Archive for the ‘Rail and Mass Transit’ Category.

Streetcar Folly

This article on an expansion of the already grossly under-performing Seattle trolley system has everything:  Over-optimistic ridership and revenue projections and no better service than busses while costing substantially more.  It's hard to figure out where to even excerpt this article, which is the kind of skeptical media coverage of light rail and trolleys that one almost never sees, particularly in a Progressive city like Seattle.

Your fares cover about 40 percent of operating costs for Sound Transit’s Link light rail. Fares cover about 31 percent of the cost of King County Metro buses. Seattle’s two streetcar lines cover 23 percent of their costs with fares.

But once a streetcar is built along First Avenue in downtown Seattle, the city Department of Transportation (SDOT) expects fares to cover a whopping 56 percent of operating costs for the three lines.

That would be among the highest rates of any transit agency in the country.

And it’s one of a number of optimistic financial projections contained in Seattle’s plans to expand a streetcar system that is performing far below expectations.

“The financial assumptions are simply unrealistic based on our history with the streetcar,” Seattle City Councilmember Lisa Herbold said. “I don’t want a situation where we don’t meet those projections and the result is we end up seeing bus-service hours cut to pay for any shortfall.”

Which is exactly what happens with every trolley and light rail project, as I reported on in Phoenix recently.

The two streetcar lines — South Lake Union and First Hill — have low ridership that the city doesn’t expect to improve until the First Avenue line is built. But once it is built? The city predicts an exponential surge.

So far this year, the city’s two streetcar lines have averaged about 5,200 riders per weekday, if you filter out 2½ weeks in the spring that the First Hill line was shut because of an uncontrolled skid.

Those numbers, for the two lines combined, equate to about the 25th-most-popular bus line in King County.

SDOT predicts that in its first year of service, the expanded streetcar system will more than quadruple its ridership — to nearly 22,000 weekday riders....

SDOT officials say their ridership model is the gold standard — used by the Federal Transit Administration to validate other agencies’ models.

I loved that last line - "used by the FTA"... not mentioning this model has been overestimating ridership at every other project in the country. I would say it is the gold standard for producing figures to try to sell a bad project to taxpayers.

I wish every article on light rail disclosed this critical piece of information:

Westlake Avenue is a microcosm of the arguments made by streetcar skeptics nationwide, who question their utility if they are not separate from other traffic.

“If you build a streetcar instead of a good bus line, that money you spend above the cost of the bus line is not helping anyone get anywhere faster,” Jarrett Walker, a Portland-based transit consultant, wrote in 2009.

Bus lines are almost always cheaper to build than streetcar lines and they’re also less expensive to operate. It costs King County Metro about $163 an hour to operate a bus, according to federal data, while a South Lake Union streetcar costs $242 an hour, although a streetcar can carry 30 to 40 more people than a double bus.

I will end with the line my reader pulled out from the article

Why, many transit users realized, should they ride the streetcar, which runs barely 1 mile, when buses come four times as often, cover the same stretch as quickly and also extend their routes to West Seattle and Ballard?

Phoenix Transit Ridership Continues to Fall as Light Rail Investment Goes Up

Well, the numbers are in for the 2017 fiscal year (which ends June 30) and after another huge investment in light rail, Phoenix has lost more transit ridership.   From the Valley Metro web site:

First, credit where it is due.  After years of bizarre chartsmanship where bars on their graphs bore only a passing relationship to the numbers being graphed, Valley Metro seems to have adopted a new (or their first) graphing program.

As you can see, while light rail trips were up by about a million, bus trips were again down by over 2 million, for a net loss in transit ridership of over a million, the fourth year in a row this has been the case.  I had expected rail ridership to rise, since in 2016 the rail system was expanded by 31% in length and 36% in cumulative investment.  This extension resulting in a 15.6% increase in rail ridership between 2015 and 2017.  Early on, I got in a debate with supporters of the line arguing that since they had cherry-picked the densest corridor in town to start, incremental extensions would actually reduce ridership per mile because they would be serving less promising routes.  Supporters argued that I was ignoring network effects and that ridership would rise faster than line length.  I guess we are sorting out that argument now.

In the ten years leading up to the opening of the light rail line, transit ridership grew by an average of 6.7% a year in Phoenix.  In the 8 years since the rail line's opening, total transit ridership has fallen 1% per year.  This is a well known effect (at least well known to all but rail die-hards) that Randal O'Toole, among others, has been pointing out for years.  Since light rail is an order of magnitude more expensive to operate per passenger-mile, and since transit budgets are never infinite, growing light rail tends to strangle bus traffic, because bus routes and service have to be cut to feed money into the light rail money pit.  Since every dollar spent on rail moves fewer passengers than a dollar spent on buses, transferring money from buses to trail reduces total ridership.  It is worth noting that had the line not been built and bus transit had been allowed to grow as it had before the line, there might have been over 40 million more trips last year assuming pre-2009 growth rates.

Stop Calling Crony Corporatism "Public Private Partnerships"

As someone whose company engages is what is usually called "public-private partnerships" or PPPs, one would expect me to be an enthusiastic supporter of all such efforts.  (As an aside, my company privatizes the operation, but not the ownership, of public parks and we are paid entirely by user fees and get not one single dollar of tax money.)

But I totally agree with Randal O'Toole's frustration here, talking about light rail in Denver:

Now RTD has been forced to admit that two other lines being built by the same company won’t open on time. RTD claims that it saved money by entering into a public-private partnership for the line in what is known as a “design-build-operate” contract. In fact, it saved no money at all, but was merely getting around a bond limit the voters had imposed on the agency. If the private contractor borrows a billion dollars or so and RTD agrees to pay the contractor enough to repay the loan, the debt doesn’t appear on RTD’s books. Taxpayers will still end up paying interest in the loans, which actually makes it more expensive than if RTD had stayed within its debt limit.

Public-private partnerships work great if the private partner is funded out of the user fees collected for the project, such as a toll road or water system. The Antiplanner resents the way the transit industry has coopted the term, public-private partnership, because their kind of partnership works differently. Instead of being dependent on fares, the private partner gets a fat check from the agency each month–up to $3.5 million in this case–whether anyone rides the train or not. This means the private partner has little incentive to make sure the system is working. RTD has withheld a portion of the monthly payments until the problems are solved, but eventually the contractor will get all of the money.

The solution isn’t for the agencies to build the lines themselves. The solution is to completely avoid megaprojects that aren’t funded out of user fees. Without the discipline of user fees, everything that’s happening with the A line should have been expected.

Phoenix Light Rail Update: Half Billion Dollars More Spent, Transit Ridership Continues to Fall

Valley Metro, the agency that operates light rail and most bus service in the Phoenix area, has published its 2016 annual ridership numbers, and they are awful (the agency is on a july-june fiscal year).  Over the past year, they have opened two extensions of the current light rail line, spending $o.5 Billion to extend the line 6.2 miles.  So what did we get for this?  Falling transit use.


To begin with, we must again look past Valley Metro's downright bizarre chartsmanship, where differences in bar length bear absolutely no relationship to the values graphed (just try to figure out the bar lengths for the last three years of light rail data).

We see that light rail ridership is up 9%.  This appears low, given that the line and total investment were increased by about 33%, but the new extensions were not available for the whole year.  My guess correcting for opening dates is that on a full year basis this represents about a 20% increase.  For May, June, and July light rail ridership has been running 19%, 26%, and 20% above the same month last year (before either extension was opened).  This is well below the increase in line length (31%) and line total investment (36%)

I have always argued that the first 20 miles of the light rail line cut through the densest part of the city, including the downtown area (such that it is), the two highest visitation sports stadiums, and ASU  -- and as such any future expansions were going to have a much harder time justifying themselves (ie, as in this case, a 31% expansion in length would yield something less than 31% increase in ridership).  Light rail supporters have argued in return that I had things exactly backwards, that network effects would mean that ridership increased faster than route length.  My sense is that this argument will pretty clearly tip in my direction by the time we have 2017 data.

By the way, with total investment up to over $2 billion and average weekday round trip ridership at about 23,500 in fiscal 2016, then the total capital cost (not including annual operating subsidies) of the line sits at about $85,000 per round-trip rider.   Whenever Valley Metro supporters defend the line against my attacks, they will often quote various riders saying how much they love it.  Of course they do!  They damn well should love it -- we taxpayers spent $85,000 for each one of them to open the line AND subsidize every single one of their rides.

But if you really want to see the cost of these subsidies, look at the bus and total transit ridership in the chart above.   Total transit ridership in the area has fallen to the lowest point since before the light rail line was first opened, despite the fact the city it serves is still growing.  This is because bus ridership has fallen off the map.   Just last year, for every 1 rider gained to the light rail line expansions, 3.6 were lost on busses.   To see how far bus ridership has fallen, you have to go back further than the chart above shows.  Here is an older Valley Metro chart I annotated for a previous article:

click to enlarge

You can see from this that bus ridership in Phoenix fell to a level we have not seen since 2003!  This is despite the fact that the Phoenix MSA has added about a million people since that time.

As it does in every city, light rail costs are starving the rest of the transit system.   By shifting transit dollars into a mode that requires 10x  more money to move a single passenger, the numbers of passengers served has to fall.  You can see from the chart that Phoenix transit ridership was rising steadily from 1997 to 2009.  But once light rail was completed, transit ridership absolutely stopped growing, despite population increases and large increases to total transit budgets.  Without light rail, we might very well have seen transit ridership as high as 90 million today, if past ridership growth trends held.


Matt Yglesias Summarizes the Public Parks Opportunity in One Paragraph

A two-fer!  This is from Yglesias's very good article on passenger rail also quoted in the previous post.  In discussing why Amtrak is generally uninterested in making incremental improvements on the Northeast Corridor, he writes:

The way Amtrak is currently set up, there's no real incentive to undertake incremental improvements. The Northeast Corridor already generates an operating profit, which simply defrays losses elsewhere in the system. Making it run better doesn't generate any wins for the people who would have to do the work, and would plausibly just lead Congress to reduce subsidies. If the NEC were spun off as an independent entity — perhaps even a private company — then it could internalize the gains from improved service and seek private financing to make cost-effective investments.

Long-time readers will know that my company privatizes the operation (but not the ownership) of public parks.  I will make two-hour presentations to parks agencies about how we can improve operations quality while cutting costs by 30-50% or more, and the near-universal response is, "well, if you reduce costs, then the legislature will just reduce our appropriations."  More efficient park operations, and at the margin better visitor service, don't create any wins for agency employees given their incentives.  In fact, if the parks are improved and more people show up, their job is just harder.  I had the manager of Arizona's premier state park tell me, absolutely in all seriousness, that he had the best job in the world if it wasn't for all the visitors.  Can you imagine a McDonald's franchise manager saying that?   As I have always said, government is not populated with bad people, it is populated with perfectly normal people who have terrible incentives.

When agencies choose how to spend incremental funds, they will almost always try to route these to the agency staff, in the form of more headcount and/or more pay.  When money is actually spent to make investments in the parks themselves, projects are chosen not by return on investment or customer priorities, but based on which ones will create the most prestige for the agency and its leaders.  This latter is one reason the Washington Metro is the mess it is, as the agency and the politicians who make appropriations will always prioritize system expansions over capital maintenance and sensible incremental improvements.

The US Has The Best Rail System in the World, and Matt Yglesias Actually Pointed Out the Reason

Yglesias has a very good article on why passenger rail is not a bigger deal in the US.   In it, he says this (emphasis added):

Instead the issue is that the dismal failure of US passenger rail is in large part the flip side of the success of US freight rail. America's railroads ship a dramatically larger share of total goods than their European peers. And this is no coincidence. Outside of the Northeast Corridor, the railroad infrastructure is generally owned by freight companies — Amtrak is just piggybacking on the spare capacity.

It is a short article, so it does not go into more depth than this, but I have actually gone further than this and argued that the US freight-dominated rail system is actually far greener and more sensible than the European passenger system.  As I wrote years ago at Forbes:

The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by far the greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe and Japan are not even close.  Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan.   As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States.  For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.

The real rail efficiency comes from moving freight.  As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails. ....

I would argue that the US has the world’s largest commitment to rail where it really matters.  But that is what private actors do, make investments that actually make sense rather than just gain one prestige (anyone know the most recent company Warren Buffet has bought?)  The greens should be demanding that the world emulate us, rather than the other way around.  But the lure of shiny bullet trains and grand passenger concourses will always cause some intellectuals to swoon.

Which would you rather pounding down the highway, more people on vacation or more big trucks moving freight?  Without having made an explicit top-down choice at all, the US has taken the better approach.

Politicians Love Building New Sh*t, They Hate Maintaining the Old Stuff

Quote of the day from Randal O'Toole on the closure of the entire Washington Metro yesterday for emergency safety inspections

The Washington Post’s architecture critic claims that the shutdown happened because “we decided to let our cities decay.” In fact, it’s because politicians decided that spending money on new construction projects, such as the Silverand Purple lines, would benefit their political careers more than spending it maintaining the existing system.

Before that, it’s because politicians decided to saddle Washington with an expensive, obsolete technology that the region can’t afford to maintain. Metro needs to spend $1.1 billion a year on maintenance to keep the system from deteriorating; it spent about a third of that in 2014, so it’s getting worse every year.

Phoenix Light Rail (Continued) Fail

In 2014, I published  an article based on Valley Metro's (our transit operator in Phoenix) very own ridership chart.  Here was the chart I showed:

click to enlarge

My point was that the huge amount of money spent on light rail, which essentially constituted a single commuting route in this enormous and spread-out city, was cannibalizing bus service.   The cost and investment to carry a light rail passenger is at least an order of magnitude greater than that needed to carry a bus passenger, and no public system can long endure this sort of cost increase to shift passengers from a relatively cheap transit mode to an expensive one.  Inevitably, bus service (which mainly benefits the poor) is terminated to pay for the train (which benefits middle and upper class riders who would not be caught dead on a bus).  I am pretty sure the train would have been harder sell if they had been honest and said that they were going to have to cut bus service for the low-income working folks so that ASU students and Arizona Diamondbacks and Phoenix Suns fans could have a better way to get to the ballgame.

Anyway, Valley Metro has updated the chart for 2015 and it continues to look bad:


They were smart to cut off history on this one so you can't see how they killed the growth trend with the advent of light rail.  But you see that total transit ridership fell, with a small fall in light rail ridership and a huge fall in bus ridership.   Oops.  As an aside, they still have not fixed their terrible chart plotting.  You can see this years bar for light rail being longer than the one for 2013 despite the fact the number is lower.

The 2016 numbers will be interesting.  Since 2015 they will have opened several light rail extensions and got themselves a huge new tax increase approved (over my stern opposition).

Update:  In retrospect, the bus ridership fall was significant but "huge" probably is an exaggeration.  I was fooled by looking at the bar lengths, which again seem to have nothing to do with the actual data.  They are clearly drawing this manually -- no automatic charting program would get it this wrong.

Is The Media Actually Waking Up to How Rail is Sinking Public Transit?

Readers will know that this is one of my favorite topics on this blog, how huge investments in showy rail projects that amp up the prestige of government officials tend to cannibalize lower cost bus service and, at the end of the day, actually reduce total transit ridership.  The LA Times almost sortof recognizes this, and Randal O'Toole is on the case:

“Billions spent, but fewer people are using public transportation,” declares the Los Angeles Times. The headline might have been more accurate if it read, “Billions spent, so thereforefewer are using public transit,” as the billions were spent on the wrong things.

The L.A. Times article focuses on Los Angeles’ Metropolitan Transportation Authority (Metro), though the same story could be written for many other cities. In Los Angeles, ridership peaked in 1985, fell to 1995, then grew again, and now is falling again. Unmentioned in the story, 1985 is just before Los Angeles transit shifted emphasis from providing low-cost bus service to building expensive rail lines, while 1995 is just before an NAACP lawsuit led to a court order to restore bus service lost since 1985 for ten years.


Transit ridership is very sensitive to transit vehicle revenue miles. Metro’s predecessor, the Southern California Rapid Transit District, ran buses for 92.6 million revenue miles in 1985. By 1995, to help pay for rail cost overruns, this had fallen to 78.9 million. Thanks to the court order in the NAACP case, this climbed back up to 92.9 million in 2006. But after the court order lapsed, it declined to 75.7 million in 2014. The riders gained on the multi-billion-dollar rail lines don’t come close to making up for this loss in bus service.


Los Angeles ridership trends are not unusual: transit agencies building expensive rail infrastructure often can’t afford to keep running the buses that carry the bulk of their riders, so ridership declines.

  • Ridership in Houston peaked at 102.5 million trips in 2006, falling to 85.9 million in 2014 thanks to cuts in bus service necessitated by the high cost of light rail;
  • Despite huge job growth, Washington ridership peaked at 494.2 million in 2009 and has since fallen to 470.4 million due at least in part to Metro’s inability to maintain the rail lines;
  • Atlanta ridership peaked at 170.0 million trips in 2000 and has since fallen nearly 20 percent to 137.5 million and per capita ridership has fallen by two thirds since 1985;
  • San Francisco Bay Area ridership reached 490.9 million in 1982, but was only 457.0 million in 2014 as BART expansions forced cutbacks in bus service, a one-third decline in per capita ridership;
  • Pittsburgh transit regularly carried more than 85 million riders per year in the 1980s but is now down to some 65 million;
  • Austin transit carried 38 million riders in 2000, but after opening a rail line in 2010, ridership is now down to 34 million.

I will add that total transit ridership has been totally flat in Phoenix after construction of a major light rail project.  The project's total cost is approaching $2 billion as they slowly add on short extensions, but this amount did nothing but cannibalize bus ridership.  In fact, the situation is worse than this, since before light rail was built, Phoenix transit ridership was growing rapidly every single year, so in fact light rail actually likely reduced ridership by about 14 million.  The whole story is here.  (I will have an update in a moment but they have updated the chart from that article and ridership fell yet again in 2015).

Does Transit Save Energy?

This is one of those questions that seems like a no-brainer -- a bunch of people are sharing a ride, so they must be saving energy.  When asked this question, we all think of a full bus or train of people vs. the number of cars that would have carried the same people.

The key issue turns out to be occupancy -- how full is the train or bus.   And it turns out that occupancy is probably lower than most people think.  That is because everyone rides on buses or trains as they commute -- they are going in the direction of most people's travel at the time of day they travel, so the transit is totally full.  But no one thinks about those trains having to go back the other direction, usually mostly empty.   As a result, we get to this fact, from the National Transit Database as synthesized by Randal O'Toole.

2014 Energy Use per Passenger Mile

  • Transit:  3141 BTU
  • Driving:  3144 BTU

Valley Metro Rail here in Phoenix does better, at a reported 1885 BTU per passenger mile.   As reported many times here on this site, the cost of building this rail line, now well over one and a half billion dollars, would easily have bought every round trip rider a new Prius, with a lot of money left over.   This would have saved more energy as well.  Buses in Phoenix are averaging just over 6000 BTU per passenger mile.


No on Phoenix Prop 104: The Promised Benefits Are Almost Certainly Grossly Exaggerated

A reader sent me this:  A recent McKinsey study looked at large infrastructure projects (over $1 billion).  In the introduction they observe:

Rail projects, for example, go over budget by an average of 44.7 percent, and their demand is overestimated by 51.4 percent.

We actually can combine these two numbers and find that the total cost per user of these systems was over-estimated by 117%, meaning the cost per user was on averagemore than double what was promised when these projects are sold to the taxpayers.

At the end of the day, the first segment of the line cost $75,000 per round trip daily raider.  We could have bought every regular rider a prius and a lifetime of gas and still saved money.

Phoenix Light Rail: We Spent $1.4 Billion (and Growing) To Subsidize ASU Students

The AZ Republic has some of the first information I have ever seen on the nature of Phoenix light rail ridership.  The first part confirms what I have always said, that light rail's primary appeal is to middle and upper class whites who don't want to ride on the bus with the plebes

Light rail has changed the demographics of overall transit users since the system opened in 2008, according to Valley Metro.

Passengers report higher incomes than bus riders, with more than a quarter living in households making more than $50,000 a year. Many riders have cars they could use.

The 20-mile system running through Phoenix, Tempe and Mesa recorded more than than 14 million boardings last year. Still, census data estimate less than one-third of 1 percent of Phoenix commuters — or about 2,000 people — use rail as their main transportation to work.

.0033% huh?  If we built similar facilities to serve everyone, it would only cost us about $420 billion at the rate of $1.4 billion per third of a percent.

But I thought this next bit was the most startling.  I always had a sneaking suspicion this was true but never have seen it in print before:

While the much larger bus system reaches most corners of the Valley, light rail connects specific destinations along a single line. Nearly half of light-rail riders are enrolled in college.

I must have missed this in the original sales pitch for the light rail line: "Let's pay $1.4 billion so ASU students can get to more distant bars."   Note that by these numbers, students likely outnumber commuters 10:1.  Doesn't bode well for light rail extensions that don't plow right through the middle of the most populous college campus in the country.

Postscript:  They don't break out people riding to get to sporting events downtown, but sporting events make up most of the largest traffic days on the system.  From my personal acquaintances, many people use light rail as a substitute for expensive downtown parking at sporting events, parking (often semi-illegally) near light rail stops and taking the train the rest of the way in.  On the whole, its not very compelling as a taxpayer to be helping to subsidize someone else's parking.  And from a municipal fiscal standpoint, it means that light rail fares may be cannibalizing (on a much greater ratio than 1:1 given the price differential) parking fees at municipal parking lots.

Why Valley Metro (Phoenix Light Rail) Can't Be Trusted and Shouldn't Be Given More Tax Money to Play With

I was reading this article in the Arizona Republic (which is generally an unskeptical cheerleader for light rail investments) and looking at the claim that Valley Metro (the operator of Phoenix light rail) had a 45% fare recovery ratio in 2013.  One would think that means that their fares cover 45% of their costs -- which would be awful for any real enterprise but is pretty good for government-run rail systems.

But in fact, Valley Metro (along with rail supporters in the Administration) stack the deck by defining most of the costs out of this metric so it looks far better than it really is.  In fact, by my reading of their financial statements, the true fare recovery is at best 15.2% and likely much worse.

Here are the Valley Metro financials for 2013, from their annual report



Look at their costs of $75+ million and fares of about $12.8 million.  How do they get to 45%?  Simple -- they leave the majority of their costs out.  They exclude administrative costs, financing costs, and depreciation (essentially their capital cost) from the equation.  This means that their fare recover is 45% -- IF you ignore their large administrative costs and you ignore the $1.4+ billion the line cost to build.   Further, because of the way the government does its finances, it is also missing any financing costs (interest and such on debt).

So the true cost recovery, stated in a way that  a reasonable person would think about such a number, is 16.8% at best.  If one takes into account the $8.28 million in "non-operating expenses" the number is 15.2%.  And it is even lower if you were to include interest and other financing costs.

I am sure Valley Metro will argue that this is the way the Feds measure it.  I don't care.  It has an obligation to accurately report its financial position to the public who is paying for it, particularly when the public is considering further investments in the form of higher taxes.  The 45% is a meaningless number that is crafted solely to make light rail look financial stronger than it really is.

This, by the way, is why total ridership of rail + buses has stalled since the construction of the light rail line.  Light rail is so expensive per rider that it is starving cash from the rest of the system.

Vote "NO!" on Phoenix Prop 104 Transit Tax

Randal O'Toole and the Arizona Free Enterprise Club have weighed in with a comprehensive report on Phoenix's Prop 104 transit tax, and the results are ugly.  A few findings:

  • The oft-repeated claim that light rail has generated $7 Billion dollars in economic development is simply untrue. In fact, many of the projects included in this claim have never been built (like the Sycamore Station development) or involve projects that have nothing to do with light rail (such as the $600 million Convention Center Expansion, which was funded largely by state tax dollars).
  • The main beneficiaries of the transit plan appear to be contractors and developers who have projects near rail stations. The tax revenue from the plan combined with the generous subsidies offered to select developments ensures that this plan will benefit a few contractors and developers at the expense of others.
  • The plan is unbalanced and ignores vehicle street improvements. Despite the fact that only 3% of the population uses transit (less than 1% use light rail), 95% of the funding in the plan goes toward expanded bus and rail service. Only 3% goes toward vehicle street improvements.
  • Transit ridership actually fell after the light rail opened. From when light rail opened in 2009 through 2014, any gains in light rail ridership were offset by the loss of more than one bus rider. Ridership is still 1.2 million less per year than it was in 2009.
  • The transit plan as proposed will increase traffic congestion, energy usage and greenhouse gas emissions. In fact, the transit plan will use more

The complete report is here.

Coyoteblog readers will be totally familiar with this statement from the report about light rail merely cannibalizing bus riders, echoing past articles I have had saying the same thing:

According to the city of Phoenix and Valley Metro, light rail is a great success in Phoenix, generating a 42-percent increase in transit ridership since 2001 and stimulating the construction of $7 billion in new real estate development along its route. A close look, however, reveals that both of these claims are wrong.

The increase in ridership took place between 2001 and 2009, the (fiscal) year that the light-rail line opened. Since that year, for every light-rail rider gained, the region’s transit systems lost more than one bus rider. Per capita transit ridership has declined by 8 percent since 2009 partly because the high cost of light rail forced a 34-percent increase in average bus fares by 2010 and an 18-percent decrease in bus service by 2013.

You can see this perfectly well from a chart right off of our transit authority's web site (except for my annotation in red), which I discussed in depth here.

click to enlarge

It is just incredibly disingenuous that light rail supporters are trying to claim credit for transit ridership increases that occurred before the line was built and whose growth the line essentially halted.

Another claim the report demolishes is that light rail is somehow spurring development.  Supporters claim $7 billion of light rail development planned or built along the line, but oddly enough that is the exact same figure they were touting almost 8 years ago before the line was even completed.  Doesn't seem like they are getting much traction, huh?  In fact, the list actually shortens with every year as projects get cancelled and no new ones are added.  But beyond this, simply adding up development along the line and claiming that it is all incremental to the line's construction is simply moronic, the same facile BS analysis often used to support publicly funded football stadiums.    The obvious questions are:

  • How do they know this development is incremental, and not development that would have occurred anyway?  In particular, this line was built through the three of the largest pre-existing development hubs in the metropolitan area (North Central Ave, Downtown Phoenix, and Tempe/ASU).  There was always development activity in these areas, and always going to be
  • Much of the new activity they cite is near Tempe Town Lake, and I would give that project, not the rail, much of the credit.  The city did a marvelous job (see, I can give props to government once in a while) converting a big wide ugly dry ditch into a lake that is the centerpiece for business and condo development
  • Much of this development is subsidized by various government programs.  It is impossible to separate the effects of the subsidy from the rail line.

Finally, if you don't believe me about the relative costs of the two modes, let's take a look at the number from Phoenix's own plan.  They speak for themselves:


So what does one get for the 5x higher operating costs and 134x higher capital costs of light rail over buses?  Well on the negative side, one gets a system that is substantially less flexible and responsive to changes.  The only positive I can come up with is that middle and upper class white people consider buses low class and want a transportation mode of their own.

Even Vox Can't Make A Very Strong Case For Streetcars

A reader sent me a link to this Vox article on streetcars.  What I thought was interesting is just how weak the case for streetcars is, even when made by folks are are presumably sympathetic to them.  This page is entitled "Why do cities want streeetcars."  The arguments are:

  • Tourists like them, because you can't get lost like you can on buses.  My response is, "so what."  Unless you are one of a very few unique cities, tourists are a trivial percentage of transit riders anyway.  Why build a huge system just to serve out-of-town visitors?  I would add that many of these same cities (e.g. Las Vegas) considering streetcars are the same ones banning Uber, which tourists REALLY love.
  • Developers like them.  Ahh, now we are getting somewhere.  So they are corporate welfare?  But not so fast, they are not even very good corporate welfare.  Because most of the studies they cite are total BS, of the same quality as studies that say sports stadium construction spurs all sorts of business.  In fact, most cities have linked huge tax abatement and subsidy programs to their streetcars, such that the development you get with the subsidy and the streetcar is about what you would expect from the subsidies alone.  Reminds me of the old joke that mimicked cereal commercials: "As part of a breakfast with juice, toast, and milk, Trix cereal has all the nutrition of juice, toast, and milk."
  • Good for the environment.  But even Vox asks, "as compared to what."  Since they are generally an alternative buses, as compared to buses that have little environmental advantage and often are worse (they have a lot more weight to drag around when empty).
  • The Obama Administration likes them.  LOL, that's a recommendation?  When you read the text, what they actually say is that mayors like the fact that the Obama Administration likes them, for it means the Feds will throw lots of Federal money at these projects to help mayors look good using other peoples' money
  • Jobs.  This is hilarious Keynesianism, trying to make the fact that streetcars are 10-100x more expensive than buses some sort of positive.  Because they are more inefficient, they employ more people!  One could make the exact same argument for banning mechanical harvesters and going back to scythes.   Left unquestioned, as Bastiat would tell us, is how many people that money would have employed if it had not been seized by the government for streetcar use.
  • Je ne sais quoi.  I kid you not, that is their final argument, that streetcars add that special something to a neighborhood.  In my mind, this is Vox's way of saying the same thing I did the other day -- that the streetcar's appeal is primarily based on class, in that middle and upper class folks don't want to ride on a bus with the masses.   The streetcar feels more upscale than buses.   The poor of course, for whom public transit is most vital, don't want to pay 10 times more for sexiness.  Oh, and watch this video of Washington streetcars blocking traffic and crunching parked cars and tell me what it is adding to the neighborhood.

Every argument I have ever been in on streetcars always boils down to something like "well, all the cool kids like them."  Once, after defending the US approach to rail (vs. Europe and Japan) as (correctly) focusing on productivity vs. sexiness, having gone into a lot of detail on the economics of freight vs. passengers, I got a one sentence answer from Joel Epstein of the HuffPo:  “You should get out of the country more often.”  That was it -- the cool cosmopolitan kids who vacation in Gstaad but never would be caught dead driving across Nebraska were all against me.

Streetcars: A Scam That is All About Class

I am increasingly convinced that the appeal of streetcars and light rail has everything to do with class.  From any rational perspective, these systems make no sense -- they are 10-100x more expensive than buses and lack the flexibility that buses have to adjust to shifting demand patterns over time.  A single extra lane of highway adds more capacity than any light rail line.

Streetcar's single, solitary advantage is that middle and upper class whites who would not be caught dead on a bus seem to be willing to ride streetcars.   I don't know if this is because of some feature of the streetcars (they are shiny and painted pretty) or if it is some sort of self-segregation (the upper classes want to ride on something that is not filled with "riffraff").

Anyway, Reason has a really good video on streetcars, which covers a lot of topics from cronyism to the class issues I mention.  And the film of the incredibly poor design of the DC streetcar has to be seen to be believed.  (via Maggies Farm and their great daily links page)

Great Example of Concentrated Benefits / Dispersed Costs Cronyism: New Phoenix Rail Tax

The hefty sales tax that funds Phoenix light rail deficits is about to expire, and as is usual, politicians not only don't want it to expire but they want to double it so they can build more over-priced rail lines.

One of the reasons that stuff like this is so hard to fight is a phenomenon called "concentrated benefits but dispersed costs."  This means that, particularly for certain crony handouts, the benefits accrue to just a few actors who, due to the size of these giveaways, have a lot of financial incentive to promote and defend them.  The costs, on the other hand, are dispersed such that the final bill might only be a few dollars per taxpayer, such that no individual has much incentive to really pay up to support the fight.

A great example of this is sugar tariffs.  These raise the price of sugar (as well as reducing our choices and effectively promoting imperfect substitutes like HFCS) so we as consumers should all fight them.  But the higher cost of sugar might only cost us, say, $20 each a year individually.   Are you really going to donate $100 in a political cause to save $20?  On the other side, these tariffs create millions and millions of dollars in profit for a few sugar producers, such that they have a lot of money and incentive to spend big on lobbying to keep the tariffs in place.

The new Phoenix light rail tax increase gives us a yet another sad example of the phenomenon:

Construction companies, engineering firms and transit service providers are the biggest early supporters of the Proposition 104 campaign to expand Phoenix transportation, while the group fighting the proposed tax increase still seeks major funding.

The MovePHX campaign, supporting the bus, light rail and street improvement plan going before city voters in August, raised $382,900 from March through the end of May, according to finance reports filed Monday.

Opposition group Taken for A Ride — No on Prop 104 received just under $417 from individuals over the same period. A second campaign committee opposed to the proposition formed after the contribution reporting period ended....

More than half of the contributions to the MovePHX campaign during the reporting period came from engineering, design and construction firms, including many that were hired for design and consultation on the Valley's first stretch of light rail.

The largest single donation came from We Build Arizona, a group of engineering, contracting and transit organizations that donated $125,000 to the campaign. TransDev and Alternate Concepts, Inc., which hold bus and light rail service contracts, contributed more than $35,000 combined.

A combined $30,000 came from police, firefighter and food and commercial worker union political action committees.

$382,900 to $417.  That is why cronyism is so prevalent.

Even at the Margin With Capital Charges Sunk, Light Rail Economics are Awful

A reader and frequent contributor sent me this:

When 120,000 people head to downtown Orlando for the big July 4 fireworks show at Lake Eola, none will be getting on SunRail.

It’s not running.

Central Florida’s $1 billion commuter-rail line usually only operates Monday through Friday, and while a few special weekend events in recent months have booked the train, one of the biggest gatherings of the year won’t.

Fireworks at the Fountain, in addition to the sky show, will feature more than 25 vendors, live music and children’s activities.

But Orlando city staff researched the addition of SunRail service, but found it wouldn’t work, said Cassandra Lafser, the city’s public information officer.

“Several factors contributed to this decision, including safety, availability and costs,” Lafser said in a prepared statement.

“The city’s concerns included: total train capacity, safety and security, hours of operation, pedestrian wayfinding and transport operations between the downtown stations and Lake Eola, and funding availability.”

So, even in a situation where capital costs are sunk and can be ignored, an incremental decision to operate the train on a very heavy commuter day makes no economic sense.  You want to know why?  Because it makes no economic sense Monday through Friday either.  Light rail never pays back any of its capital costs, but the vast majority of light rail loses money operationally at the margin as well.

Is the Light Rail Fail Moving to Las Vegas?

Patrick Everson has the first of a two-part series of editorials in the Las Vegas Review-Journal on light rail.  In this first part, he is nice enough to refer to much of what I have written here about the problems with Phoenix Light Rail.  You can find his editorial here.

Transit Net Transit Ridership Does Not Go Up When Cities Build Rail

As I have written before, Phoenix has seen its total transit ridership flat to down since it built its light rail line.  This after years of 6-10% a year increases in ridership.  Most cities, even the oft-worshipped Portland, have seen the same thing.  Here is the chart for Phoenix (if you look closely, you can see how they fudged the bar scaling to make light rail ridership increases look better).



The reason is that per passenger, or per mile, or per route, or whatever way you want to look at it, rail systems are 1-2 orders of magnitude more expensive than buses.  Since most cities are reluctant to increase their spending on transit 10-100x when they build trains (and to be fair, proponents of rail projects frequently make this worse by fibbing about future costs and revenue expectations), what happens is that bus routes are cut to fund rail lines.  But since buses are so much cheaper, 10 units of bus capacity, or more, must be cut for each one unit of rail capacity.

The Anti-planner shows us an example in Honolulu.  No, the line is not finished so this effect has not happened yet, but you can see it from a mile away:

The city and state officials who promoted construction of Honolulu’s rail transit line now admitthat they don’t know how they are going to pay for the cost of operating that line. Between 2019, when the first part of the line is expected to open for business, and 2031, those costs are expected to be $1.7 billion, or about $140 million per year. In 2011, the annual operating cost was estimated to be $126 million a year.

Honolulu has about a hundred bus routes, which cost about $183 million to operate in 2013, or less than $2 million per route. The rail line will therefore cost about 70 times as much to operate as the average bus route.

So they have budgeted no money for operations, and are probably underestimating net operating costs as their revenue projections, as discussed later in the article, are transparently over-optimistic (this is always a good bet, since 99% of rail projects under-estimate their costs and over-estimate their ridership).  The rail line will cost as much to operate as 2/3 of their city's entire bus system, which is extensive and well-used. So how many bus routes will be cut to fund this one route?  10?  30?  70?

By the way, beyond the obvious harm to taxpayers, the other people hurt by this are the poor who are disporportionately bus users.  Rail systems almost always go from middle/upper class suburbs to business districts and seldom mirror the transit patterns of the poor.  Middle class folks who wouldn't be caught dead on a bus love the trains, but these same folks already have transportation alternatives.  The bus lines that get cut to fund the trains almost always serve much lower income folks with fewer alternatives.

Phoenix Wants to Double the Light Rail Tax

Our great city is proposing to double the sales tax increase dedicated to light rail and make the increase permanent.  This all so we can spend more money to shift people from busses to a mode that is more than 10x more expensive per passenger mile.

Is The Left Finally Starting to Question Light Rail?

This is the first even mild questioning of light rail I have seen, and it is certainly welcome.  It even acknowledges that the sole advantage of light rail over much more flexible and less expensive buses is that it is more appealing to the middle and upper classes.  Via Kevin Drum:

Josh Barro thinks our cities are building too much light rail. It's expensive, often slow, and offers virtually no advantage over simply opening up a bus line. The problem, according to a 2009 report from the Federal Transit Administration, is that "Bus-based public transit in the United States suffers from an image problem."



Infrastructure Bait and Switch

President Obama wants to spend something like a half trillion incremental dollars on "infrastructure".  I have found that these initiatives to sell infrastructure tend to be great bait and switch programs.  Infrastructure is generally the one type of government spending that polls well across all parties and demographics.  So it is used by government officials to pass big spending increases, but in fact what really happens is that the government takes a wish-list of stuff that most of the public would not be OK with increasing spending on, then they put a few infrastructure projects on top like a cherry to sell the thing.  They call it an "infrastructure" program when in fact it is no such thing.

Obama would never do that, right?  Hope and change?  In fact, he already has.  The first time around he sold the stimulus bill as mainly an infrastructure spending bill -- remember all that talk of shovel-ready projects?   Only a trivial percentage of that bill was infrastructure.  At most 6% was infrastructure, and in practice a lot less since Obama admitted later there were no shovel-ready projects.   (also here).  The rest of it was mainly stuff like salary support for state government officials.  Do you think he would have as easily sold the "wage support for state government officials" bill in the depth of a recession?  No way, so he called it, falsely, an infrastructure bill.

The other bait and switch that occurs is within the infrastructure category.  We have seen this at the state level in AZ several times.  Politicians love light rail, for some reason I do not understand, perhaps because it increases their personal power in a way that individual driving does not.  Anyway, they always want money for light rail projects, but bills to fund light rail almost always fail.  So they tack on a few highway projects, that people really want, call it a highway bill and pass it that way.  But it turns out most of the money is for non-highway stuff.  That is the other bait and switch that occurs.

Expect to see both of these with the new infrastructure proposal.

By the way, Randal O'Toole has a nice summary of the drawbacks of light rail and trolley spending

For the past two decades or so, however, much of our transportation spending has focused on infrastructure that is slower, more expensive, less convenient, and often more dangerous than before. Too many cities have given up on trying to relieve congestion. Instead, they have allowed it to grow while they spend transportation dollars (nearly all paid by auto users) on other forms of travel such as rail transit. Such transportation is:

  • Slower: Where highway speeds even in congested cities average 35 miles per hour or more, the rail transit lines built with federal dollars mostly average 15 to 20 mph.
  • More expensive: In 2013, Americans auto users spent less than 45 cents per vehicle mile (which means, at average occupanies of 1.67 people per car, about 26 cents per passenger mile), and subsidies to roads average under a penny per passenger mile. By comparison, transit fares are also about 26 cents per passenger mile, but subsidies are 75 cents per passenger mile.
  • Less convenient: Autos can go door to door, while transit requires people to walk or use other forms of travel, often at both ends of the transit trip.
  • Less safe: For every billion passenger miles carried, urban auto accidents kill about 5 people, while light rail kills about 12 people and commuter trains kill 9. Only subways and elevateds are marginally safer than auto travel, at 4.5, but we haven’t built many of those lately.

Why Can't [X] Be Free

In the Warren Meyer style guide, any phrase like this one -- Why Can't Public Transit Be Free? -- would be reworded "Why Can't Other People Pay For My Transit" so as to be more accurate.  Because it clearly can never be free (short of an Iain Banks post-scarcity future world).  An even more generic title for this would be "why can't non-users pay for users' services?"

One other thought -- since when did "getting people out of their cars" become the goal of public transit?  Is that really a goal worth spending money on?   I understand that many transit advocates have this goal nowadays, but in the new systems being built (outside of New York) there is little or no energy reduction in moving people by transit.   And the cost per passenger mile of these system is much higher than for building more roads for more cars.   And it is no longer about mobility for poorer folks -- new light rails systems cost a fortune, and are built to appeal to professionals and the middle class, while crowding (due to their huge costs) buses that are the traditional source of mobility for the poor.

I get the sense that the argument for transit nowadays is almost aesthetic -- people find cars and roads and suburbs aesthetically distasteful, and want to replace them.  That would explain the focus on insanely expensive light rail systems, that look cool, over buses that actually move people for a reasonable cost.  I saw a great quote the other day, I wish I can remember who said it.  Something like, "Progressives aren't trying to create a rational world, they are trying to create Portland."

update:  Thanks to a reader, here is the actual quote (and source):  "The goal of progressivism is not to make the world rational; it’s to make the world Portland."

Want to Increase Infrastructure Money for Highways Immediately by 31%? Stop Diverting Highway Money to Transit

This DOT table, pointed out to me by Randal O'Toole, shows that money spent on highways could be increased immediately by over 30% if highway money was not diverted to transit and other uses.  About 13% of state gas tax revenues meant for highways are diverted to non-highway transit projects (e.g. light rail boondoggles).  Another 9.4% are diverted to general funds, and may not be applied to transportation projects at all.   The same table shows that if all state MVD receipts were used to support investments for cars rather than transit and general spending, money available for roads would increase 45% from those funds.

Transit projects should be supported by their own riders.  This will never happen, because they are so egregiously expensive per passenger-mile that no one would ride them if their trip were not subsidized by the rest of us**.  And I am exhausted with having folks argue that highways are "subsidized" because they require tax money beyond the gas taxes (which are essentially a user fee) when these extra tax monies for highways would be largely unneeded if the highway funds were used for highways.  The diversion to general funds is particularly troubling, since sleazy government officials are obviously trying to piggy-back off the popularity of highway infrastructure investment to generate a slush fund for activities taxpayers are less likely to support.

And please do not tell me that as a highway driver, investments in transit are doing me a favor by getting cars off the road.  Transit investments are so expensive per passenger mile that the same money spent getting a few cars off the road via transit would substantially increase road and highway capacities.  A dollar of highway investment carries at least an order of magnitude more passenger miles than a dollar of transit spending.

** I am always amazed that supporters of such transit projects call light rail projects "sustainable".  Forget for a minute that they seldom use less energy per passenger mile than driving.   Think about all the resources that go into them.  This at first seems like a hard problem -- how do we account for all the resources that go into transit vs. go into driving.  But then we realize it is actually easy, because we have a simple tool for valuing resource inputs:  price.  Prices are a great miracle.  They provide us with a sort of weighted average of the value and scarcity of the resources (both hard, like titanium, and soft, like labor and innovation) that go into a product.  So if light rail costs 10x or more per passenger mile than driving, as it often does, this means that it uses ten times the value of resource inputs as driving.  This is sustainable?  I do not think that word means what you think it means.