Bloomberg News, or at least a writer named Stephen Smith, has discovered that the transit industry is gouging taxpayers with its schemes for high-cost rail transit and high-speed rail. Smith says there are two causes for this gouging.
First, “agencies canâ€™t keep their private contractors in check,” and instead hire “consultants who consultant with consultants and advisers who advise advisers.” This drives up the cost of planning and building rail lines. Second, antiquated labor practices drive up the cost of operating the trains.
Smith makes good points, but his implicit assumption, that fixing these problems would make passenger rail transportation economically feasible, is wrong. He cites several examples in Europe and Japan of “how it ought to be done,” but the fact is that European and Asian countries are wasting their money on rail transit as well.
He cites Spain as an example of a country that is building high-speed rail lines at a reasonable cost. But the fact is that all of Spain’s high-speed trains are carrying only a tiny fraction of the country’s passenger travel, and at great cost to taxpayers. In fact, the country’s heavy investments in high-speed trains has been cited as one of the reasons for its current economic woes. If high-speed trains really worked, they would generate new travel and new economic wealth. Instead, all they do is divert traffic from relatively profitable airlines and ground transport to unprofitable trains.
Smith cites the high projected cost of the California high-speed train as an example of the bad practices found in America. Yet even at the original cost estimate of about $10 billion, University of California researchers calculated that “high-speed rail would be Californiaâ€™s most expensive mode of intercity transportation.” Taking $30 billion off of the current projected cost of at least $98 billion, which Smith says could be done if European methods were followed, wouldn’t solve anything.
While labor costs are a huge problem for the nation’s transit industry, reducing those costs won’t make trains look any better, relative to buses, than they appear today. In almost everywhere in the United States outside of Manhattan, buses can move as many people as trains faster, more frequently, and far less expensively. Bus transit suffers from its own labor difficulties, and solving them for rail would also solve them for bus, making buses just as cheap, relative to the high cost of trains, as they are today.
Of course, focusing on buses vs. trains makes it appear that these are the two main choices for urban transit. In fact, outside of New York City and a handful of other places, bus and train transit together are practically irrelevant to American cities. Transit carries 32 percent of commuters in the New York urbanized area, but only 11 to 17 percent in Boston, Chicago, Philadelphia, San Francisco, and Washington urban areas, and less than 10 percent in all other urban areas. When all travel is counted, transit carries a little more than 10 percent in the New York urban area, 6 percent in the San Francisco urban area, 5 percent in Washington, 4 percent in Chicago, and less than 3 percent in every other urban area.
Merely reforming labor rules and contracting will not revolutionize transit or transport. Taxpayer gouging will end only after bigger changes are made, such as privatizing transit agencies. The real transport revolution will come with new technologies improving automobiles, the mode of choice for 85 percent of all of our travel.