Freakonomics Quorum: Can Amtrak Ever Be Profitable?

Amtrak’s ridership and revenue has been steadily increasing over the last 10 years, and 2011 set a new ridership record with 30.2 million passengers, and $1.9 billion in ticket revenue. But, even though it took in $1.42 billion from Congress last year, it still manages to lose $1 billion annually. This is hardly a new development. Amtrak has a long and storied history of functioning at a loss despite government subsidies.

So, as we enter what appears to be a new era (maybe?) of government austerity, it seems worth asking if Amtrak can ever turn a profit without government help. We rounded up some people who pay attention to this issue and asked for their ideas to fix Amtrak, if it can be fixed at all.

Thanks to everyone in the Quorum for participating — and as always, let us know what you think in the comments section.

Eric Morris, a regular contributor to Freakonomics, is a transportation scholar at UCLA. His work focuses on transportation and well-being, transportation equity, transportation finance, and transportation history.

AMTRAK: OFF TRACK

I have a soft spot for the Zeppelin. This graceful ocean liner of the sky is quiet, clean, energy-efficient and—despite vicious Hindenburg-related media aspersions—safe. Whether providing us with spectacular aerial views of our favorite sporting events or bombing London, these delightful dirigibles have brought joy to millions. However, despite my personal love of the airship, I do not believe that government should be in the business of spending billions of dollars to support it when riders seem curiously indifferent to its merits. Supporting an unprofitable transportation mode because it’s “cool” is not a sound basis for public policy.

It is true that there are travelers out there who enjoy taking Amtrak. On rare occasions I have been one of them myself. However, society has no interest in paying for benefits—in terms of things like comfort, convenience or time savings—that are enjoyed by travelers. In our market system, which, recent speed bumps aside, is working quite well for us, the traveler himself should pay for the benefits he receives. If government has to step in and pay to produce a product customers won’t pay for, it is a sign that the product isn’t a particularly good one and is destroying wealth and resources that could be more profitably deployed elsewhere.

Thus subsidies for Amtrak are justified only if they bring broader benefits to society. Do they? Are oil rig workers in Texas or accounts payable clerks in Tacoma somehow better off because Joe Biden enjoys taking Amtrak back and forth between Washington and Wilmington?

The answer is almost certainly that any purported societal benefits from Amtrak do not match its subsidies, or even come close. Rail backers make a big deal about how much road and airport congestion their pet mode is relieving. But traffic congestion, while a big problem inside cities, is rarely an issue on highways between them. As far as airport congestion goes, in my experience I have never been troubled by a shortage of suitable flights. (Anyway, a better solution to airport congestion would be to modernize our air traffic control system, which at the present time is using technology not much more advanced than the abacus and the astrolabe.) Also, it’s not as if Amtrak is truly absorbing a lot of traffic from the other modes. In most of the country—even where it does exist—Amtrak’s ridership is about as significant as a rounding error. Even in the Northeast corridor, the one place where it is truly a meaningful mode, it accounts for only about 6 percent of intercity trips (driving accounts for 89 percent).

Are there any other benefits to non-riders that make subsidy worthwhile? Probably the only substantial one might be environmental, in terms of air pollution and greenhouse gases. It is true that moving things along rails requires less energy than moving them along roads or through the air. However, in most of the country Amtrak runs diesel locomotives which aren’t much better than internal combustion or jet propulsion. In the Northeast Corridor service is electrified, which is better. But even pro-Amtrak calculations (see this) find the pollution benefits are nowhere near Amtrak’s subsidy. And in fact, intercity buses are probably much cleaner than trains because the vehicles are lighter and generally travel filled closer to capacity.

Amtrak defenders like to make the argument that roads and air travel also receive subsidies. Sometimes it’s claimed that the total of these modes’ subsidies and externalities are equal to those of Amtrak. But my reading of the numbers is that this is questionable, and even if it were true it is a pretty weak argument. The fact that Fidel Castro is nicer than Kim Jong-Il is (or was) hardly a ringing endorsement for Cuban communism.

It isn’t hard to see what accounts for Amtrak’s failing to come anywhere close to covering its costs. Americans are not crying out in agony due to a lack of transportation options, and, simply put, passenger rail doesn’t have much to recommend it compared to the competition. On longer-distance trips, flight is vastly faster. The car isn’t much slower, is fairly inexpensive (particularly with multiple passengers, common on intercity trips), and provides far greater convenience, including door-to-door service and the use of a car when the traveler arrives at the destination. Intercity buses also aren’t much slower than Amtrak, are vastly cheaper, and aren’t that much less comfortable once they are on the highway. In terms of passenger transport, trains are a 19th century technology that we are attempting to apply to a 21st century problem.

Does this mean there is no room for rail in America? Far from it. Thanks to deregulation in 1976 and 1980, in the last few decades rail transport has been one of America’s great transportation success stories. However, this is when rail carries coal as opposed to commuters. Thanks to its characteristics (it is fairly slow and inconvenient but is energy-efficient and reasonably priced compared to trucks), rail is ideal for transporting many classes of freight, particularly cargoes that are heavy, low-value, and not particularly time-sensitive. Think bulk commodities like wheat, iron ore, or particularly coal. Passengers are light, high-value, and very time-sensitive, so it’s easy to see why rail isn’t right for them. Thus freight rail shipments have skyrocketed while passenger rail trips have stagnated. It is instructive that one of the first things the railways did after deregulation was dump unprofitable passenger service.

This is particularly important because freight and passenger rail transport do not go well together. Coordinating different types of trains traveling at considerably different speeds but sharing the same tracks is not particularly easy. This might be why Europe moves lots of people by train but the overwhelming share of its goods by truck, while in the U.S. the pattern is reversed. Perhaps it is impossible to make one rail infrastructure serve two masters effectively.

Harsh as it sounds, my answer to the question of how to keep Amtrak from losing money is to eliminate subsidies and perhaps privatize the operation. Highly uneconomical service in most of the country will vanish, but frankly there are few riders who will notice and even these have plenty of other transportation choices. It is possible that in the Northeast Corridor train travel could have a fighting shot at standing on its own two feet in some form. But if it can’t, and we decide cars, buses, and planes aren’t serving the corridor adequately, I’d suggest we give up on trains, fold Amtrak entirely, and introduce legislation to found AmZep instead.

Robert Puentes is a senior fellow with the Brookings Institution Metropolitan Policy Program where he also directs the Program’s Metropolitan Infrastructure Initiative. He is an expert on transportation and infrastructure, urban planning, growth management, suburban issues and housing.

In Washington and across the nation, there are ongoing deliberations about which transportation and infrastructure assists will drive the next American economy. A particularly noisy debate involves the future of the nation’s passenger railroad network and where, in what form, and who should make these investments. These and other discussions have once-again raised questions about America’s national passenger rail system—Amtrak—which has faced a tumultuous future ever since its creation in 1971.

Despite the haranguing, Amtrak continues to enjoy support from many in Congress and is carrying more passengers than ever. In fact, it experienced a significant jump in national ridership after 1997 when a bipartisan federal commission was established to make recommendations to help Amtrak reach operational self-sufficiency. Since then, Amtrak’s total boardings and alightings have increased 34.9 percent. To put this in perspective, it more than doubles population growth (14.6 percent) over the same period and exceeds real GDP growth (29.5 percent).

Part of the reason is that Amtrak’s growth mirrors the rise of America’s largest metropolitan areas, many of which are served quite well by rail. In fact, half of Amtrak’s ridership comes from just five large metros: New York, Washington, Philadelphia, Chicago, and Los Angeles. These places are generally well positioned geographically with good connectivity to other key metros. They are also home to the nation’s largest aviation delays and highway congestion with which travelers in these metros have to contend. Indeed, Amtrak says it has a whopping 62 percent of the air/rail market between New York and Washington, and 47 percent of the market share between Boston and New York.

Why does Amtrak work in these places? For one, research suggests that for intercity rail corridors to be successful they require competitive travel times especially compared to air travel. Amtrak has a built-in benefit in some metros by providing direct service close to the heart of cities and business districts whereas air travelers must contend with decentralized airport locations, security lines, and early gate arrival requirements. And in terms of length, research based on European results finds that the optimal distances for travelers to shift from air to rail is around 300 miles or so. (Washington to New York is about 250 miles.)

It is these and other short-haul routes — some of which are aided by state financial support – that are the engines of Amtrak ridership. Indeed, when only considering corridors of 400 miles or less these short-haul routes consistently generate over 80 percent of all Amtrak ridership.

This interactive map by Pew Chartiable Trust’s Subsidy Scope provides an excellent illustration of how short routes that serve major metros perform better than other routes. A few, like the Acela and Northeast Corridor trains, produce greater profits than losses (including costs such as depreciation) while the opposite is true for super long haul routes like the Sunset Limited.

Of course, the question of government subsidies to all modes (highway, air, transit, bicycle) is an ongoing and complex debate.  But as it relates to Amtrak it does seem clear that focus and prioritization on short-haul corridors that connect our nation’s major metros is critical to its long-term success.

 Yonah Freemark is a journalist who writes about urbanism and transportation. He founded and continues to publish The Transport Politic. He has contributed to Next American City, The Atlantic Cities, Dissent, and Planning.

Compared to the intercity railroads of virtually every other developed country — and even those of many developing countries — Amtrak under-performs. Its services are simply too slow, too expensive, and too unreliable to attract a significant share of travel in the United States.

Yet the alternatives being hammered out by opponents of the nation’s railroad, such as privatization and a reduction in government subsidies, are a collective non-starter. Experience abroad suggests that successful rail systems – in fact, most transportation systems – require significant government aid, especially when it comes to capital projects.

Assuming that we believe there is a public interest in maintaining a functioning mobility network, then, there is no alternative but to continue federal funding for transportation. Railways offer the potential for uncongested service, are ecologically responsible, and are beneficial to the central cities they serve; the same cannot be said of rival automobile and aviation systems, which are plagued by delays, pollute massively, and encourage suburban sprawl. Train links must form an important element of America’s future multi-modal transport network.The question is thus not whether to cut off subsidies to U.S. railway operations entirely, but rather whether to continue support for Amtrak or provide aid to private companies that could take over its physical assets in the Northeast Corridor and its operations throughout the country, as has been suggested by House Republicans over the past few months. The latter option was pioneered by the United Kingdom in the mid-1990s, but the results were hardly laudatory as services became increasingly unreliable. The British government responded with the re-nationalization of that country’s passenger rail infrastructure in 2002, placing it back within the European mainstream.

U.S. intercity railway operations are underused and underserved compared to their British counterparts, due to decades of disinvestment and an overwhelming – and destructive – emphasis on automobility and aviation. There is little reason to suspect that it would be in the nation’s interest to privatize the ownership of the railway infrastructure itself, since that has proven to be such a failure in similar conditions abroad. The American government, working with the states, must maintain ownership over the trackage.

But how about operations? In the U.K., passenger services are now provided by private companies. Yet on many corridors, operations are heavily subsidized by the public sector, and even some of the supposedly profitable lines have been abandoned by private operators, only to be served by a publicly owned holding company. Overall subsidies to passenger rail in Britain are far higher now than they were when the railways were run by the nationalized company, British Rail. It seems unlikely that the far less-used American intercity railway network — outside of the most-frequented segments of the Northeast Corridor — could be profitable for private enterprise; while subsidies to Amtrak may be unpalatable, subsidies to less accountable private companies seem even less desirable.Thus an improving American railway network requires a functioning Amtrak.

None of this is to suggest that Amtrak should not strive towards increasing speeds, decreasing fares, and improving reliability – far from it. The Obama Administration’s investments in intercity rail will bring faster and more dependable Amtrak services to states like Illinois, Michigan, and North Carolina within the next five years. Similar improvements over the past decade have led to dramatic increases in the company’s ridership along such routes as California’s Capitol Corridor and Pennsylvania’s Keystone Line. In addition, the national railway company must invest in increasing its capacity, a step it is already taking with new cars for regional services and its Acela trains on the Northeast Corridor. More room on trains will mean increasing efficiencies of scale, potentially lowering ticket prices for consumers. Finally, Amtrak must make an effort to reduce capital construction and operations costs, both of which are higher than those of similar railway companies overseas. Without this step, the country will continue to be saddled by railway operations that cost too much for an already overburdened government. The road ahead for American railroading will continue to be paved by subsidies. But the strong train system that will result if properly planned will be beneficial to riders and the nation as a whole.

Nate Berg is a journalist covering cities, the environment and urban planning. He has written for a variety of publications, including The New York Times, Wired, the LA Weekly, and many others. He is a staff writer at The Atlantic Cities blog.

In 2002, five years after Congress asked Amtrak to find a way to not require federal operating funds, David Gunn, five weeks fresh as Amtrak’s new president, flatly told a Senate committee what everybody already knew: “Amtrak will never be profitable.”

The passenger rail service, needless to say, did not meet its mandated goal of breaking free from government subsidies. This shouldn’t be a surprise. The vast majority of the world’s public transit systems rely on government subsidies. Though there are some passenger rail lines in Europe and Asia that can operate at a net profit largely without ongoing government support, train lines are more often government services than private businesses. To call on Amtrak to make money ignores the fact that it was created and still today operates as an infrastructural service. The real issue is not so much that Amtrak will never be profitable, but rather that it shouldn’t have to be.

Amtrak is infrastructure in the truest sense of the word. It’s one of the physical structures and services that organizationally enable the functioning of U.S. society. Like the interstate highway system or the postal service, Amtrak provides a service that (to an arguably lesser degree) serves and benefits residents and businesses. These services may not have direct dollar returns, but to say they don’t fill a vital need would be ignorant. Calling on Amtrak to go it alone prejudiciously holds the service to a different standard than other government services.

The return on investment for these services doesn’t have to be direct, and for transportation modes like passenger rail it often isn’t. Think of transportation as a line connecting two dots. The economic value of this connection is captured not by the transportation method itself, but by the people and places it connects. The value is in the dots, not the line. But without the line, the two (and in reality many) dots would have trouble sharing and compounding their relative economic powers.

These dots, the mid and endpoints of these transportation corridors, though, are not just single businesses or factories. They are cities, which are increasingly the centers and enablers of economic power. And while it’s true that Amtrak lines aren’t the only ways to get from one city to the next, they can play a valuable role in allowing people and services to travel between these economic centers in as many ways as possible.

In their new book Megapolitan America, Arthur C. Nelson and Robert E. Lang note that about 65 percent of the U.S. population lives within 23 clusters of metropolitan areas. This level of concentration shows the significance of cities, but also their interrelatedness. As groups of cities and their suburbs grow more populous, the physical transportation connections between them – highways, airports, Amtrak lines – become even more important. Rather than being seen as separate, Amtrak should be considered a part of the transportation network the government has enabled to connect these places.

Certainly Amtrak could be operated in a way that better met the needs of our increasingly mobile and interconnected society. But to single it out as a money hog amongst a broad swath of government-subsidized infrastructures and services is to turn a blind eye to the fact that the provision of such services, profit or no, allows the country’s economy to function.

Stephen Smith writes for Forbes on the politics, economics, and history of urbanism. He formerly wrote for the Market Urbanism blog, Reason, and the National Review.

In many ways, Amtrak’s problems are bigger than itself. They have their roots in one of America’s most enduring trends, which is population dispersal – whether it’s through westward state-funded canals and railroads of the early days of the republic, or twentieth century automobile-based suburban and exurban sprawl. For transit of any kind to be truly revived, land use patterns will have to be significantly altered, along with some of the most important tenets of American culture.

That said, the United States is taking tentative steps towards re-urbanization, and intercity travel is generally the most profitable kind of passenger rail (perhaps because there isn’t as much political pressure to keep cap fares). The consensus in the European Union and Japan is clearly in the direction of privatization. Even the privatization-averse Swiss Federal Railways aims for profits on its main intercity lines, while achieving remarkable gains in ridership over the past decade. Liberalization seems to be the future of intercity rail (to say nothing of the past), and there is no good reason that American politicians shouldn’t begin the process towards privatization now.

The process, however, will be a long one, with privatization being the end goal rather than the starting point. The first thing that must be done is not even management-related, but rather regulatory: the Federal Railroad Administration’s approach to rail safety must be radically restructured. The FRA can no longer be allowed to lag behind European and Asia regulators, foisting unrealistic and outdated safety mandates on all mainline passenger rolling stock in the US, from Amtrak trains to regional/commuter railroads. Our unique standards for bulk and other more technical aspects of rail car design should have been abandoned half a century ago.

America’s FRA-compliant obese mainline trains are slower, more expensive, and less reliable than modern European and Asian designs. Getting this right is the most important step in the whole process, partly because it will help “commuter” services like the Long Island Railroad and Caltrain. Good intracity mass transit links are a key to good intercity rail, and FRA regulations are more onerous for commuter railroads than they are for Amtrak.

Next, management must be given much more latitude when it comes to labor issues. They should be able and willing to negotiate (and risks strikes, if need be) over everything except wages and benefits, with the minor proviso that pensions may need to be reigned in. Managers must, however, be given control over work rules. A century ago, when railroading was a grueling and deadly profession, work rules were an essential negotiating point. But now they’re lucrative sources of indirect compensation, and ripe for featherbedding. There may come a point in the future when salaries and benefits should be negotiated down as well, but currently it’s a minor issue compared to work rule reform, and is not worth the political will it will take to tackle.

Once management is empowered to take control of the organization, we should expect a better financial position, and it will finally be time to begin thinking about privatization. The reason deregulation must come first is that if we were to privatize Amtrak first, as Rep. John Mica‘s plan earlier this year would have had us do, the privatized firm would just face the same difficulties that Amtrak’s predecessors faced before nationalization in 1971.

But even privatization is not a straightforward affair. The first decision to make is whether to go for the European model of forcibly separated infrastructure and operations, or to sell off the railroads as an integral unit, which is the path that Japan and the United States have historically taken. Unless the E.U.’s open access policies are wildly successful by the time deregulation is finished, it would probably be best to stick with the integral model.

But beyond that, we have to decide how to break up Amtrak. The Northeast Corridor is an obvious candidate for splitting off and selling, because it’s both the most profitable route, and the only one whose tracks Amtrak actually owns. The rest of the network will almost certainly need subsidies to survive, although popular routes like those in California should be further separated from inland services, so that in case they are seen as profitable in the future, they won’t be held back by the morbid routes away from the coasts and major cities. To what extent America outside of the Northeast gets subsidies is a political question, but it should be strictly segregated from the viable Northeast Corridor.

Leave A Comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.

 

COMMENTS: 86

View All Comments »
  1. Chris says:

    Mr Morris, do you also advocate eliminating the federal subsidies that make passenger air travel affordable/possible? In some cases these subsidies rise far about $1,000/ticket.

    Well-loved. Like or Dislike: Thumb up 54 Thumb down 9
    • Mike B says:

      Don’t forget that a few years ago Greyhound drastically cut back on many of its rural mid and far Western routes leaving many communities without any sort of common carrier transportation. An accessible transportation network provides a freedom of movement and opportunity that more than makes up for the modest investment involved.

      Well-loved. Like or Dislike: Thumb up 33 Thumb down 11
      • human mathematics says:

        Greyhound partners with Jackson Lines to jointly cover the Western areas around me (southern South Dakota).

        Thumb up 4 Thumb down 1
    • RANDY says:

      You forgot to mention our roads and ports.

      Thumb up 1 Thumb down 2
  2. human mathematics says:

    I would have liked to hear more specifics about what privatization might look like, partial privatization experiences in other countries, etc.

    Too much obvious static analysis in my opinion. What are the options on the table — given the US’ massive investment — to reduce subsidy, auction off parts (who would be the buyers and what would they probably do with the rail?), and so on?

    Thumb up 6 Thumb down 2
    • Mike B says:

      Privatization would work like any other. Government provides the same subsidies, but instead of all of it being returned for public benefit, some is siphoned off for private gain. Duh.

      Well-loved. Like or Dislike: Thumb up 37 Thumb down 19
      • human mathematics says:

        Mike B, not every industry is reducible to the same one or two dimensions. That’s a classroom exercise, not public policy.

        Well-loved. Like or Dislike: Thumb up 13 Thumb down 8
    • Andrea says:

      Did you read Stephen Smith’s response? He directly addressed all of the areas you mentioned.

      Thumb up 2 Thumb down 3
  3. Mike B says:

    Why don’t you also ask when the nation’s highways will become profitable? Last I looked into it the Federal Government spent 20 billion dollars a year more on road operation and capitol projects than it collected in fuel taxes. Rail is the only mode of transportation in the United States where the operators are ultimately responsible for the construction and upkeep of the physical medium on which their vehicles travel. Airports, canals and highways are all publicly owned and maintained. How can one expect rail to possibly compete when the government heaps such large indirect subsidies on its competitors?

    Also for the record it should be known that most of Amtrak’s much maligned long distance service does not in fact lose money as is so often reported. Those trains cover their variable costs, but due to various budgeting rules Amtrak must “assign” portions of its overhead to each route thus creating a fictional loss. Cutting long distance trains may actually have the effect of widening revenue shortfalls as fixed overhead is covered by fewer lines.

    Well-loved. Like or Dislike: Thumb up 90 Thumb down 12
    • brent says:

      Assuming your $20 billions dollars is correct, which you do not source, the “huge” subsidy for roads can be eliminated by increasing gas taxes by $0.07/gallon. The US has consumed around 140 billion gallons of gas per year for many years now.

      http://americanfuels.blogspot.com/2011/02/2010-gasoline-consumption.html

      2010 – 3,297,528,000 barrels x 42 = 138,496,176,000 gallons
      2009 – 3,283,730,000 barrels x 42 = 137,916,660,000 gallons
      2008 – 3,290,057,000 barrels x 42 = 138,182,394,000 gallons
      2007 – 3,389,269,000 barrels x 42 = 142,349,298,000 gallons
      2006 – 3,377,174,000 barrels x 42 = 141,841,308,000 gallons
      2005 – 3,343,131,000 barrels x 42 = 140,411,502,000 gallons
      2004 – 3,332,579,000 barrels x 42 = 139,968,318,000 gallons
      2003 – 3,261,237,000 barrels x 42 = 136,971,954,000 gallons
      2002 – 3,229,459,000 barrels x 42 = 135,637,278,000 gallons

      Thumb up 8 Thumb down 6
      • onempo says:

        When talking about highway subsidies, people often focus solely on Federal highway expenditures, mostly funded by user fees, and don’t account for state and local roads that get funding from other sources.

        Subsidyscope (Pew Charitable Trust) reports that nearly half of highway construction & maintenance is not covered by user fees. In 2007, 51 percent of the nation’s $193 billion set aside for highway construction and maintenance was generated through user fees. The rest came from general revenue or bonding. So, the annual subsidy is much higher than $20 billion.

        Even the Pew study doesn’t take into account indirect highway expenditures from general funds like law enforcement and emergency services that could be quantified, and other costs borne by society that are not easily quantified.

        Well-loved. Like or Dislike: Thumb up 30 Thumb down 2
      • Mike B says:

        Well get back to me when they raise the gas tax by 7 cents. Keep in mind however that Amtrak has gotten about 20-30 billion in Subsidies over its entire 40 year existence. Roads have been getting about that much per year for at least the last 5 or so years.

        Well-loved. Like or Dislike: Thumb up 18 Thumb down 7
    • David says:

      The federal government is only one level of public funding for roads, there is also state, county & municipal.

      Roads don’t make money or else the road in front of your home would have gone bankrupt years ago!

      Thumb up 4 Thumb down 2
  4. human mathematics says:

    I also would have liked to see reference to the graveyard spiral. In domains where the public provides requisite goods alongside private enterprise, like the post or certain kinds of insurance, the public is often stuck serving the most expensive customers (USPS delivers to every house, every day; FedEx does not. Likewise, state governments insure the uninsurable with a super-expensive auto insu. plan). Is that what’s going on with rail?

    Well-loved. Like or Dislike: Thumb up 13 Thumb down 3
    • Mike B says:

      The most damaging scenario would be for Amtrak to provide “open network access” to private competitors. Amtrak doesn’t own much track outright except in the Northeast Corridor where it can use its monopoly to charge a premium price for its rail service (with limited commuter rail alternatives). Maintaining the Northeast Corridor is insanely expensive (last number I heard was $700 million dollars a year) and if a partial privatization scheme were enacted it would probably take the form of some train operating company paying Amtrak some regulated amount to run on the same route. Result would be the private competitor undercutting Amtrak’s fares and leaving Amtrak on the hook to maintain the corridor without the revenue it used to rely upon.

      This was generally the model in Europe where train operators are able to show a profit when the often Nationalized infrastructure companies loose billions of Euros a year. It’s basically the airline model of public airport ownership and private plane ownership, only rail lines cost a lot more to operate than airports. Without the route monopolies to subsidize universal service mandates it becomes another transfer of public resources to private gain.

      Well-loved. Like or Dislike: Thumb up 14 Thumb down 6
  5. assumo says:

    If the highways were privatized and every trip bore a toll, rail would be able to compete without subsidy.

    Well-loved. Like or Dislike: Thumb up 61 Thumb down 6
    • John B says:

      Hidden due to low comment rating. Click here to see.

      Disliked! Like or Dislike: Thumb up 18 Thumb down 23
      • Brad DFL says:

        Why not have publicly owned tolls? I think we should, the current Soviet style road rationing (as much as you can handle) is what causes shortages (congestion). We need to get rid the Socialistic status quo and move toward a market based system that bases road access on price.

        Hot debate. What do you think? Thumb up 11 Thumb down 10
      • Mike B says:

        The only privately operated toll road I am aware of is the Dulles Greenway that has been suffering from rent seeking behavior on the part of its operators resulting in under utilization of the new road as drivers stick with the free public alternatives.

        http://en.wikipedia.org/wiki/Dulles_Greenway#Dulles_Greenway

        Privately run transport infrastructure and universal service goals generally run at odd with eachother. Without strong regulation or outright public ownership the building patterns will not serve the broader needs of the community. For example in Philadelphia the railroads and transport companies would compete to serve wealthy areas, but completely neglect the poorer ones. This resulted in some parts of the region having duplicate rail services and others having none, hampering development efforts in the century since those original decisions were made.

        Basically if you want universal service your two options are to implement some sort of cross subsidization scheme with local monopolies or let the private sector cherry pick the profitable routes and directly subsudize the others. Frankly I find the former preferable to the latter.

        Well-loved. Like or Dislike: Thumb up 16 Thumb down 6
      • Andrea says:

        Mike,

        Most of the Italian Autrostrade is composed of privately operated toll roads.

        Thumb up 4 Thumb down 1
      • onempo says:

        Private toll highways are only practical for heavily traveled major arteries. Privatization of the state and local streets/roads (necessary feeders to the major arteries) would have few, if any, takers. Construction and maintenance of these roads would still need subsidies, and continue to strain government budgets.

        Thumb up 2 Thumb down 2
      • Chad says:

        Actually, almost all tollways were built with government money, financed with government-backed low-interest bonds, don’t pay property taxes, get a cut of the gas tax at their islands, charge monopoly rents at the islands, and benefit tremendously from any of a hundred subsidies to their automobile and truck driving customers. And of course, these tollways wouldn’t last for a minute if they didn’t have a heavily subsidized network of money-losing feeder roads.

        There are plenty of profitable train SYSTEMS all around the world. I take one to work every weekday. At best, only a handful of roads pay their own way.

        Thumb up 6 Thumb down 3
  6. Mark says:

    Regarding Morris’s aside about the air traffic control system… Although modernizing the technology would be a welcome development, the true bottleneck is runway capacity. We need concrete more than we need capacity in the air. Congestion is a problem on the airport grounds, not in the air between cities.

    Well-loved. Like or Dislike: Thumb up 19 Thumb down 2
    • ConcernedAboutWinnipeg says:

      Perhaps expanding inter-city rail capacity and frequency for shorter (50-500 mile) trips would be a better investment than expanding airport capacity. If shorter flights can shift to rail, then capacity can be opened up for longer haul flights.

      Well-loved. Like or Dislike: Thumb up 8 Thumb down 1
      • onempo says:

        Same goes for expanding highway capacity. Here in Delaware, we got a new major highway from I-95 to Dover in 1995. Only 16 years later, the northern end is at capacity. Now they’re proposing at least $100 million to add a lane. Fortunately, there are a few officials who can see this rinse-and-repeat can’t go on forever. They’re going to study the feasibility of running passenger rail downstate. We’ll see how far it gets.

        Thumb up 5 Thumb down 2
  7. human mathematics says:

    I find Stephen Smith’s comments the most relevant and specific. Although cleverness and lucidity are displayed by all.

    Thumb up 4 Thumb down 5
  8. Enter your name... says:

    If I were designing the transportation system from scratch, I’d replace all of the small airports with rail stations—and those rail stations would lead directly to major airports, which would stop wasting valuable landing slots for little turboprop commuter flights.

    It would make far more sense for the people in Cedar Rapids, Iowa to hop on a train for the 250 miles to Chicago or Minneapolis/St Paul than to build and maintain that little airport, which puts about two little planes an hour into the air during the day (and nothing before 7:00 a.m. or after 9:00 p.m.).

    I’d personally prefer train travel to air travel, except that if I’m traveling outside the range of the local bus/light rail range, it’s extremely unusual for me to need to travel less than 2,000 miles at a hop, and that would take a long time even on a high-speed express train. But if an air/rail combination was possible—the long leg on a big jet and everything else on rail—I’d choose that in a heartbeat.

    Well-loved. Like or Dislike: Thumb up 35 Thumb down 6
    • Jake says:

      As someone who lives in Cedar Rapids, IA. I agree with you 100%, with the provision that once I jump on the train in Cedar Rapids heading for Chicago or Des Moines, I don’t have to go through security checkpoints at the airport all over again. The nice thing about leaving from a small city is that there isn’t a huge swarm of people trying to get into the airport at once, so you don’t always need to show up 3 hours early for a flight.

      I’m pretty sure that something like you described exists in Germany between Stuttgart and Frankfurt, where you don’t even need to get your bags off the plane once you land in Frankfurt, you just jump on a train, and your bags follow you.

      Well-loved. Like or Dislike: Thumb up 14 Thumb down 1
      • Enter your name... says:

        I’ve heard that the same, sane system exists in a major Asian city. I can’t remember whether my friend said he encountered it in Hong Kong or Shanghai, but it sounded brilliant. You apparently go through security on the train itself, so your travel-to-the-airport time (which you’d have no matter what) doubles as your check-your-bags and go-through-security time.

        Thumb up 4 Thumb down 1
      • Cory says:

        When I was stationed in Northern Germany, it was similar with Bremen and Hamburg. Bremen had a small non airline airport, despite it being the size of Indiapolis(mid size city) but Hamburg(size of Detroit) had the large international airport and was only a 1 1/2 hour train trip away. Basically if you were only traveling to Berlin/Frankfurt you would take the train from Northern Germany due to be only 4-6 hour trips, But if going to Munich you would fly.(due to it being 14+ hours by train.

        Thumb up 1 Thumb down 0