The Fallacy of Light Rail Transit - the Basic Economics Fail

A few years ago I did a policy study on how Toronto compared to other major cities as far as rapid transit meeting our population's needs and the level of improvement needed to bring us up to snuff.

As a Canuck, I spend much of my time comparing us and them (with "them" most often being the USA); it's a pastime only surpassed by comparing how many missing teeth our hockey team has compared to our opponents. I probably spend more time looking at the USA than I do looking at us. In fact, I probably spend more time looking at the USA than many Americans do.

One thing I notice about Americans, when they look at themselves, is that many are even more self-critical than Canucks are. They look at how badly they are doing, and how poorly they are succeeding, when (arguably) they are doing pretty darn well at almost everything. At least comparatively and historically.

One area for which the USA is commonly most often self-critical is rapid transit. Critics always point to other places (usually European cities and sometimes Toronto) as doing such a better job of providing public transportation to their populace.

Now I have learned over the years that often critics have one foot on the truth and one foot solidly on their self interests. So people looking at criticism of public issues always need to look behind the curtain. But that being said, "How well is the USA doing in public transportation?"

This morning I ran across a web-page that listed the 125 largest cities in the world by area and my curiosity was aroused enough to look closer.(http://www.citymayors.com)

And I thought it might be interesting to compare these data to my previous subway study. So I did and what did I find?

That a comparison relative to rapid transit for USA cities to cities in other countries, especially in Europe,  is mostly invalid largely because of geography.

When rapid transit was being initiated in about AD 1900, countries in the European Union had a population of about 400 million people (on 4.2 sq Kilometers of land), while the USA had about 76 million people (on 9.8 million sq Kilometers). There were 5 times as many Europeans as Americans on 40% of the area.

In Europe land was precious and expensive while in the USA it was (and is) as cheap as borscht. So Europe condensed its population while the USA spread it out.

Rapid transit, to be viable from an infrastructure cost/benefit perspective, has to connect areas of critical mass of population. Otherwise the cost recovery price of a transit fare becomes unrealistic for consumers, or the system becomes a sinkhole for tax dollars.

Now, of course, one should probably compare the cost of building roads and their maintenance and the cost to the environment by not providing transit and requiring travelers to buy and operate their own rolling stock (i.e. vehicles). But I'm not being paid to write this, so I will be lazy and leave this evaluation to others.

But the point is, in the USA, the spreading out of the population made - and still probably makes - sense. Which by definition probably makes a large expenditure on public rapid transit, in the vast majority of US metropolitan areas, not viable; especially since commuters travel wildly off in all directions in the USA.

Now there are some exceptions. American cities with large populations and high densities actually have fairly decent rapid transit. Residents in New York City, Chicago, DC, and San Fran all are relatively well served. But expecting to bring this infrastructure to all urban centres is, well, optimistic.

I encourage anyone to do a very simple analysis; divide the capital cost of a system by the number of rides over the course of the first ten years of operation.

Typically a billion dollars in investment will provide ten kilometers of surface Light Rail Transit (people cycle to work further than that every day in Toronto). Capacity of a LRT unit is about 220 riders. Multiply that by about 24 LRT trips / day results in 5,000 riders / day or 12.5 million over the course of a decade.

This translates to a cost of $80 / rider just on today's capital costs and not operations or repair and maintenance or depreciation over a decade. Then ask yourself whether people would pay this amount to give up their Escalades. To quote a famous American, "That dog don't hunt".