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The business entity that owns the subway being profitable is not the same as the subway being profitable. MTR for instance is a real estate developer as well as

The business entity that owns the subway being profitable is not the same as the subway being profitable. MTR for instance is a real estate developer as well as a subway operator: "As compensation for the cost of building railway networks, the government grants the MTR Corporation land development rights along its rail lines, stations and depots – an increasingly lucrative business in recent years amid a red-hot property market." https://www.scmp.com/news/hong-kong/economy/article/2136403/mtr-corp-announces-64-cent-rise-net-profit-hk168-billion https://www.scmp.com/news/hong-kong/economy/article/2136403/...

aylmao 8y ago
Isn't that part of the problem? Correct me if I'm wrong, but I recall hearing from someone that the MTA sold a good portion of its real estate and so lost sources of income. I'm not all knowledgeable in this, so if someone who knows more of its history can chime in please do.
notSupplied 8y ago
It's well understood by the locals that the Hong Kong (and possibly other Asian cities) system reaps most of it's revenue from land rights around/immediately above the stations. In In Asia transit hubs are often also retail hubs and the commercial rents become profit for the public transit system. This makes perfect sense as the retail value of the nearby land can most obviously be credited to the transit system. I'd imagine that the problem with the United States is that this real estate was sold early on or was never owned by by the transit system allowing the spillover benefits of transit hubs to be captured by private interests.
- robben1234 8y ago
  Yeah, majority of Hong Kong subway stations has malls on premise. Not sure it's owned by MTR too, but it's there.
darksaints 8y ago
Farebox recovery ratio is not a measure of net profit, it is a measure of operating profit specifically for transit assets, with only fares counting as revenues. In other words, the MTR's subway lines are profitable entirely by themselves. The real estate profits are just a cherry on top.

aylmao 8y ago

Isn't that part of the problem? Correct me if I'm wrong, but I recall hearing from someone that the MTA sold a good portion of its real estate and so lost sources of income. I'm not all knowledgeable in this, so if someone who knows more of its history can chime in please do.

notSupplied 8y ago

It's well understood by the locals that the Hong Kong (and possibly other Asian cities) system reaps most of it's revenue from land rights around/immediately above the stations. In In Asia transit hubs are often also retail hubs and the commercial rents become profit for the public transit system. This makes perfect sense as the retail value of the nearby land can most obviously be credited to the transit system. I'd imagine that the problem with the United States is that this real estate was sold early on or was never owned by by the transit system allowing the spillover benefits of transit hubs to be captured by private interests.

robben1234 8y ago
Yeah, majority of Hong Kong subway stations has malls on premise. Not sure it's owned by MTR too, but it's there.

darksaints 8y ago

Farebox recovery ratio is not a measure of net profit, it is a measure of operating profit specifically for transit assets, with only fares counting as revenues. In other words, the MTR's subway lines are profitable entirely by themselves. The real estate profits are just a cherry on top.