[sustran] comments on profitability, subsidies, and more

[Wendell Cox]

Response to latest Eric Bruun posting by Wendell Cox

Thank you for your note...
>
>Wendell, sorry for overstating my case:
>
>Okay, perhaps "obsession" is too strong of a word.  What I was
>trying to characterize about your viewpoint, at least as I interpret 
>it, is that the primary test of whether an investment should be made 
>is whether the private sector can make a profit.  I get this impression
>because you seem to be most worried about the fact that the 
>public ends up making a capital investment in rail and does not recoup 
>it through the farebox, whereas bus investments could be self-supporting.
>Please correct me if this perception is wrong, because it is this to which
>I am reacting.

Your perception is wrong --- absolutely wrong (I am not criticizing you, I
am just surprised that anyone could get that impression). For me the
critical return on investment is not profits, it is incrreased transit usage.

I have no problem whatever with investing public money in transit, and am
not particularly bothered by the failure to recoup a monetary profit for
either public or private participants. My concern has only to do with making
the best investment once the policy decision to invest has been made. I do
not oppose transit subsidies, I oppose wasting them. I have argued agaiinst
increasing transit subsidies because we are using those we have so poorly,
but I have not argued that we should not be providing subsidies.

If we use subsidies effectively, we can maximize transit usage --- which it
seems to me is the very objective of public policy in transit. The US data
seems to indicate pretty strongly that the mere increase in transit service
levels is a very important factor in increasing transit ridership. Of
course, very few transit agencies are increasing transit services, but those
that are see more ridership.
>
>I stand by my analysis of the Seattle rail investment plan.
>As Tom Matoff, the director of the development of this plan, said, 
>the I-5 freeway that cuts through the city only carries 5 percent of 
>all trips in the region. Does this make it an unimportant road? This 
>rail line would have added desperately needed capacity in a couple of 
>very congested corridor, a fact which is hidden with total percentage of
>travel statistics.
>
We'll let history judge whether or not RTA's rail line will remove cars from
the road in any meaningful numbers. I suspect that, like in Portland and St.
Louis, traffic counts will show virtually no change in overall trends on the
adjacent freeways (Interstate 5).

>Moreover, the contribution it would have made is much more than
>the small percentage of motorized trips it will contribute to the region.
>If done correctly, that is, linked with land redevelopment, it will create
>parts of the region where there are more walking and bicycling trips
>as well as shorter trips.  It also creates aethetically more pleasing
>cities and a choice of lifestyle.  It is these effects which are not
>properly modeled or credited in most financial analyses.  It is a fact
>that cities that are built around rail networks have a higher mode
>split of pedestrians, and often bicycles, and lower energy consumption.

To some degree that is historical. It is doubtless true of New York, Boston,
and Philadelphia, where the cities did indeed grow up around rail networks.
Whether that can be achieved by superimposing rail on an already established
urban form is another matter. I know there is all sorts of anecdotal claims
out there with respect to what new rail has done to transform cities
(especially St. Louis and Portland), but significant and hard data is not
there. The fact is that Portland's work trip market share dropped by more
than 30 percent in the decade that its light rail line opened (1980s) --- it
even dropped in the central city. Atlanta dropped 35 percent during the same
decade, while MARTA's metro came on line. And today, transit's market share
is lower in the Washington DC area than before its metro opened.

I remain of the view that rail is unlikely to transform the American city.
There are two fundamental reasons --- first, there seems to be a general
preference on the part of a large number of people to live in less dense
surroundings (and I would offer the observation that the percentage of such
people among transport planners is lower than among the general population),
and second is what I believe to be the most important reason people fled the
US central city --- lack of percieved security. This latter factor is a very
serious barrier, and a few good years in crime reporting won't even begin to
solve that problem.
>            
>In fairness, I have to say that many of these potential benefits 
>have not been seen in the US, because of the common failure to link 
>rail project with land use.  The Orange Line of Washington DC's
>Metrorail is a good example. There are only park and ride lots
>along the outer part of the line --- there is very little pedestrian
>oriented development.  What's worse, the terminal of this line has
>swollen in demand because of the all the sprawl development even
>farther out that it has helped make more attractive. 
>
>I guess what I am trying to argue is to fix the bad parts of what
>we have done with rail investments, but not throw out the whole
>concept for the entire US.
>
I don't advocate throwing out the concept. I do advocate, however, objective
analyses of all alternatives. My view is that the alternatives analysis
process has routinely failed to consider high quality bus alternatives.

Best regards,
Wendell Cox 
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