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When I lived in Tartu, Estonia, there were two free, privately operated bus routes circling through town, they had several convenient stops, one of them happeni
by dusted 6y ago
When I lived in Tartu, Estonia, there were two free, privately operated bus routes circling through town, they had several convenient stops, one of them happening to be the large shopping center that operates the line.
We often used these busses, just to get around town, and, well, sometimes to get to the shopping center.
Seen isolated, these bus lines were losing money, they made literally no profit, all expense, no ticket sales.
Them being free, however, was not charity, their presence generated so much additional revenue in the respective shopping-centers that it made sense to run them.
As far as I understand, they were funded through the rent paid by the shops in the centers. So "transporting customers to your shop location" was included in the rent, neat.
Now, in more taxed countries, like Denmark, a goverment-run model would work as well in more populated areas, as transportation becomes free, people become more mobile, and will travel more often to buy goods, and more sales-taxes result.
- jariel 6y agoThis argument has to work against the fact that the 'stuff' in the shops is x% more expensive because they are paying for their bus on the backend. Do you think a transportation system that is perversely incented and controlled by 'the shopping mall' to do specific things, subject to all sorts of weird policies ... is going to be more efficient than simply reducing the price of goods and allowing travellers to pay themselves - and decide for themselves where they want to travel and for what purpose? Getting the capital costs sorted out for these things is hard, the shopping mall would have been one of the few places to foot the initial bill - that's probably why it happened the way it happened. But it probably would have been more efficient for some state actor to step in and provide the means for it to work more broadly.
- dusted 6y agoYes, of course the money is coming from the goods sold, and so is the money for all other expenses the shops have. This is highly offset by the lower property price of being able to place the shop outside the city center (and the additional convenience of being located right next to the highest-traffic road). So goods were still cheaper in the shopping center than in the stores located in the city-center. I didn't say this would be the most efficient solution, I just wanted to point out that asking if a transportation infrastructure is profitable, and only looking at it in isolation is silly, because the value it adds to the areas around its stops can highly outweigh the cost of operating it.