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Comment by tristanj | Hacker News Reader

The reason there's not more public transit is because the economics are terrible. Looking at the financials:

  Cost per passenger trip:
    BART: $1.07B operating expenses / 59.5M trips = $16.92
    SF Muni: $1.13B / 160M trips = $7.06
    Caltrain: $225M / 9.1M trips = $24.73

  Passenger Fare collected per trip:
    BART: $259M / 59.5M trips = $4.35
    SF Muni: $111M / 160M trips = $0.69
    Caltrain: $58.7M / 9.1M trips = $6.45

  Subsidy per trip:
    BART: $12.57
    SF Muni: $6.37
    Caltrain: $18.27

  Cost per passenger mile:
    BART: $1.07B / 892.5M passenger miles = $1.20/mile
    SF Muni: $1.13B / 312M = $3.62/mile
    Caltrain: $225M / 177.5M = $1.27/mile

  Subsidy per passenger mile:
    BART: $1.07B / 892.5M passenger miles = $0.84/mile
    SF Muni: $1.13B / 312M = $3.26/mile
    Caltrain: $225M / 177.5M = $0.94/mile

Every single ride requires a $6 to $18 subsidy, paid for by tax dollars.

For comparison, federal spending for the interstate highway system is about 2-3 cents per passenger mile.

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> The reason there's not more public transit is because the economics are terrible.

The reason we don't have roads is because the economics are terrible. The government gets $0 per trip [1], but it costs billions of dollars a year in operating expenses.

Wait, that's not how it works.

[1] Federal gas taxes don't count, because those go to the Highway Trust Fund which funds road construction, which is not an operating expense. State gas taxes may vary. Although toll roads also properly charge people user fees, although for some reason, lots of drivers complain about how expensive tolls are...

But you can't ignore the financials. SF Muni's $3.62 cost per passenger mile is atrocious. At that price point, it's cheaper to charter a helicopter. I'm not kidding. You could literally charter a 20-seat Airbus H175 helicopter to fly people around for $2.50 per passenger mile. And you'd get there faster.

If public transit is less cost-effective than taking a helicopter, then something is clearly broken.

Good luck scaling that “solution!”

Perhaps what’s broken is your financial analysis.

Please show his error.

The error is completely ignoring the negative economic externalities of NOT having public transportation and the positive economic and environmental externalities of having public transportation.

Doesn’t account for the cost of helicopter landing platforms at every station, for one. Or the cost of building additional helicopters to meet current BART scale, or the cost of the number of accidents you’d have once it scaled, or the cost of having all transit halt whenever there’s an air incident, or literally anything about reality. Like, are you people being serious or just smirking about your spherical helicopters?

His point was that Bart's current cost are HIGHER per passenger mile than the current cost of a helicopter, which is a notoriously expensive form of transportation (and also one of the most convenient).

Note that a 12 seat private jet also costs less per passenger mile than BART does. That's not beacuse jets are cheap, but because BART is currently absurdly expensive.

Is it just because of an artificial low denominator?

It's circular:

* Few take it because it doesn't meet their need [low denominator]

* Let's spend money to make it meet people's need [numerator goes up]

...

Of course, this is what happens when there's no profit motive. If we weren't making the marginal cost of using a road zero, and they had to compete with each other, and the people running transit wanted to make money rather than satisfy the requirements of a law, transit would be cheaper. That's how it is in all the places in the world where transit is really good.

Or it wouldn’t exist at all in in this form…

It would look like NYC or Tokyo. Both built privately.

NYC's subway system is an amalgamation of three systems, two of them built privately (but both of whom subsequently went bankrupt) and the third built by the city.

Of course they went bankrupt. We built free to use roads to compete with them.

They went bankrupt in part because although privately owned, they depended on a city charter to operate, and the City used that charter to force them to keep fares unsustainably low (I believe it was a nickel).

Same as Seattle! And thank god Japan and Hong Kong don't do that to theirs.

Dude. Public transit can carry hundreds of thousands (millions even). How many helicopters you planning on having? How many landing pads? Where are they going to go? You going to spin up a municipal ATC? This is silly.

I'm not advocating for helicopters at all - it's an analogy that clearly went over your head.

It's about cost comparison: SF Muni's operating costs (in terms of costs per passenger mile) are so bloated they're comparable to chartering a helicopter.

This should not be possible, and it's a strong signal of poor fiscal management. SF Muni operates at $3.62 per passenger mile. For comparison, Transport for London (TfL) operates at around $0.50/passenger mile and Shanghai Metro operates at $0.11/passenger mile.

Roads are fully paid for by road users (i.e. everyone).

Not really. That’s a tautology anyway.

huh? Public transportation is fully paid for by everyone too.

Yes, but most people don't use public transit.

> Federal gas taxes don't count, because those go to the Highway Trust Fund which funds road construction, which is not an operating expense.

Doesn't the Highway Trust Fund pay for road maintenance as well?

No.

The Highway Trust Fund pays primarily for highway capital expenditure projects. It's not just highway construction; things like replacing a bridge or widening a highway are also covered, but these are also capital expenses, not operational expenses. A portion of it goes to funding mass transit capital expenditures.

The economics of roads are actually pretty good which is why basically every country has them, even the poorest.

if they are, the equivalent effort of analysis done on public transit also doesnt show it.

instead you need to find the overall economic benefit and related government revenues from each transit trip, not just the cost of the trip alone

Infrastructure for cars is massively subsidised too. Since tansport is infrastructure it it interacts with everything else (eg less cars in the city => less spending on car infra) and has a lot of positive externalities. The investment pays back in positive outcomes which can also be quantified in terms of money of you like. It's like you've got a balance sheet but you're filtering it to only look at two items.

Additionally, the other poster failed to mention that the unit economics for the marginal rider are much more favorable.

Yes, but public transit does create value - the question is who captures it.

BART likely created huge profits for people who owned land in the areas it services - house prices and rents would have increased substantially. Public investment, private profits. Subsidies in the form of low-cost fares like this are just further welfare for the landowners.

Interestingly, about a third of BART's cost was acquiring land - if/when that same land is cleared and sold on market, the project would have operated at an enormous profit. Certainly, BART's current assets would far exceed 'total fares collected'.

> public transit does create value - the question is who captures it.

Overpaid transit employees, engineering firms, and construction companies.

That's a minuscule amount of the value it creates. And that's a problem, and a problem we can only fix by privatizing it. But most of the value it creates is for the landowners around it. And that's why successful transit companies are also real estate developers. Even in our own history, that's how private transit worked before we killed it.

Most of the value it creates is for the riders and the non-riders who don't have to deal with more congestion.

That's the value, but not what capture means. If you have to pay $50/week extra rent to get that benefit, then the true value was 'captured' by your landlord. If you owned your house before the trainline was built, you probably captured more of that value yourself.

>BART likely created huge profits for people who owned land in the areas it services

Unless you try to build housing.

https://reason.com/2018/02/21/san-francisco-man-has-spent-4-...

Looks like the address is 2918 mission, still no apartment complex there according to web maps, though the laundromat building is demolished it seems. So perhaps by 2034, a good 20 years since the start of the project.

Interesting story but it actually is an example of a landowner's massive windfall from the presence of public transport.

Tillman cites $1M of costs, of which $200k were 'city fees' (not itemized) and the rest were presumably normal costs for developers/engineers/architects/etc (of course, these would potentially be smaller if there was less regulation). The development start to approval time of 3.5 years is not crazy for a first time 'accidental developer' working on such a large project.

After approval, there seems to have been a~12 month period of bad faith activists slowing down the project. Tillman filed a lawsuit, did a media campaign, and the project was re-approved later in 2018.

He then sold the pre-approved project to a Cresleigh Homes for $13.5 million in early 2019.

So we've had 6 years of financial delays as Cresleigh tries to fund the build vs maybe 1 year of 'bad faith' development approval delays 2017-2018.

And of course - funding the build would have been much easier if the landowner didn't want $13.5 million for an empty lot! (or $12 million if you subtract the development costs). So arguably Tillman did more to delay housing than anyone else.

this is a great example of why we need to shift to land value / Georgist taxes everywhere

Cars are also subsidized (roads) - isn't that what taxes are for?

If we could go back to pre-pandemic ridership levels, the subsidy rate would be inverted (fares covered 70% versus 30% now). Public Transit struggles with low utilization. It'll take 10+ years to get back to that ridership level though.

Sure, but cars aren't subsidized at $18 dollars per trip. The cost to the government of providing and maintaining roads is on the order of several cents per vehicle mile traveled.

For BART, that number is:

$1.07B operating expense / 892.5M million passenger miles traveled = $1.20 per mile. Then subtract out the fare per mile and the government is paying $0.84/mile for people to ride BART.

You're missing a lot of externalities here.

Also, the cost to a driver of the car is around $0.70 not including cost to the government and cost of externalities.

> the government is paying $0.84/mile for people to ride BART

If BART disappeared tomorrow, how much would the government have to pay to build all the additional roads and parking to support that incremental traffic?

And how much for healthcare for all the incremental pollution and collisions?

> several cents per vehicle mile

It's close to a dollar per mile when you include all the externalized costs.

Incremental property damage, injuries and fatalities, incremental chronic illness from pollution, parking land subsidy, fair market value of incremental land use and rights of way, lost tax revenue from that incremental land use, etc.

Caltrain rides allow riders to be productive during the ride and generate income taxes in a way that cars do not.

In general, this is why semi-private or private transport works so much better. If the end user is getting a bunch more value out of working on the train, they will pay more for the train than the road (if they have to pay the full price of the road vs train each time they use each).

If you look at how American cities are laid out, the cost on society of car infrastructure is massive. Roads and parking space use up a very significant percentage of the real estate in an American city. Public transit is far more efficient with space, so it saves society as a whole a lot of money.

Private autonomous transportation will allow that public infrastructure to be tenfold more productive.

Public transportation will never have the incentive to minimize cost and headcount.

Where we do have public transportation, it should always face competition from private offerings - including on the tracks, as they do in Italy, for example.

That's not true. For example, France is rapidly automating its metros. The US is quite unique in viewing public transport as a jobs program rather than a public service.

Of course it has the incentive. Even in this thread people are getting mad about it costing too much.

When someone says incentive in this context, they usually mean the individual incentives of each of the workers to make money for themselves, get promoted to get a share of profit, not the overall fuzzy public pressure.

And low density suburbs in America are never going to get torn up and re-platted so autonomous vehicles is the only way to improve safety.

On the contrary, our biggest cities started as little groups of houses. Letting places increase their density is a natural solution to a lot of this. The core problem is that we need to take away the power of local government to limit development.

The roads and houses are constructed with such separation and space that it is literally impossible without eminent domain of basically every lot. It’s simply not a possibility to turn the suburbs with huge stroads and subdivisions into mixed use high density living.

The separation and space tends to resolve itself slowly and naturally as density increases. You get the pressure from the new people who live there to make crossings shorter and safer. It's slow, but it is effective.

As others are explaining, these calculations are essentially spurious due to all the off-the-books externalities.

In a city the only question that surely matters is: Can the mode of transport be scaled? For private car transit, the answer is no. No city can function if everyone gets around by car. Even Houston has light rail and a bus network. If you can drive and your city somehow remains livable, that is because other people are taking transit.

Citations please? Seriously, you are making up numbers for the cost of cars and the govt subsidies provided. Did you account for the DMV? Did you account for traffic police? Did you account for the installation and maintenance of traffic light systems? Of course you didn't.

The numbers aren’t made up. The Federal government publishes these statistics annually, they're widely used by policy analysts, and they're simple to calculate yourself.

The Federal government spends ~$17.5B/year on maintaining and constructing the interstate highway system. Americans drive 852 billion miles/year on it. The cost per Vehicle Mile Traveled (VMT) is 2.1 cents / mile.

If we look at all government spending (Federal, State, Local) on highways, roads, and supporting infrastructure (which includes traffic management systems), that's around $285B/year and 3.28 trillion miles, or 8.7 cents per Vehicle Mile Traveled.

The cost to the government to provide and maintain roads is on the order of several cents per mile traveled per year. Roads are simply much more cost-effective to build and maintain than dedicated public transit infrastructure.

iirc the NYC subway is only about 40% subsidized by fares. I’m happy to pay more in taxis for it to exist and subsidize lower income residents. There are huge economic benefits to the city that you’re not factoring in.

Not everything has to be directly money making.

If anything, the Bay Area needs significantly more public transit. BART in particular is mostly useful between cities, in my experience. You can’t go from the mission to cow hollow or dog patch to north beach, let alone anywhere to the ocean.

Also, subways don’t have much (if any) marginal cost per passenger. The issue isn’t cost but ridership. Ridership will increase with utility, which requires political will, which does not exist.

SF could be so much more.

If you think subways have no marginal cost per passenger, you should consider Zeno’s paradox more

If you think there would be zero cost to shutting down the NYC subway and putting everyone riding it into cars...

For another comparison, Moscow Central Diameters system (electric trains traveling from Moscow to nearby small towns) has 4 lines, 137 stations, 188 miles total length. It uses united fare payment system with buses and subway and transfer from a train to the subway is free of charge. Fare is about $1-$3 depending on the route. To be fair, it goes through Moscow at a slow speed and takes an eternity to get anywhere, and its range is limited [1].

Moscow subway [2] has 17 lines and 309 stations. In newer cars, 2 USB-A sockets are available near every seat, ready for robots.

[1] https://en.wikipedia.org/wiki/Moscow_Central_Diameters

[2] https://en.wikipedia.org/wiki/Moscow_Metro

But the Bay Area’s highway networks are at saturation during peak hours. 101 and 280 are at least as bad as before the pandemic.

We have under-utilized transit corridors that could alleviate much of this strain if they weren’t so damn far away from where the people sitting in traffic want to go.

You are completely ignoring the MASSIVE benefit the transit provides to the city. It allows densification. It allows people to get places without driving (and thus without parking). It frees up roads/traffic for those who do decide to drive.

Are you arguing that specific past bad economics are somehow indicative of a theoretical hard ceiling for any potential future performance? If so, how are other places in the world then regularly above that ceiling?

Yeah but the cost per passenger is in the hundreds due to private car ownership

Are you factoring in fixed costs to that estimate? That may be partially misleading if so.

How is it misleading? Taking the total cost to operate and dividing by the number of rides tells you what it costs per ride.

I’d be more interested to know how so many people are paying less than $1 for a mini trip when the fare is closer to $3.

Subsidies for public goods create economic multiples. It’s not plainly obvious that it’s bad to subsidize a trip by $10. And compared to what? How much is interstate infrastructure subsidized per trip? Or airline infrastructure?

I think most economists would contend that the value of the subsidies is largely captured by landowners. Public investment, private profits.

and that's why property tax exists (land value tax would be better, but anyway).

is it though?

the person riding transit benefits themselves, and their landlord, and the people driving.

they also benefit their workplace, by both working there, and not having to store a car there, and then anywhere they spend money at their destination, or the transit stops they used.

the value of the transit line is all over the place

Largely it is, according to both classical economic theory and modern empirical studies.

Often called 'land value uplift' these days, or 'unearned increment'/'land monopoly rents' in days gone by.

Theoretically in a free market, the landlords will be able to increase rent in proportion to the 'market value' of the convenience to the tenants (short commutes, etc). Likewise, homeowners will sell for a higher price - capturing the value that would be conferred to new owners. A city with good transport demands higher rents in outer suburbs serviced by that transport.

Your workplace likely also rents their premises too. They now have a convenient train station 5 minutes' walk away - and guess what, their landlord ups the rents too. Once again, in proportion to the 'market value' of the convenience to the workplace. The nearby cafes will now increase their coffee price to cover their increased rent.

Although this is the position of most economists, politicians are often reluctant to draw attention to it. Instead, where I live, they use models like commute time saved per person' x 'number of people' x 'average hourly wage'.

You can verify all of this yourself by viewing residential and commercial rental listings in your city.

Many economists have proposed solutions to this problem, often in the form of land value taxes.

Because it makes in implicit comparison with a hypothetical transportation mode with zero dollars of government subsidy.

The automobile analogue to fares is gas taxes, so the first crack at a true comparison is to compare the Caltrans budget to gas tax receipts.

They're discarding the cost per mile to a driver. If you add that back (and especially if you add externalities back) driving is more expensive.

Obviously yes, you have to since the vast majority of expenses (>70%) are fixed costs. If you only exclude them and only look at marginal costs, they're profitable.

But you cannot run a transit system on marginal costs, so using that comparison is also misleading.

The usual rule of thumb is that fixed costs of public transit are covered by increased property values. It could mean a private transit company developing the areas around stations (as it often works in Japan), or it could mean the government getting more money from property taxes. Or it could even mean more money from income taxes, if the transit project stimulates economic activity.

If a transit project doesn't increase property values enough to justify the investment, or if the entity funding the project cannot extract that value, the project rarely makes sense.

Now you’ve created a property tax regime where nobody is going to want to own residential property near a transit station.

Do you mean that nobody wants property values go up? The government gets more property taxes, because properties near transit stations are more valuable than in other places.

Yes, if you don't intend to sell, and actually want to live somewhere, higher property values just mean higher taxes (or if constrained like with Prop 13, declining services).

This doesn't have to be true. Washington State, for example defines the amount of property tax revenue to be charged and then divides that in proportion to everyone's taxable value.

So if everyone's value goes up 40% your property tax bill stays the same. If your area climbed faster than others, it goes up but not by 40%.

If property prices increase 40%, then cost of living increases, government needs to collect additional revenue to pay employees a living wage, and that feeds into taxes. Even without higher order effects, the above chain was literally about net increases in property taxes to fund more services and saying it's fine because property values increase (in specific locations, too). But property values are not a tangible thing for anyone who doesn't want to sell.

declining services here would mean that transit station stops gwtting service though, decreasing your property value

I certainly don't want my property taxes to go up, and since I'm not planning to sell or take out a big loan, my property value going up does me no good at all.

typically people want to live nearby transit stations because it means you can get places cheaply.

the property value goes up because of increased demand for it

Thought experiment: What would happen with total profitability, given positive marginal unit economics, if readership were to greatly increase?

I’d imagine it would get really congested unless massive fixed costs were expended to make the system higher capacity.

I mean my own PERSONAL per mile cost for a car is around $1/mi/yr, and it has a low interest rate loan and well below average monthly payment. Accounting for car insurance, gas, and maintenance.

And that’s not even counting for however much I’m subsidized on the highway and road systems I don’t pay anything to use.

Public transit is definitely expensive, but the alternative is also very costly and also regressive. The goal with public transit is to provide a low-cost, high-density way to move people around the city. It’s a public service, it shouldn’t be making profit. Car ownership is more expensive in total and very space-inefficient. Cities don’t have room for space inefficiency.

Blew my mind when I learned that about Caltrain. I thought tickets felt a little expensive, then I learned what it really should cost.

You know subsidy per train passenger mile?

Yeah I was shocked as well when I learned about the financials. I'll the subsidy per passenger mile to the table as well.

I remember talking to a VC a few years back, and he vehemently explained why he will never ever fund companies related to public transit, for this reason. Public transit was one of the two sectors he would not invest in (the other being materials science).

Incredible!!! Wow, is this apparent extraordinary cost discrepancy anybody’s fault, or is that just how it has to be?

In my opinion, the primary driver is the astronomical cost of housing in the SF bay area (which is 3x the national average), which drives up the cost of all labor. Public transit is infrastructure heavy, very labor intensive, and the high cost of labor makes it very expensive.

In the bay, low-skilled / manual laborers spend >50% of their income on housing. Many can't afford to live here, so they demand higher wages or leave, which drives up the price of labor even further.

If sufficient housing were built and the Bay Area had the same housing prices as the rest of the US, then 1) the supply of labor would go up 2) wages could fall by 30-40% without a quality of life decrease. Businesses could reduce their labor costs by 20%, which would improve the QoL of everyone in the area, including manual laborers. When local businesses cut costs, then everything costs less (food, housing, transport), and QoL goes up.

Then run this process iteratively and you will see massive reductions in prices everywhere, the cost of everything will go down by 30%+ percent.

For the case of BART, they spend ~$800 million / year on labor, so reducing cost here has the highest RoI. They would save hundreds of millions per year.

That's a feature, not a bug. Public transport is viewed as a jobs program in the US.

Buy America Act makes buses roughly three times more expensive, and then they use decades-old technology due to a lack of competition.

The MTA in NYC has two-person subway crews, which is almost unprecedented in this day and age. BART could be driverless if unions wouldn't revolt.

There's an irony that American unions are strong enough to prevent automatization, but weak enough to fear it (unlike say Denmark or France).

Looking at the financials outside the US might also be relevant. There are no reasons for the US to be special here in my opinion.

There is a reason why the US is special - Buy America Act. New Flyer and Gillig would collapse almost immediately if they were exposed to global competition.

I thought you guys were capitalists? Surely we should let them fail if they can't compete in a real free market

What is the amortized cost of all the cars, car infrastructure, driver monitoring and enforcement, parking easements and lots, gasoline, insurance, harm to people inflicted by uninsured drivers?

What would be the cost of turning all those transit trips into car trips? Would rush hour start at 5 am and end at 10 pm?

And how much do people spend on cars, gas, maintenance, insurance, parking, etc.?

This is the sad truth.

A lot of people are commenting about "externalities". That's just handwaving.

The real solution is to increase the ridership and the frequency. Public transit must be _reliable_. I live in SF and experience Muni's unreliability first hand.

The reason a person would prefer to drive over taking the Muni is a simple one: she knows the car will be there when she's ready to head back. Muni, on the other hand: one never knows when the next bus will come or if it will come at all. And then the City hands out Muni passes to all homeless people, regardless of behavior. Yesterday I sat down in a Muni train and guess what? A used piece of TP (about a foot long) was blowing around on the floor and everybody was playing dodge-the-TP, trying to jump out of its way. Buses and trains are often not cleaned at the end of the day.

Question is: why doesn't the City subsidize Uber/Waymo etc. also to the tune of $6.37/trip (inside SF)?

If you think that's bad, you should look at the financial returns on highways and roads! A much grimmer picture

it's almost like public transport is a service and not a for profit business

That's fine. It's just a matter of how unprofitable it should be. BART taxpayers are getting an absolutely terrible value for their money.

How unprofitable should it be?

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