4 ms·

> Public rail is a money-losing venture, ... But it's important to have. Just how much money-losing depends on the political environment and skill of the manage

> Public rail is a money-losing venture, ... But it's important to have. Just how much money-losing depends on the political environment and skill of the management. Arguably, all public rail should lose money. Quality transportation is a huge economic driver of regional economies. If a rail service is making money, it likely means governments are underinvesting in their own economies.

atoav 8y ago
It usually also means that public transport is too expensive for those who are in need of it the most (e.g. people who can’t afford a car or for whom owning a car doesn’t make any sense — which is arguably more common in Europe than the US)
close04 8y ago
It usually does. Actually I am not familiar with one example where public rail actually makes a profit, in real terms. All public rail systems I know or have read about are subsidized by the state either directly or via subsidizing the fare for the traveler (or both).
- Gibbon1 8y ago
  Years ago I read an article where the author argued that between network effects and indirect beneficiaries of transportation services markets are extremely sub-optimal. Also the value of the service varies widely as well. One box contains a toaster anotherbox contains a vital part needed to get a machine shop back up and running.
- atoav 8y ago
  I think we should stop counting profit as “how much tickets you sold” minus “how much money you spent”, but look at the effects of a public train system on the whole economy. I grew up in the Alps and I can guarantee that certain very profitable touristic locations wouldn’t even remotely work if there was no affordable and reliable train network that connected them to a airport, unless you want to turn some alpine area into a huge parking lot. On the same line that connects that spot to the cities there might be ten completely uninteresting villages whose population kinda relies on these trains to e.g. go to school, go shopping in the city etc. Some lines might not have any touristic benefit, but they raise the value of the whole network because it increases the destinations you can reach via train. In nations that have high petrol prices and where train networks already exist, train networks can be unprofitable and still boost economy as a whole. The question is: should everybody finance everybody elses mobility to a certain degree when it benefits economy as a whole? For me the answer is quite clear. I grew up in small village in some valley in the alps. Without affordable public transport I would have been devastated as a teenager. A profitable train network usually takes that profit from somewhere and that somewhere is typically public. I’d rather have an unprofitable train network that works, paid by my taxes than a profitable that doesn’t work even if I were prepared to pay for it. Same goes for Internet, Mobile networks, Water, Electricity.
  - close04 8y ago
    That wasn't my point. I only highlighted the fact that indeed they operate at a loss and the companies themselves or the price of the ticket are partially funded/subsidized by the state. This is why I suggested they don't make a profit "in real terms", meaning actual profit in the company's financial report, not indirect effects. You don't seem to contradict this despite the downvote. The point was not to debate whether this is a good move or not, if it stimulates an economy or not, etc. I live in a country here the rail system is heavily subsidized and I'm happy for it as it is.
    - atoav 8y ago
      Sorry if I read something into your post that you didn’t intend to say. Lack of profit is often used as an argument against public transport in discussions, especially from people who grew up in places where cars ar the norm, petrol is cheap and there is no real public transport (e.g. the US). Sorry if I misrepresented your post.
kmlx 8y ago
> TOKYO -- East and West Japan Railway have both forecast record profits for the fiscal year ending March 2018, anticipating more bullet train passengers and higher income from real estate and other noncore operations. > West Japan Railway said Friday it expects a group net profit of 109 billion yen ($978 million) for the fiscal year through March 2018, up 19% on the year. Full article: https://asia.nikkei.com/Editor-s-Picks/Japan-Update/JR-East-West-on-track-for-record-profit https://asia.nikkei.com/Editor-s-Picks/Japan-Update/JR-East-... JR East annual report: https://www.jreast.co.jp/e/investor/ar/2018/pdf/ar_2018-all.pdf https://www.jreast.co.jp/e/investor/ar/2018/pdf/ar_2018-all....
- skriticos2 8y ago
  Yes, but Japan also has trice the population density of France and most of the people are focused in the gargantuan city landscapes like the greater Tokyo bay area. Makes it a lot easier to saturate the trains while maintaining a reasonable timetable.
- adev_ 8y ago
  JR rails makes an important part of its benefits from the huge commercial centers (Atrée & others) they run in their stations. That's a model that works in Japan, but cannot run everywhere. Not every country is a tiny island with such a dense urbanisation.
  - Silhouette 8y ago
    I read an interesting article about this a while back. Something distinctive about the Japanese rail culture is that they build lots of communal facilities right next to their stations. For example, people routinely stop and do their shopping on the way home from work, even though they're getting home by train (though this idea isn't just about shops). Compare that to typical Western railway stations, where a huge amount of the prime real estate right next to the trains is used for giant car parks, and you can see that the success of their model is no accident. Of course, we couldn't trivially adopt the same strategy in the West. Unlike the Japanese, we haven't been designing our towns and cities around this principle for a long time, and as the parent comment notes, we also don't have the same density. That means we do need ways for people to get to the station from the surrounding area. Often good alternatives to the car are still lacking in the West, which then creates an unfortunate chicken and egg scenario. But that doesn't mean the Japanese model isn't potentially better than ours, if only we could find a viable path from one to the other.

atoav 8y ago

It usually also means that public transport is too expensive for those who are in need of it the most (e.g. people who can’t afford a car or for whom owning a car doesn’t make any sense — which is arguably more common in Europe than the US)

close04 8y ago

It usually does. Actually I am not familiar with one example where public rail actually makes a profit, in real terms. All public rail systems I know or have read about are subsidized by the state either directly or via subsidizing the fare for the traveler (or both).

Gibbon1 8y ago
Years ago I read an article where the author argued that between network effects and indirect beneficiaries of transportation services markets are extremely sub-optimal. Also the value of the service varies widely as well. One box contains a toaster anotherbox contains a vital part needed to get a machine shop back up and running.
atoav 8y ago
I think we should stop counting profit as “how much tickets you sold” minus “how much money you spent”, but look at the effects of a public train system on the whole economy. I grew up in the Alps and I can guarantee that certain very profitable touristic locations wouldn’t even remotely work if there was no affordable and reliable train network that connected them to a airport, unless you want to turn some alpine area into a huge parking lot. On the same line that connects that spot to the cities there might be ten completely uninteresting villages whose population kinda relies on these trains to e.g. go to school, go shopping in the city etc. Some lines might not have any touristic benefit, but they raise the value of the whole network because it increases the destinations you can reach via train. In nations that have high petrol prices and where train networks already exist, train networks can be unprofitable and still boost economy as a whole. The question is: should everybody finance everybody elses mobility to a certain degree when it benefits economy as a whole? For me the answer is quite clear. I grew up in small village in some valley in the alps. Without affordable public transport I would have been devastated as a teenager. A profitable train network usually takes that profit from somewhere and that somewhere is typically public. I’d rather have an unprofitable train network that works, paid by my taxes than a profitable that doesn’t work even if I were prepared to pay for it. Same goes for Internet, Mobile networks, Water, Electricity.
- close04 8y ago
  That wasn't my point. I only highlighted the fact that indeed they operate at a loss and the companies themselves or the price of the ticket are partially funded/subsidized by the state. This is why I suggested they don't make a profit "in real terms", meaning actual profit in the company's financial report, not indirect effects. You don't seem to contradict this despite the downvote. The point was not to debate whether this is a good move or not, if it stimulates an economy or not, etc. I live in a country here the rail system is heavily subsidized and I'm happy for it as it is.
  - atoav 8y ago
    Sorry if I read something into your post that you didn’t intend to say. Lack of profit is often used as an argument against public transport in discussions, especially from people who grew up in places where cars ar the norm, petrol is cheap and there is no real public transport (e.g. the US). Sorry if I misrepresented your post.

kmlx 8y ago

> TOKYO -- East and West Japan Railway have both forecast record profits for the fiscal year ending March 2018, anticipating more bullet train passengers and higher income from real estate and other noncore operations. > West Japan Railway said Friday it expects a group net profit of 109 billion yen ($978 million) for the fiscal year through March 2018, up 19% on the year. Full article: https://asia.nikkei.com/Editor-s-Picks/Japan-Update/JR-East-West-on-track-for-record-profit https://asia.nikkei.com/Editor-s-Picks/Japan-Update/JR-East-... JR East annual report: https://www.jreast.co.jp/e/investor/ar/2018/pdf/ar_2018-all.pdf https://www.jreast.co.jp/e/investor/ar/2018/pdf/ar_2018-all....

skriticos2 8y ago
Yes, but Japan also has trice the population density of France and most of the people are focused in the gargantuan city landscapes like the greater Tokyo bay area. Makes it a lot easier to saturate the trains while maintaining a reasonable timetable.
adev_ 8y ago
JR rails makes an important part of its benefits from the huge commercial centers (Atrée & others) they run in their stations. That's a model that works in Japan, but cannot run everywhere. Not every country is a tiny island with such a dense urbanisation.
- Silhouette 8y ago
  I read an interesting article about this a while back. Something distinctive about the Japanese rail culture is that they build lots of communal facilities right next to their stations. For example, people routinely stop and do their shopping on the way home from work, even though they're getting home by train (though this idea isn't just about shops). Compare that to typical Western railway stations, where a huge amount of the prime real estate right next to the trains is used for giant car parks, and you can see that the success of their model is no accident. Of course, we couldn't trivially adopt the same strategy in the West. Unlike the Japanese, we haven't been designing our towns and cities around this principle for a long time, and as the parent comment notes, we also don't have the same density. That means we do need ways for people to get to the station from the surrounding area. Often good alternatives to the car are still lacking in the West, which then creates an unfortunate chicken and egg scenario. But that doesn't mean the Japanese model isn't potentially better than ours, if only we could find a viable path from one to the other.