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In Tokyo, the rail transit system (including subways) is operated by a network of private companies. These train operators make a net profit from fares and othe

by pzone 8y ago

In Tokyo, the rail transit system (including subways) is operated by a network of private companies. These train operators make a net profit from fares and other revenues, and the system is generally well liked by its customers. Even if the idea of privatization makes you cringe, the idea that public transit is inevitably a money pit or loss leader is misguided. https://www.citylab.com/transportation/2011/10/why-tokyos-privately-owned-rail-systems-work-so-well/389/ https://www.citylab.com/transportation/2011/10/why-tokyos-pr...

rayiner 8y ago
The key difference with Tokyo probably isn't privatization, but that the rail operators own the land around the stations, so often get to charge both ends of each trip: the rider and the business the rider travels to.
- geezerjay 8y ago
  Sounds like a smart policy: the railway operator is pressured to serve areas where there is actually demand for the service, thus avoiding wasteful spending building non-performing lines, and is pressured to provide quality services to keep real estate prices up.
bobthepanda 8y ago
It's worth noting that they got there because at the time of development, the rail companies were able to buy up the surrounding land and develop that. They reinvested their real estate profits into more rail and more real estate, creating a virtuous cycle. (Hong Kong, one of the only other profitable systems, did something similar by having the government effectively transfer land for free initially.) American rail systems largely didn't develop around their stations, and if they bothered to develop around their stations they sold the land after construction and that was it. For them to do so today would require billions, if not tens of billions of dollars to provide fair compensation for eminent domain for land and property around stations. And that's before the legal costs to fight all the resulting litigation, if they even were allowed to do it.
- tellarin 8y ago
  That’s actually the same model the Hong Kong MTR company applies for the subway lines it manages in mainland China (like lines 4, 14, and 16 in Beijing). Buy land right where lines will pass and near stations and develop it.
  - bobthepanda 8y ago
    I don't disagree. But the MTR is able to do that in China because they already make money in Hong Kong. No North American transit operator makes money, so they have no way to buy up land in the first place.
- nappy 8y ago
  so American rail in the 1870's
SatvikBeri 8y ago
Well, Japan privatized rail in the 90s, well after the majority of the rail was built using billions of dollars of investment by the Japanese government. So I don't know if it's really correct to call this a success of privatization, considering that the major costs were basically socialized.

by pzone 8y ago

rayiner 8y ago

The key difference with Tokyo probably isn't privatization, but that the rail operators own the land around the stations, so often get to charge both ends of each trip: the rider and the business the rider travels to.

geezerjay 8y ago
Sounds like a smart policy: the railway operator is pressured to serve areas where there is actually demand for the service, thus avoiding wasteful spending building non-performing lines, and is pressured to provide quality services to keep real estate prices up.

bobthepanda 8y ago

It's worth noting that they got there because at the time of development, the rail companies were able to buy up the surrounding land and develop that. They reinvested their real estate profits into more rail and more real estate, creating a virtuous cycle. (Hong Kong, one of the only other profitable systems, did something similar by having the government effectively transfer land for free initially.) American rail systems largely didn't develop around their stations, and if they bothered to develop around their stations they sold the land after construction and that was it. For them to do so today would require billions, if not tens of billions of dollars to provide fair compensation for eminent domain for land and property around stations. And that's before the legal costs to fight all the resulting litigation, if they even were allowed to do it.

tellarin 8y ago
That’s actually the same model the Hong Kong MTR company applies for the subway lines it manages in mainland China (like lines 4, 14, and 16 in Beijing). Buy land right where lines will pass and near stations and develop it.
- bobthepanda 8y ago
  I don't disagree. But the MTR is able to do that in China because they already make money in Hong Kong. No North American transit operator makes money, so they have no way to buy up land in the first place.
nappy 8y ago
so American rail in the 1870's

SatvikBeri 8y ago

Well, Japan privatized rail in the 90s, well after the majority of the rail was built using billions of dollars of investment by the Japanese government. So I don't know if it's really correct to call this a success of privatization, considering that the major costs were basically socialized.