There is a lot of solid economics behind this approach. The problem with infrastructure is that it generates a lot of positive externality. The passenger benefits, but so too does the business that employs the commuters who ride in rail, or the retail owners. Inability to capture revenues from these sources makes infrastructure investment less attractive than it otherwise should be.
You could also argue that this sort of infrastructure is best done by the government because it is best positioned to reap the benefits. Medieval historians would use the word Landesausbau. I understand that rural parts of Japan Railways are essentially enabling tourism.
If you're an advocate for transportation options, this is a good thing.
But on the other hand, if you don't build and replace infrastructure now, you're going to have tons of problems that have real, tangible costs. Imagine you're a patient with a disease, but you don't have health insurance and you know the cost is for treatment is high. You wait several years to get treated but the cost for treatment hasn't changed or is higher and you've suffered all that time.
That's our conundrum. We can choose to not treat the disease and that's been the choice of a fair number of public officials but it's only cost us.
Sadly those that pay for crossrail are the workers who pay marginal tax rates of 45%, 55%, even higher than 70% in some cases, on the money their employer spends on them.
Those that benefit are the non-workers, who pay very little in tax (unearned income is taxed far less than earned income), and benfit from £5.5b increase in land value [1] from their monopolization of a common asset.
[0] https://www.civilserviceworld.com/articles/feature/crossrail... [1] http://www.crossrail.co.uk/news/articles/crossrail-predicted...
An I would love for my next job to be paid in London a similar to salaries FANG pay in SV (housing costs are about the same) and pay additional rate tax as that would give me a lot more options for pension contributions could max out my ISA that's 20k pa removed from any future tax.
Also when I buy RDSB (Shell) shares the dividend and capital gain I get is in return for risking my post tax money its defiantly not unearned income from my perspective.
At the "higher tax" threshold, you can earn an extra £118, but end up paying an extra £268 in tax as you lose married couple tax allowance -- i.e. do some overtime and end up with less money.
Meanwhile those who are wealthy and powerful enough to structure their earnings as capital gains pay a mere 28%
Sounds like your one of those people who earn enough several times the UK median wage to have some child benefit removed.
Ranting about people who put equity at risk and receive capital gains seems strange for such a high earner such as you why haven't you done salary a sacrifice into a pension.
If you look at households with two adults and two children, this kicks in just below the median [2]
The upshot is that I do £1k overtime, which costs my employer £1138, and I keep £400 My collegue who earns 50% as much as me keeps £600 My contractor collegue who is paid twice as much gets paid that £1138 and he keeps £682 My part time collegue who does 5 days a fortnight and gets paid more per day than I do keeps £670 (as does her husband who does the same shift pattern - so they have the same pre-tax household income but far more post-tax)
Not exactly progressive.
[0] https://www.virgintrainscareers.co.uk/VacancyInformation.asp... [1] https://www.telegraph.co.uk/news/2016/03/15/how-well-off-are... [2] https://www.theguardian.com/money/2014/mar/25/uk-incomes-how...
I few years ago I was the lead technical resource for an in house consultancy at RELEX and solved major problems for house hold names and I got paid < 1/2 what a train driver does for a 4 day week.
You both need to realize you are lucky and also learn some maths you colleague who earn 50% less than you is not coming out ahead.
A household with one earner on £50k has a post-tax income of £37k, 26% above average as a household, and lightly under average for the size of household.
My collegue who earns 50% less for 50% of the work does come out ahead. My household works 40 hours a week and gets £50k, her household works 40 hours a week and gets £50k. Our marginal tax rate is over 60%, theirs is 33%.
https://www.telegraph.co.uk/business/2016/08/17/britons-bett...
Consider for example that every single American (at least) on this forum has heard about California high-speed rail and how much it costs, but I had never heard of this $8-billion highway project until I just googled "LA highway projects":
http://www.latimes.com/local/california/la-me-high-desert-fr...
Projects like that one are running all the time and nobody cares or complains.
So do lots of private projects. Large-scale projects in general have this problem. I'd like to see a comparison of private and public.
Also, at the end of a public project, the public owns valuable assets.
A large number of movies, split roughly equally between masterpieces like Alien and forgettable failures like Water World?
I don't think anyone who was around in the 90s will forget Waterworld, just not for the reasons the studio wanted!
The idea that the private sector is somehow more efficient at large-scale projects can only be believed by people who deliberately ignore the track record of large-scale private-sector projects.
> In 1993, FoxMeyer Drugs was the fourth largest distributor of pharmaceuticals in the U.S., worth $5 billion. In an attempt to increase efficiency, FoxMeyer purchased an SAP system and a warehouse automation system and hired Andersen Consulting to integrate and implement the two in what was supposed to be a $35 million project. By 1996, the company was bankrupt; it was eventually sold to a competitor for a mere $80 million.
> In 1998, two years after filing for bankruptcy, FoxMeyer sued Andersen and SAP for $500 million each, claiming it had paid twice the estimate to get the system in a quarter of the intended sites. The suits were settled and/or dismissed in 2004.
https://www.computerworld.com/article/2533563/it-project-man...
> Installed in 2003, the system promptly ran into what were then described as "horrendous" barcode-reading errors. Regardless, in 2005 the company claimed the system was operating as intended. Two years later, the entire project was scrapped, and Sainsbury's wrote off £150 million in IT costs. (That's $265,335,000 calculated by today's exchange rate, enough to buy a lot of groceries.)
Target's failed expansion to Canada makes for a fun read, too: http://www.canadianbusiness.com/the-last-days-of-target-cana...
I think privatized systems (with appropriate incentive structures) are particularly appropriate for the U.S., because most of the country does not use transit, so there is little effective political oversight over transit systems.
We have a national government, why can't they provide grants to increase and build more railways? I mean the US government provides billions in grants/money to maintain and build roads because States are unable, whether politically or mathematically, to raise taxes to cover the true costs of road maintenance.
As to the government building things: it can’t. For whatever reason our governments in the US are completely unable to build and maintain infrastructure, especially transit. The two best American systems, NYC and DC, are in shambles now after decades of mismanagement. This is not unique to transit: local governments all over the country are poisoning kids through ancient lead water pipes. We are unwilling to spend the money, and when we do, our outrageous public unions and NIMBYism cause things to cost multiples what it costs Europe or Asia.
That’s not true of all governments. (Though, I think you’d be surprised to see that most European countries have a heavier dose of privatization than the US, though less than Japan.) But for whatever reason, maybe some moral deficiency in our body politic, its true of ours. Given that, developing a market solution is a good option. And allowing the transit provider to “tax” both sides of the equation by charging fares as well as rents on surrounding land, is an economically sound way of optimizing the incentive to invest.
The current model is equivalent to socializing the losses and privatizing the profits. Let's go all public or all private but not some horrible mishmash system like we did with healthcare.
The states have actually been raising gas taxes due to the inability of the federal government to do so (and provide more funding.) In fact the main issue these days is that the federal government hands out lots of money for new projects but not a lot for maintenance, which just encourages localities and states to spend a lot of money on infrastructure they don't really need because they don't need to think about the long term liabilities and the lifecycle replacement.
The developer builds and sells the homes but retains the town centers and thus makes money on leasing retail and restaurants.
There is barely any undeveloped land in the metro area that the Brightline is starting life in. There is underdeveloped land on the rail corridor that can be used to further increase population density, but that is true of many metro areas.
In fact, the 7 Line extension serving the Hudson Yards development in New York also involved a bait-and-switch in which a intermediate subway station was promised, the neighborhood was developed, and then the subway station was cancelled due to cost concerns.
The first is that they own the land surrounding the station and are pursuing development potential. They are deliberately trying the Hong Kong MTR model here. This should help, but if they do it right (like the MTR does it), they'll be able to make money on rail revenues alone, with development being the cherry on top.
But the big one is the growth of the line. The dirty secret in HSR is that fast trains are valuable not because of their top speed, but rather because of how their acceleration enables more stops with minimal negative impact to their schedule. The revenue of a line tends to grow polynomially (where the polynomial is > 1) with the length and the number of stops, whereas the speed decreases logarithmically. The value of a Miami to Ft Lauderdale line is tiny, with the market defined by the people who are going from Miami to Ft Lauderdale. But as the line grows, the market definition will include anybody with travel demand found in the cartesian product of {Miami, Ft. Lauderdale, Boca Raton, Pompano Beach, Palm Beach, Orlando}. That market is huge, and this segment is just the beginning.
Also, this I think is more geared for tourist traffic than daily commute traffic. Orlando for the parks, West Palm Beach for the shopping (my guess), Ft. Lauderdale and Miami for the cruise ships.
Not in the slightest. Every successful HSR system in the world has plenty of stops in what most people would consider trivial towns. And they all regularly run on average well below their top speed because of it. Those aren't pointless stops; when put in the context of the rest of the cartesian network, they provide significant enough revenue to justify their own existence.
This is true for both HSR lines that are publicly owned as well as pure private systems like in Japan...in other words, they aren't there for political reasons. In fact, the most financially successful lines in the world happen to have the most stops in <50k population towns. If there is any political influence in the matter, it is doing the opposite and passing up stops with little political power, to their financial detriment. Like I said, the real reason for the power in HSR is acceleration, not top speed.
The only thing that defeats the purpose of HSR is when they don't make enough money to justify their existence, making them eventually go away.
(nb - from Cocoa)
https://archpaper.com/2018/01/floridas-brightline-private-ra...
http://www.clara.com.au/the-clara-plan.html
Bold plan but I hope they can see it through.
It's basically sacrilege to invest in infrastructure other than coal power plants in this country.
Streetcars, in the sense that they're being implemented in North America are no faster than buses in mixed traffic. What they mostly lend is the idea of permanently high frequency transit, which is a positive sign for developers although not as useful for residents as light rail.
These lines stuck around until the late 1950s, and had dedicated lane ownership. The city I live in is small and was demolished by urban renewal, so as suburbs that were a 15 minute drive away developed, the system declined with the central business district.
Hong Kong leverages this: https://www.mckinsey.com/industries/capital-projects-and-inf...
This ferengi formula goes way over my head. Here we just have government sponsored trains that take people places and costs what it costs. It all runs on wind. After doing the very bussy part of the trip you get to see giant trains with 1 or 2 passengers at 30 min interval. I think cheap parking for cleaning and maintanace alone makes it worth rolling them to barely habited areas.
> A one-way ticket initially will cost $10 compared with a trip on Uber that can cost $40 or more.
The price will go up after people are addicted to the convenience and luxury if it's superior to the alternatives.
> Real-time fares are displayed online and vary based on demand, day, time, service (Select or Smart), cities and Special Requests. During our introductory period, rides as low as $10 one way will continue to be available, but only for limited trains while seats last. Book now!
http://www.sun-sentinel.com/news/transportation/fl-reg-brigh...
What are we missing?
If we had the option, instead, to pay $100 per person to ride up on a relaxing train, we'd probably be taking the kids every other weekend over the summer.
Alternatively, taking a slightly more cynical outlook, they might be gambling on a hurricane evac windfall or two. As Irma approached we evac'd our family to Orlando, but the drive that usually took 3 hours turned into 12 hours of bumper-to-bumper nightmare. Flights out of MIA and FLL that usually cost $300 or $400 jumped in price to over $3500 literally overnight. For even $400 we probably would've opted for the train.
Or go around the east side of Lake Okeechobee at South Bay, 98/441. Less civilization, more tourist traffic and having to deal with passing zones... but still a nicer ride than the Turnpike.
Either way takes a bit longer but the scenery is nicer. For middle Florida values of nice scenery, anyway -- I greatly prefer the mountains.
Last year in the UK I helped optimise a ppc campaign for Centre Parcs (up market forest holidays) and they found that almost all customers would only drive < 2hours.
So I knocked up a simple Perl system that used the lat and long of every post town/place in the country and worked out the as the crow flies distance to each site.
That is like half way from SF to Tahoe on Friday after work.
more people traveling in train instead of personal car will also reduce co2 in air which is eco friendly too.
less traffic means there is a wide and safe road for bicycle rider and people who like to walk.
one big benefit of travel throw train is time. you can be on place on estimated time. due to less traffic.
All my comments are based on my experience, I am traveling throw train for work, here in tokyo.
Nothing. This is a bad business model.
I know it is astounding, but sometimes people with lots of money can make stupid decisions with that money.
[1] https://www.theguardian.com/technology/2017/sep/01/juicero-s...
[2] https://www.marketwatch.com/story/betsy-devoss-family-lost-1...
It might take some time for development to build around the idea of this form of transit as people reconfigure their live-work arrangements around it but it should be do-able. Hopefully the local ordinances are adjusted to allow for this reconfiguration.
Owning a car is becoming a major, but necessary, liability for those that don’t have mass transit.