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This is a lot more complicated than your pithy quote is making it sound. Japan has a mix of public, private, and quasi-private railways, and while many of them

This is a lot more complicated than your pithy quote is making it sound. Japan has a mix of public, private, and quasi-private railways, and while many of them are profitable on a cash-flow basis, that's only because the government assumed (and passed to taxpayers) the majority of the debt of the former public railway entity (which was mainly from costs of construction) as part of the privatization program in the 80s and 90s. This amounted to something like 30 billion dollars that the companies didn't have to pay.

norgie 4y ago
+1 - add in that they also get a lot of money from developing land adjacent to their rail lines, and operating things department stores, apartments, bus lines, etc. They don't get all their money from providing rail services.
- csdreamer7 4y ago
  I barely remember that, but that is how the old dos game A-train was based off of.
- _dain_ 4y ago
  Yeah, although IIRC some/many Japanese railways are still profitable even discounting the land development interests. Twitter trainman @380kmh has written about this but I can't find the thread right now. It's just the private version of transit-oriented development[1]. It's a good way to align incentives. The railway increases the value of the land around the stations, so the railway company gets to enjoy some of that benefit. Having the most salient product/service as a loss-leader for the real money-maker behind the scenes is a very common business strategy. Hell, it's how American railroads got built in the old West. It's how London became Greater London. Many governments seem to have forgotten this basic stuff ... they'll do silly things like keep restrictive low-density anti-retail zoning codes in the areas around train stations. And then they wonder why the promised benefits of the railway didn't arrive and people still drive everywhere. Or they won't see any benefit to pre-emptively expanding the network into new places because "nobody lives there", reversing cause and effect. [1] https://en.wikipedia.org/wiki/Transit-oriented_development https://en.wikipedia.org/wiki/Transit-oriented_development
waboremo 4y ago
Yeah it's really interesting. Something like a substantial portion of profits come predominantly from the bullet trains and non-transportation businesses (like JR West Hotels). But not all regions are as lucky, so government assistance has still been called on. Specifically about the bullet trains, they are absurdly efficient in speed, they had to outpace air travel. Absurd speeds incredibly early on, and to this day only really China has surpassed them in terms of nation coverage and speed - a dominance Japan held onto for a good 50 years. Fascinating to learn about, but not so great to apply blindly to other places.
- astrange 4y ago
  The Shinkansen is actually more expensive than domestic flights though. I don't think the people asking for HSR in America realize this; it's more convenient, more comfortable, faster up to some distance (because you don't have to go to the airport), and usually full, but it's basically business class travel.
  - amrocha 4y ago
    The shinkansen is not equivalent to business class travel. Flights between Tokyo and Osaka cost roughly half of a shinkansen ticket, but that doesn't include transport to and from the airport. It also takes way more time to fly, including transit time to and from the airports. The average person is willing to spend an extra 10000 yen to save 2-3 hours and the hassle of a flight. Funnily enough, the business travelers I know in Japan actually take the plane, because it's cheaper for the company and they can keep the miles.

norgie 4y ago

+1 - add in that they also get a lot of money from developing land adjacent to their rail lines, and operating things department stores, apartments, bus lines, etc. They don't get all their money from providing rail services.

csdreamer7 4y ago
I barely remember that, but that is how the old dos game A-train was based off of.
_dain_ 4y ago
Yeah, although IIRC some/many Japanese railways are still profitable even discounting the land development interests. Twitter trainman @380kmh has written about this but I can't find the thread right now. It's just the private version of transit-oriented development[1]. It's a good way to align incentives. The railway increases the value of the land around the stations, so the railway company gets to enjoy some of that benefit. Having the most salient product/service as a loss-leader for the real money-maker behind the scenes is a very common business strategy. Hell, it's how American railroads got built in the old West. It's how London became Greater London. Many governments seem to have forgotten this basic stuff ... they'll do silly things like keep restrictive low-density anti-retail zoning codes in the areas around train stations. And then they wonder why the promised benefits of the railway didn't arrive and people still drive everywhere. Or they won't see any benefit to pre-emptively expanding the network into new places because "nobody lives there", reversing cause and effect. [1] https://en.wikipedia.org/wiki/Transit-oriented_development https://en.wikipedia.org/wiki/Transit-oriented_development

waboremo 4y ago

Yeah it's really interesting. Something like a substantial portion of profits come predominantly from the bullet trains and non-transportation businesses (like JR West Hotels). But not all regions are as lucky, so government assistance has still been called on. Specifically about the bullet trains, they are absurdly efficient in speed, they had to outpace air travel. Absurd speeds incredibly early on, and to this day only really China has surpassed them in terms of nation coverage and speed - a dominance Japan held onto for a good 50 years. Fascinating to learn about, but not so great to apply blindly to other places.

astrange 4y ago
The Shinkansen is actually more expensive than domestic flights though. I don't think the people asking for HSR in America realize this; it's more convenient, more comfortable, faster up to some distance (because you don't have to go to the airport), and usually full, but it's basically business class travel.
- amrocha 4y ago
  The shinkansen is not equivalent to business class travel. Flights between Tokyo and Osaka cost roughly half of a shinkansen ticket, but that doesn't include transport to and from the airport. It also takes way more time to fly, including transit time to and from the airports. The average person is willing to spend an extra 10000 yen to save 2-3 hours and the hassle of a flight. Funnily enough, the business travelers I know in Japan actually take the plane, because it's cheaper for the company and they can keep the miles.