy who walks to work when he needs new shoes, and the bicycle messenger. SEPTA should run like any other business, e.g. charge rates to cover operating costs plus reserves for future needs, as should the airlines. ---
**Author:** ![Bearflag70](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@Bearflag70](https://boards.straightdope.com/u/Bearflag70)\ **Post date:** [December 28, 2004, 1:08am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/2 "2004-12-28T01:08:26Z")
Society benefits from getting people and things from A to B, and society should pay for it to some degree. By analogy, society benefits from an educated populace and should pay for public education regardless of whether a particular taxpayer is in school or has children in school. So, I don’t buy the idea that you shouldn’t be “forced to subsidize things you don’t use.” I don’t think a full user-pay system of public services would work. I don’t think that only parents with kids in school should foot the bill for the entire school, and I don’t think a national system of toll roads where the only direct users foot the entire bill for the roads would work very well either. Mass transit systems often disproportionately directly benefit those in lower socio-economic status, and hiking the fees to cover costs would harm the people who need mass transit the most. As far as mass transit benefitting the car-driving taxpayer, mass transit systems can also relieve traffic on government subsidized roads you use, improve the quality of the air you breathe, reduce lung diseases which takes stress off your government subsidized health system that you use, and help reduce dependence on foreign oil which arguably contributes to wars you pay for and helps preserve national parks you may enjoy and also pay for. Also, those who are more affluent benefit from having lesser paid workers maintain jobs in expensive cities even though they can’t afford to live in them. It allows them to get to and from work on time by using mass transit, which benefits everyone. Also, some people who make less money perhaps don’t have a car, yet they pay sales taxes and income taxes which go to pay for the government subsidized road system that you use and that they don’t use. Government subsidizes trains, planes, and automobiles, yet nobody seems to gripe about paying taxes to build and maintain highways, subsidize auto companies, or subsidize auto sales (e.g., tax breaks for SUV purchases). It always seems to be the urban mass transit systems taking the flak for receiving government subsidies. ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [December 28, 2004, 1:21am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/3 "2004-12-28T01:21:47Z")
Things make a profit because value is added to them. Take a tree trunk, cut it up into useful planks, and you’ve added value to it. Take a raw diamond, cut it properly, and you add value to it. Take a wholesale import of mundane cotton clothing, market it well, and you’ve added value. Passenger transport doesn’t do this. It’s infrastructure. Which is something that society creates, in order for the creation of value to be possible. The road system is heavily subsidised - but it enables courier firms to deliver packages, managers to get to meetings, etc etc. Very few transport systems of any kind can _truly_ exist in pure profit - and where they do, it’s often linking a city to e.g. an airport, once again tying into hidden subsidies. ---
**Author:** ![Airman\_Doors\_USAF](https://avatars.discourse-cdn.com/v4/letter/a/e36b37/32.png) [@Airman\_Doors\_USAF](https://boards.straightdope.com/u/Airman_Doors_USAF)\ **Post date:** [December 28, 2004, 1:31am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/4 "2004-12-28T01:31:16Z")
> [@Bearflag70](#): > > Government subsidizes trains, planes, and automobiles, yet nobody seems to gripe about paying taxes to build and maintain highways, subsidize auto companies, or subsidize auto sales (e.g., tax breaks for SUV purchases). It always seems to be the urban mass transit systems taking the flak for receiving government subsidies. Taking these one at a time: > [@](#): > > nobody seems to gripe about paying taxes to build and maintain highways Wrong. Read about the Big Dig for a prime example. > [@](#): > > subsidize auto companies Cite on an auto company being subsidized? If you’re going to say Chrysler in the 1980s, note that that was a loan guarantee, not a loan. Chrysler, to the best of my knowledge, never took a dime. If you’re going to claim that hybrid cars are subsidized, hell yes they are, because auto companies were never interested in building them and they’re losing propositions money-wise, so the government SHOULD subsidize them. > [@](#): > > subsidize auto sales (e.g., tax breaks for SUV purchases) That was never intended for consumers, that was always a subsidy for farmers who needed larger equipment that was taken advantage of that they wrote out of next year’s tax law. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [December 28, 2004, 1:43am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/5 "2004-12-28T01:43:47Z")
> [@GorillaMan](#): > > Passenger transport doesn’t do this. It’s infrastructure. Which is something that society creates, in order for the creation of value to be possible. The road system is heavily subsidised - but it enables courier firms to deliver packages, managers to get to meetings, etc etc. Very few transport systems of any kind can _truly_ exist in pure profit - and where they do, it’s often linking a city to e.g. an airport, once again tying into hidden subsidies. True to a point. But once the road, tracks, and airports are there, it seems like private enterprise should be able to make a reasonable business plan providing transit along those routes. The OP seems to inquiring as to why that’s not the case. ---
**Author:** ![danceswithcats](https://avatars.discourse-cdn.com/v4/letter/d/9e8a1a/32.png) [@danceswithcats](https://boards.straightdope.com/u/danceswithcats)\ **Post date:** [December 28, 2004, 1:44am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/6 "2004-12-28T01:44:26Z")
> [@GorillaMan](#): > > Things make a profit because value is added to them. Take a tree trunk, cut it up into useful planks, and you’ve added value to it. Take a raw diamond, cut it properly, and you add value to it. Take a wholesale import of mundane cotton clothing, market it well, and you’ve added value. > > Passenger transport doesn’t do this. It’s infrastructure. Which is something that society creates, in order for the creation of value to be possible. The road system is heavily subsidised - but it enables courier firms to deliver packages, managers to get to meetings, etc etc. Very few transport systems of any kind can _truly_ exist in pure profit - and where they do, it’s often linking a city to e.g. an airport, once again tying into hidden subsidies. I disagree, and offer as a model, the Pennsylvania Turnpike. Although originally funded by loans during the Roosevelt New Deal, those notes were repaid ahead of time, and the turnpike commission has been self-supporting since then. Don’t mistake my point-I’m wholly in support of road taxes to fund maintenance and improvements of the state and federal highway system-I should and do pay them either directly as a consumer of motor fuel, or indirectly as a consumer of goods transported using taxed fuels. It is the urban transportation authorities that draw my ire-never able to balance a budget-always running in the red. A comparison to public education is invalid **Bearflag70** inasmuch as everyone must by law attend public school (unless home schooled) and is therefore deriving the benefits of same. I have to factor in all costs of doing business including motor fuel charges, tolls, and the expense of owning and operating a motor vehicle as part of my business model. My argument is that if business x wants to locate where workers need to use mass transit, then pay them a wage such that they can absorb their own direct costs, as do I, and then the transit authority can operate in the black, instead of constantly suckling the governmental tit. ---
**Author:** ![Bearflag70](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@Bearflag70](https://boards.straightdope.com/u/Bearflag70)\ **Post date:** [December 28, 2004, 1:46am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/7 "2004-12-28T01:46:05Z")
I was thinking about Chrysler. Thanks for the info about Chrysler and the SUV tax thing, **Airman Doors**. Otherwise, I meant more precisely that, in my experience, people tend to gripe about mass transit systems much more than they gripe about highway systems generally, as a going concern, referring to the system as a whole moreso than a specific project. ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [December 28, 2004, 1:46am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/8 "2004-12-28T01:46:19Z")
Part of the problem may be that domestic carriers must compete against foreign carriers to some degree, and they all are heavily protected in their markets as a matter of course. Air travel is, in fact, the most regulated and protected (as well as often subsidized) mode of transportaion in the world. It also carries nearly half of the world’s goods by value, and international travellers, I hear. There isn’t true Free Trade in the US air industry, because it doesn’t exist anywhere else in the world’s aviation markets; and because air travel is so important to our economy, it’s too valuable to simply let major carriers sink when they can’t be profitable. If even Fair Trade existed worldwide in aviation, perhaps US carriers would do better in a more competative model, but I’ll be waiting for the pigs to grow wings first, thanks. ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [December 28, 2004, 1:51am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/9 "2004-12-28T01:51:33Z")
> [@Loopydude](#): > > Air travel is, in fact, the most regulated and protected (as well as often subsidized) mode of transportaion in the world. _American_ air travel, maybe. But European rail travel is far more regulated, far more subsidised, and in many cases state-owned. > [@](#): > > It also carries nearly half of the world’s goods by value Goods ‘by value’ needs elaboration - is that their value before or after being carted halfway around the world? ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [December 28, 2004, 1:52am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/10 "2004-12-28T01:52:35Z")
> [@GorillaMan](#): > > _American_ air travel, maybe Errr, I mean: _American_ air travel compared to other forms of travel _in America_ :smack: ---
**Author:** ![Bearflag70](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@Bearflag70](https://boards.straightdope.com/u/Bearflag70)\ **Post date:** [December 28, 2004, 1:56am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/11 "2004-12-28T01:56:13Z")
> [@danceswithcats](#): > > A comparison to public education is invalid **Bearflag70** inasmuch as everyone must by law attend public school (unless home schooled) and is therefore deriving the benefits of same. Not everyone is required to go to public school. They can go to private school, in which case, those students are not directly benefitting from public education. If everyone in my family went only to private schools since immigrating from Europe, I would still derive benefits from public ed, and would still expect to help pay for it through taxes. ---
**Author:** ![Berkut](https://avatars.discourse-cdn.com/v4/letter/b/a88e57/32.png) [@Berkut](https://boards.straightdope.com/u/Berkut)\ **Post date:** [December 28, 2004, 1:57am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/12 "2004-12-28T01:57:33Z")
> [@danceswithcats](#): > > A comparison to public education is invalid **Bearflag70** inasmuch as everyone must by law attend public school (unless home schooled) and is therefore deriving the benefits of same. I’m pretty sure you aren’t required by law to go to a public school. ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [December 28, 2004, 2:02am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/13 "2004-12-28T02:02:40Z")
> [@GorillaMan](#): > > _American_ air travel, maybe. But European rail travel is far more regulated, far more subsidised, and in many cases state-owned. I can’t really parse this statement. You seem to disagree with me that air travel is protected and regulated by pointing out that European air travel is very protected and regulated. I could be misreading, I dunno, but color me confused. > [@GorillaMan](#): > > Goods ‘by value’ needs elaboration - is that their value before or after being carted halfway around the world? I honestly don’t know, but it seems to me that the speed at which goods can be transported by air makes that service intrinsically valuable over rail and sea transportation. I can’t remember where I saw that figure, but I’ll try to find something. At any rate, it was part of an article in which the author argued there should be something like the WTO for aviation. ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [December 28, 2004, 2:10am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/14 "2004-12-28T02:10:40Z")
> [@Loopydude](#): > > I can’t really parse this statement. You seem to disagree with me that air travel is protected and regulated by pointing out that European air travel is very protected and regulated. I could be misreading, I dunno, but color me confused. Yes, sorry, I typed it all wrong: it was a response to your assertion that “Air travel is, in fact, the most regulated and protected (as well as often subsidized) mode of transportaion in the world”. Because it quite simply is not. ---
**Author:** ![Airman\_Doors\_USAF](https://avatars.discourse-cdn.com/v4/letter/a/e36b37/32.png) [@Airman\_Doors\_USAF](https://boards.straightdope.com/u/Airman_Doors_USAF)\ **Post date:** [December 28, 2004, 2:21am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/15 "2004-12-28T02:21:31Z")
> [@Bearflag70](#): > > I was thinking about Chrysler. Thanks for the info about Chrysler and the SUV tax thing, **Airman Doors**. . No problem. [Cite from Wikipedia](http://en.wikipedia.org/wiki/Chrysler) > [@](#): > > In desperation, the Chrysler Corporation on September 7, 1979 petitioned the United States government for $1 billion dollars in loan guarantees to avoid bankruptcy. At the same time, Lee Iacocca, a former Ford executive, was brought in to take the position of CEO, and proved a capable public spokesman for the firm. A somewhat reluctant Congress authorized the guarantees, prodded by Chrysler workers and dealers in every congressional district who feared the loss of their livelihoods. With such help and a few innovative cars (such as the K-car platform), especially the invention of the minivan concept, a market where Chrysler brands are still important, Chrysler avoided bankruptcy and slowly fought its way back up. By the early 1980s, the loans were being repaid at a brisk pace and new models based on the K-car platform were selling well. A joint venture with Mitsubishi called Diamond Star Motors strengthened the company’s hand in the small-car market. The acquisition of AMC by Chrysler in 1987, mostly for its Jeep brand, bolstered the firm further, although Chrysler was still the weakest of the Big Three American auto makers. ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [December 28, 2004, 2:26am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/16 "2004-12-28T02:26:38Z")
Actually, aren’t all international flight paths, as well as flights by foreign carriers within borers, agreed upon bilaterally in a manner that amounts to protectionism? That was my understanding of the arrangement. Domestic carriers in the US, for instance, get no such protection from each other; but they don’t have to fear so much from, say, Virgin Atlantic, or KLM. Anyhow, check out [this](http://www.fee.org/vnews.php?nid=5205). ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [December 28, 2004, 2:32am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/17 "2004-12-28T02:32:18Z")
> [@Loopydude](#): > > Actually, aren’t all international flight paths, as well as flights by foreign carriers within borers, agreed upon bilaterally in a manner that amounts to protectionism? Yes, it’s protectionism. But in free-trade areas such as the EU, any member country has equal rights - hence the Irish Ryanair being able to be dominant. And even the antiquated Heathrow cartel is being challenged in new ways, with both Continental and BMI working on routes from the US to (gasp) British cities that don’t being with ‘L’. Of course, you’re right, that on the larger scale things are still heavily restricted and controlled by politics. I still don’t see that it makes airlines more state-oriented or reliant than e.g. SNCF in France. ---
**Author:** ![Loopydude](https://avatars.discourse-cdn.com/v4/letter/l/e56c9b/32.png) [@Loopydude](https://boards.straightdope.com/u/Loopydude)\ **Post date:** [December 28, 2004, 2:47am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/18 "2004-12-28T02:47:24Z")
Well, I honestly don’t know that much about it, so I’ll defer to your greater knowledge on the subject. I guess that does leave me newly confused about airline failures, per the OP. ---
**Author:** ![JRDelirious](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jrdelirious/32/9531_2.png) [@JRDelirious](https://boards.straightdope.com/u/JRDelirious)\ **Post date:** [December 28, 2004, 3:37am UTC](https://boards.straightdope.com/t/why-cant-transportation-systems-at-least-break-even/281841/19 "2004-12-28T03:37:37Z")
OK, _urban_ public transportation (metros, buses) doesn’t break-even or make a profit because many of its routes are public-service routes, intrinsecally losers. The #3 line may have no commercial viability on a profit/cost analysis at the rates being charged; but without it, the people who live in Zotti Heights and Adams Green and don’t have their own car would be fucked, and if they could afford to pay true cost-of-transportation they would not be living in Zotti Heights or Adams Green.