9 ms·

At $10 a ticket sounds like they would need to move ~32k passengers every day for 10 years to break even on the $1.2B purely from tickets. I wonder what other

• mrfusion 8y ago
  I checked your math and it seems correct. I don’t get it. I could see them possibly moving a few thousand passengers a day but 32k seems out of the question? What are we missing?
  • jageen 8y ago
    Well they can also generate revenue by advertisement. plus property rate around station will going to be high (it will be great impact on money rotation) 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.
    • mozumder 8y ago
      Advertising revenue is insignificant compared to fare revenue.
      • jageen 8y ago
        I edited my response, sorry I did not see your response before, but my point it is not always about money.
      • innocenat 8y ago
        Ask that to Bangkok BTS system. Fare revenue is roughly equals to advertising revenue.
  • mozumder 8y ago
    A 4 lane highway can move 10,000 people per hour. I don't see 32k people/day as a problem. 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.
    • s0rce 8y ago
      Americans love cars and the roads are heavily subsidized, a 40mi drive will cost a few dollars and you can take 3-6 people.
      • mozumder 8y ago
        Americans hate cars now, which is why they prefer mass transit and ride share.
        • isostatic 8y ago
          Dear SF Bubble, meet the rest of America.
          • mozumder 8y ago
            Yes. SF needs to stop trying to make self-driving cars a thing and catch up to the rest of the country that wants mass transit. Why do SF tech companies keep reinventing the bus??
      • yardie 8y ago
        A new, financed car is approaching $500/mo in payments, insurance, and petrol. The price of a well equipped Camry is over $30k. And dealers are turning to more exotic financing terms to keep people buying; 6 and 7 year financing is becoming more common just to keep the payments down. Owning a car is becoming a major, but necessary, liability for those that don’t have mass transit.
        • 8y ago
  • Shelnutt2 8y ago
    Florida East coast railways, owner and operator of Brightline also the owns the tracks this runs on. As part of Brightline they have done a lot of track work and will eventually be doubling the tracks from Miami up the coast and adding the new track to Orlando. I suspect they are capitalize these cost under Brightline but will take advantage for the freight business too. That could account for some if the math not seeming to make business sense.
  • mhuffman 8y ago
    > What are we missing? Nothing. This is a bad business model.
    • vinceguidry 8y ago
      So all those investors are idiots?
      • mattnewton 8y ago
        See sibling comments about property investments
      • mhuffman 8y ago
        Yes! 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-silicon-valley-shutting-down https://www.theguardian.com/technology/2017/sep/01/juicero-s... [2] https://www.marketwatch.com/story/betsy-devoss-family-lost-100-million-in-theranos-investment-2018-05-03 https://www.marketwatch.com/story/betsy-devoss-family-lost-1...
  • jballanc 8y ago
    As a resident of South Florida, I'm guessing they're banking on the eventual Orlando connection. Many of the theme parks in Orlando offer very attractive discounts for Florida residents, especially in the off season, but speaking personally, our family has refrained from taking more advantage due to the drive. From Miami to Broward traffic can be a nightmare, and then from Broward to Orlando the Florida Turnpike is surrounded by...nothing. For two hours of drive time the only signs of civilization are the rest areas on the Turnpike (which, admittedly, are undergoing major updates, but still have limited offerings). 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.
    • s0rce 8y ago
      Sounds just like the SF<->LA drive along I-5, traffic, then nothing for a long time (western edge of the San Joaquin valley), then more traffic. Yet people still do it. Currently the coastal train route is very slow and expensive, the inland train stops at Bakersfield, hours from LA. The best option is to fly until the eventual high speed rail.
      • wtvanhest 8y ago
        I've done both drives. The FTL to Orlando drive is so easy in comparison that, I'm not sure they are comparable at all. Its only 3 hours from FTL to downtown Orlando. That is like half way from SF to Tahoe on Friday after work.
    • tbyehl 8y ago
      As a former South Floridian who used the heck out of my Disney passes for the ~15 months I had them... US-27 is the way to go. Much less stressful and you're never far from civilization from South Bay on up. Can get a bit trafic-y around Sebring but generally it's an easy smooth drive. 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.
• newnewpdro 8y ago
  They clearly state right in the article: > 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.
  • smelendez 8y ago
    Yes, they've effectively said the prices will go up, especially during peak times. http://www.sun-sentinel.com/news/transportation/fl-reg-brightline-vip-ride-20180109-story.html http://www.sun-sentinel.com/news/transportation/fl-reg-brigh...
  • squeaky-clean 8y ago
    Why is this downvoted? Even on Brightline's website they say the $10 fare is only for an an "Introductory period" > 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! https://gobrightline.com/F-A-Q https://gobrightline.com/F-A-Q
• msmithstubbs 8y ago
  Do they own the stations the train operates from? If this is successful those stations could be some valuable real estate and generate revenue, too. Hong Kong leverages this: https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/the-rail-plus-property-model https://www.mckinsey.com/industries/capital-projects-and-inf...
  • ceejayoz 8y ago
    I suspect that's a major part of this. The article mentions them having a new MiamiCentral station, which involves six blocks of real estate holdings.
  • dnautics 8y ago
    Judging from Singapore's experience it aligns the needs of the passenger with the developer; as a commuter in Singapore you pretty much are guaranteed a drugstore, grocery store, or hawker section on the last mile of your trip.
• avn2109 8y ago
  It's because this ticket price is a loss leader, of course. They're hoping to build ridership/mindshare now and then jack up the prices later.
• desdiv 8y ago
  >Fortress Investment Group, the parent company of the Brightline, is hedging that its investment in new transit hubs will increase property values surrounding stations as well as revenue generated by real estate development. Forrest Investment Group is already building more than 800 high-priced rentals at its Miami station and close to 300 in West Palm, in tandem with new skyscrapers dedicated to commercial and retail functions. https://archpaper.com/2018/01/floridas-brightline-private-rail-opens/#gallery-0-slide-0 https://archpaper.com/2018/01/floridas-brightline-private-ra...
  • Spooky23 8y ago
    Funny. I just listened to a lecture about streetcars in my city. The owner of the first streetcar company just happened to be an at-large councilman whose family happened to own the farms adjacent to the route the car line took.
    • ComradeTaco 8y ago
      Generally, if you're serious about getting people were they need to be quickly, you use light rail technology and principles. 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.
      • Spooky23 8y ago
        Oh sure. I’m talking about lines built in 1890-1925 to take folks from the center business district to 1-4 family detached housing. 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.
  • prawn 8y ago
    There's talk of a remotely similar venture in Australia connecting Melbourne and Sydney ("via" Canberra), and establishing up to eight greenfield cities along the route. http://www.clara.com.au/the-clara-plan.html http://www.clara.com.au/the-clara-plan.html Bold plan but I hope they can see it through.
• rayiner 8y ago
  They’re using the Hong Kong/Japan model. They own land along the route and are already doing a lot of high density development around the Miami station. 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.
  • sandworm101 8y ago
    Except that a transit system is now subject to the property market. And creates perverse incentives. Instead of servicing people today (dense areas with higher prices) the best returns are to service low-density areas and profit on the rise you create. That wouldn't address current a traffic problem. It's biulding the 'bridge to nowhere' over expanding current capacity. Id rather a model based on profits, not another leveraged property scheme.
    • ComradeTaco 8y ago
      Transit isn't really intended to solve traffic problems, transit is basically a work around to allow cities to scale in spite of traffic.
    • StudentStuff 8y ago
      Large swaths of the East Coast were initially developed on this model, going from farmland to dense MDUs surrounding trolley and train stations. Why is smart growth so off-putting to you?
      • bobthepanda 8y ago
        And now we fund large, tax-break dependent business and entertainment districts on train yards rather than solve existing capacity and commuting issues within the current system. There are great economic effects in improving the commute of 100,000 people by ten to fifteen minutes, but that's not easy for a property developer to capture, so it's not a good project. 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.
• saosebastiao 8y ago
  I'd rather not go into much depth, because I could probably write for a few days on the economics of train transportation, but there are two aspects that are key here: 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.
  • spc476 8y ago
    Where did you read that it (the Brightline) stops in Boca Raton and Pompano Beach? I heard that it only has four stops----Miami, Ft. Lauderdale, West Palm Beach and (eventually) Orlando.
    • saosebastiao 8y ago
      I could have sworn that I read about a station being planned right in between the two cities, but I can't find anything about it now. I wouldn't be surprised to see something like that in the future though, along with some of the cities that are heavily lobbying for stops (St Lucie/Fort Pierce, Palm Bay, Cocoa, and possibly even Jacksonville and Tampa)
      • spc476 8y ago
        It defeats the purpose of "high speed" if you can't actually get to "high speed" due to stops. 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.
• daddosi 8y ago
  What happens after 10 years? Or is 10% per year some investment standard? 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.
• H1Supreme 8y ago
  So, $400 a month, assuming one uses this to commute? That sounds like quite a bit more than gas + parking for most people. Especially if it's a 4 cylinder with good mileage.
  • walshemj 8y ago
    well in the UK the commute from my town to London (about 65 miles) is over $600
  • ghaff 8y ago
    That's very normal in a lot of places. If I commuted daily into Boston from the western suburbs where I live (I don't actually work in the city), I'd be $380 for a monthly rail pass, another $60 or so for daily parking, and another $75/month if I needed to use the subway to get from the train station to an office.