# Why doesn't urban mass transit show stunning economies of scale? **URL:** \ **Category:** Factual Questions\ **Created:** [June 16, 2009, 8:27pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983 "2009-06-16T20:27:47Z")\ **Posts on this page:** 14\ **Page:** 2
**Author:** ![Quercus](https://avatars.discourse-cdn.com/v4/letter/q/7ab992/32.png) [@Quercus](https://boards.straightdope.com/u/Quercus)\ **Post date:** [June 17, 2009, 1:12pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/21 "2009-06-17T13:12:09Z")
> [@Huerta88](#): > > Others have done the “it depends what you want to count” as to hidden costs of the car. You can also play this game with public transit. Does amortizing the cost of (bonds for) building the network (rails, tunnels, etc.) get priced into Metro’s “operating budget,” or is it separately treated as a one-time capital expense? Who owns the engines/cars, and if it’s the Metro, are we including depreciation? Are some of the drivers/attendants/cleaners being accounted for under some City outsourcing program or municipal laborer line-item? For the Massachusetts Bay Transit Authority subway and bus all of the above are on the MBTA budget (I’m not sure about the commuter rail which is not completely owned and operated by the Authority). One of the biggest items on the budget is interest on bonds. Not only does the T not have city cleaners, the T has to pay for their own police. [QUOTE= suranyi] As far as I can recall (no cite, sorry), the only urban rail transit system in the world that pays for itself is the Hong Kong subway, and that is only because it was able to sell the air rights above its stations. [/QUOTE] But the point is that there is no urban road system in the world that pays for itself either. ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [June 17, 2009, 1:31pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/22 "2009-06-17T13:31:53Z")
> [@Hari\_Seldon](#): > > Around 1930, the presidents of the major transit companies in the US got together and designed a trollye car that they all agreed to use (it was called the PCC car, for something like Presidents conference commission) and they sold tens of thousands of them, if not hundreds of thousands. It wouldn’t surprise me at all if some of them are still in use in some third world country. Since then, most streetcar designs have been one-off with no economies of scale. Cars killed trolleys simply because people drove cars on the streets with the trolleys, making trolleys so slow to be useless (If a car got stalled on the trolley tracks, the trolley couldn’t go around it, while buses could). Most trolleys never made money, and one reason why NYC went to the subway (and El) was because they didn’t have to contend with traffic like trolleys did. The modern-day equivalent – light rail – works nicely when the trains aren’t running on city streets – the Balitmore light rail is great where the tracks are at a siding, but painfully slow where they have to share the road. > [@](#): > > One item not usually taken into account is all the real estate tax revenue lost when private land is converted into streets and highways. If the land hadn’t been converted into streets and highways, then the tax revenue on all the other properties would have dropped like a rock, since you couldn’t reach them. It would have been a net loss in revenues. For city streets, the claim is absurd on the face of it, but even suburban highways increased the value of land surrounding them – and thus the tax revenues – more than the loss of taxes on the highway (which generally were built in areas that did not bring in a lot of tax revenue, anyways). ---
**Author:** ![Iamametalrobot](https://avatars.discourse-cdn.com/v4/letter/i/e8c25b/32.png) [@Iamametalrobot](https://boards.straightdope.com/u/Iamametalrobot)\ **Post date:** [June 17, 2009, 2:27pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/23 "2009-06-17T14:27:17Z")
I would like to add another factor into the cost analysis here - in order to build a subway or light rail, you are probably going to needs a decent road system in the first place, in order to move in all the equipment, men, and materials needed. So the “true” cost of mass transit needs to factor in how much use they got out of these roads. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [June 17, 2009, 2:34pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/24 "2009-06-17T14:34:50Z")
> [@dtilque](#): > > Bit of a hijack here. Above are several quotes of what percentage of the operating costs are supported by fares for various cities. Is there a good online source for these figures for all US cities with transit systems? Or even just for the larger cities? I’ve tried to find such in the past, but google fu is weak… You pretty much have to look for it system by system. In [St. Louis](http://www.metrostlouis.org/crossroads/default.asp), it’s 20%. [Chicago METRA](http://metrarail.com/Budget/2009_P_BudgetBook.pdf)claims 55% but a look through their data suggests that “farebox revenue” is only about 2/3 of system revenue. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [June 17, 2009, 2:46pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/25 "2009-06-17T14:46:11Z")
> [@Iamametalrobot](#): > > I would like to add another factor into the cost analysis here - in order to build a subway or light rail, you are probably going to needs a decent road system in the first place, in order to move in all the equipment, men, and materials needed. So the “true” cost of mass transit needs to factor in how much use they got out of these roads. Only if you’re talking about replacing roads with mass transit entirely. ---
**Author:** ![BorgHunter](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@BorgHunter](https://boards.straightdope.com/u/BorgHunter)\ **Post date:** [June 17, 2009, 3:19pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/26 "2009-06-17T15:19:38Z")
> [@kunilou](#): > > [Chicago METRA](http://metrarail.com/Budget/2009_P_BudgetBook.pdf)claims 55% but a look through their data suggests that “farebox revenue” is only about 2/3 of system revenue. The three organizations under the RTA umbrella in Chicago (CTA, Metra, and Pace) are somewhat unique in that each is required to earn at least half of its operating budget through the farebox, by statute. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [June 17, 2009, 3:38pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/27 "2009-06-17T15:38:13Z")
> [@Quercus](#): > > For the Massachusetts Bay Transit Authority subway and bus all of the above are on the MBTA budget (I’m not sure about the commuter rail which is not completely owned and operated by the Authority). One of the biggest items on the budget is interest on bonds. Not only does the T not have city cleaners, the T has to pay for their own police. > But the point is that there is no urban road system in the world that pays for itself either. That’s absolutely right, and kind of my point: It’s useless to complain about passenger rail systems not making money from the fares they bring in, because they generally don’t anywhere in the world. They are a subsidized transportation network, just like roads. ---
**Author:** ![Swallowed\_My\_Cellphone](https://avatars.discourse-cdn.com/v4/letter/s/9d8465/32.png) [@Swallowed\_My\_Cellphone](https://boards.straightdope.com/u/Swallowed_My_Cellphone)\ **Post date:** [June 17, 2009, 6:18pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/28 "2009-06-17T18:18:06Z")
> [@Spectre\_of\_Pithecanthropus](#): > > But how could buses, with each having its own engine, tires, and a plethora of wearable parts, be cheaper to operate than an electrically operated trolley that runs on a track? The infrastructure costs are exhorbitant. Toronto has streetcars. I hate them mainly because they are incredibly unreliable. One frozen switch so a single streetcar can’t turn, and the entire line is down until someone can _eventually_ fix it. The second reason (and actually more significant) I hate them is because they are accessible only to the able-bodied. Buses now have hydraulic lifts to accommodate wheelchairs, but streetcars? If you have mobility issues and perhaps need a walker, no streetcar for you! But the costs of the infrastructure here pisses me off to no end. I’m all for public transportation, in fact I’m a very vocal proponent of mass transit, walking, and anything that will get people out of cars. But they had to replace the streetcar lines near my street (unlike asphalt, they need concrete) and spent millions tearing up and relaying tracks. Two years later, they’re tearing them up _again!_ Each streetcar also has a plethora of wearable parts, just as bad as buses. The last time I took a streetcar the brakes froze when I was only a block from home so I walked the rest of the way to work. They pollute less, that deisel buses, and perhaps save on fuel costs, but I doubt they are actually less expensive to operate than a fleet of electric buses. The same money invested in subway maintenance would seem to go much farther. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [June 17, 2009, 7:54pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/29 "2009-06-17T19:54:17Z")
> [@Spectre\_of\_Pithecanthropus](#): > > But how could buses, with each having its own engine, tires, and a plethora of wearable parts, be cheaper to operate than an electrically operated trolley that runs on a track? In particular, how is it possible that buses are so much cheaper that it was cost-effective to dismantle the systems that were already there… The City of Toronto is currently in a long and complicated process of buying more streetcars. They’re incredibly expensive; I don’t know what it is about them but the numbers being bandied about are breathtaking. ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [June 17, 2009, 11:40pm UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/30 "2009-06-17T23:40:28Z")
> [@kunilou](#): > > In one word, flexibility. The buses might have had higher operating costs, but they could be shuffled around to wherever they were needed. Unlike a trolley system, a bus system doesn’t have to worry about acquiring and maintaining rights of way, doesn’t have to worry about population shifts away from its line, and if the street it’s running on gets closed for maintenance, it can shift the route over to a side street and continue running. > > Looking [here](http://www.bargainbusnews.com/transitbuses.php)I see that I can pick up a first-class used bus for less than $90,000. Let’s say that a brand new transit bus costs $180,000. > > And here it says that [Los Angeles’ Green Line cost $718 million](http://en.wikipedia.org/wiki/Metro_Green_Line_(LACMTA)) to build. So for the cost of one 20-mile section of light rail, I could buy about 3,989 brand new buses and run them anywhere I want. The Green Line is elevated and has a dedicated right of way, so it’s really more a rapid transit line than a streetcar. It’s really not a fair comparison. The Blue Line is like a streetcar in some places and like a rapid transit line in other stretches. The bus is cheaper to buy, but you are simply replacing the track maintenance expenses with road maintenance, which is usually done by another department, so the transit agency’s books look better. And for historically ancient bus routes the flexibility advantage is a canard, if that’s the word I’m thinking of. The MTA Wilshire bus line runs along Wilshire, it has always done so, and it always will do so. Who cares about flexibility in this case? If a streetcar is left in place, a transit company can still bring in buses temporarily to deal with repairs other problems. Or they should be able to; maybe one of the problems at the time was that various rules, union agreements, and other contracts made that impossible. I think your argument makes more sense for new bus routes to and within new population centers, but I’m not convinced that it justifies replacing old rail routes. ---
**Author:** ![runcible\_spoon](https://avatars.discourse-cdn.com/v4/letter/r/9fc29f/32.png) [@runcible\_spoon](https://boards.straightdope.com/u/runcible_spoon)\ **Post date:** [June 18, 2009, 12:01am UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/31 "2009-06-18T00:01:22Z")
> [@Spectre\_of\_Pithecanthropus](#): > > And for historically ancient bus routes the flexibility advantage is a canard, if that’s the word I’m thinking of. The MTA Wilshire bus line runs along Wilshire, it has always done so, and it always will do so. Who cares about flexibility in this case? If a streetcar is left in place, a transit company can still bring in buses temporarily to deal with repairs other problems. Or they should be able to; maybe one of the problems at the time was that various rules, union agreements, and other contracts made that impossible. To be fair, at least part of the flexibility a bus brings is in the fleet, rather than the routes. Once you’ve laid down rail, you’re stuck to buying trains that fit it. I don’t know how much that affects prices but I suspect that simply having a wider pool of suppliers could bring costs down. ---
**Author:** ![HorseloverFat](https://avatars.discourse-cdn.com/v4/letter/h/8e8cbc/32.png) [@HorseloverFat](https://boards.straightdope.com/u/HorseloverFat)\ **Post date:** [June 18, 2009, 12:06am UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/32 "2009-06-18T00:06:32Z")
Youre overestimating the demand here. Outside of rush hour 5 days a week and perhaps downtown routes on the weekend, public trans runs empty, yet youre still employing drivers, support personsel, security, paying insurance, gas, power, etc. Here in Chicago the trains and buses are practically empty outside of rush hour. Whatever big money is made between 8-9am and 5-6pm is lost during the rest of the day. The city wont let the CTA shut down 90% of the network during the off hours, so subsidization is the only way to go. This is generally true of most services or to be more accurate businesses that arent strictly manufacturing. Not to mention these services need to be egalitarian. You cant hire marketers to promote a luxury bus that charges 3x as much, but has leather seats and TVs. The city wouldnt allow it because its classist. But airplanes can do this with first class seating. A lot of businesses make their profit only with the premium level of their premium product and are willing to take a loss on their base products if need be. There really no room for this kind of multi-level pricing in transit. Lastly, they are forced to offer service in both the rich areas and the poor areas (or the dense areas and the sparse areas). So in your private business world you can choose to sell your widget or market it only to the big spenders. In transit you must market it to the lowest common denominator. Thats not the recipe for big profits. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [June 18, 2009, 12:34am UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/33 "2009-06-18T00:34:46Z")
> [@Spectre\_of\_Pithecanthropus](#): > > I think your argument makes more sense for new bus routes to and within new population centers, but I’m not convinced that it justifies replacing old rail routes. Not being familiar with the LA transit system, I simply used the first line I could find a cost for. You’re right, it’s a bad example. But you also make my argument. You have a streetcar system traveling on X number of routes. As the area grows, you want to add more routes, so you buy buses instead of laying more track. Eventually, your original streetcars wear out, the tracks need maintenace and population shifts and the move to automobiles have lowered ridership on the existing lines. So what do you do? I don’t know about Los Angeles, but if you’re the old St. Louis Public Service Company, you start replacing the streetcars with buses, pave over one set of tracks (Hodiamont) and use the right of way as a bus-only route, turn over several other rights-of-way (Ramona, Kirkwood, Yale) to their cities, who then build streets, and run your buses on those streets, and eventually sell off some of the more desirable parcels to private developers. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [June 18, 2009, 1:40am UTC](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983/34 "2009-06-18T01:40:36Z")
> [@Spectre\_of\_Pithecanthropus](#): > > The bus is cheaper to buy, but you are simply replacing the track maintenance expenses with road maintenance, which is usually done by another department, so the transit agency’s books look better. I guess it depends what streetcar system we’re discussing, but certainly in the case of Toronto, using streetcars requires huge amounts of track AND road maintenance. [Previous page](https://boards.straightdope.com/t/why-doesnt-urban-mass-transit-show-stunning-economies-of-scale/499983.md?page=1)