All Transportation Requires WELFARE, Always Has / Part III Why Transportation sucks in America
Update: Virgin has since got out of the Brightline deal.
In Part I, I went over the results of us having the transportation built for you to consume as much oil as possible. In Part II, I pointed out how the propaganda is there to convince you that driving is the best thing since sliced bread. Now in Part III, I explain how all Transportation Requires Welfare for we as a society don't believe in this reality.
Like the title says, all transportation requires welfare and always has needed subsidies of some form or another. People don’t understand this nor want to understand that for the whole of civilization, all transportation requires some form of welfare. The reason why we don’t accept this reality is because we hold onto the myth that it’s the private sector’s job to provide transportation services which omits the fact that the infrastructure that the private sector uses to earn money on is built and paid for by governments.
So how did we get here believing in the myth that it’s the private sector job to provide transportation services? It all started because of how public transportation began here in the United States. At the turn of the 20th Century, the streetcar companies were popping up everywhere and back then, if you provided a public service, you were a tax exempt entity. Well a Republican President Teddy Roosevelt did away with those transportation companies being tax exempt entities. Those companies where not there to earn a profit but to be what a shell company is today and to make the rich owner look good. The reason why those transit companies remained in private hands up through the 1960s is because it wasn’t until the 1950’s that inflation started to chip away at the ticket revenue that covered the cost of operations and maintenance.
Now you're probably asking “are there any private companies providing transit services like VIA?” Yes, and they're located in Japan, Hong Kong, and much of East Asia but they don’t earn their profits by ticket fare at all. These companies are actually Real Estate companies and they use their transit as leverage to make their property more valuable. The extra revenue from the developing rights of their property are used to pay for the transit.
Let’s continue; remember all those passenger trains of the first half of the 20th Century? If you ever watch this History Channel show called “Trains Unlimited” which came out in the late 90s, you would have learned that those passenger trains never made a profit. So you’re now asking “why did the railroads operated them?” One, they were forced by the Federal government through the ICC and nearly all of them had a Post Office Car that paid for these passenger trains. The last day of service of many of these private railroad passenger trains was usually the same day the Post Office contract expired.
If you’re smart, you’ve got what’s going on here which is that all transportation requires subsidies in one form or another. The reason why our public transportation sucks is because we hold onto this nonsensical belief that it’s the private sector job to provide these services and any form of welfare is bad. Yet you go all around the world, they don’t cling onto this nonsense. The rest of the world understands that if you want it, you have to pay for it. Europe understands this, Russia understands this, Canada understands this, India understands this, China understands this, and I could go on and on. If you want more bus service, you have to pay for it. If you want passenger trains, you have to pay for it. The rest of the world gets it, we don’t.
When the belief system that welfare is bad and it's the private sector job to provide service and innovation in transportation is taken to it’s logical conclusion, the inevitable solution to our transportation woes are private toll roads. Anyone who has lived in San Antonio for over 20 years will know how unpopular private toll roads are and yet these same people believe that it’s the private sector’s job to provide transportation services of VIA. I have no doubt that many of my readers who are going to disagree with me will point out how private railroads that haul freight makes billions of dollars a year, on how airlines make a profit and how bus companies make money too. The truth is that without the infrastructure provided by the government, they wouldn’t be around except in the big population centers.
Railroads:
The
railroad tracks would not be made possible if it wasn’t for a government
providing the funding at the beginning to lay down their rails. These funding sources were
mainly government backed loans and grants. Today if it wasn’t for the
dredging of harbors by the Army Corp of Engineers, railroads would be a
thing of the past and that’s just one example for when a small regional
railroad is going out of business and that particular railroad is vital to that small community it serves, then the state will come in and bail out that
railroad so it can continue to service that one customer that probably
just receives three or four railcars a month. This is because at the end
of the day, your profit as a freight railroad comes from hauling goods,
not from providing switching services.
And before I get asked about Virgin/Brightline Las Vegas rail plans. For the record, Brightline was loosing money before they made a deal with Virgin and much of their funding for Las Vegas is being provided by the states of Nevada and California.
Airlines:
Airlines are another industry that requires subsidies for they wouldn’t be able to exist without the
federal government providing air traffic control, paying airlines to
serve unprofitable regional airports and maintaining the airports that they serve. Airports are government owned and
although they get revenue from the airplane parking fees, concession
fees and others, they don’t cover the entire costs of airports and air
travel, especially the small regional airports.
Buses:
Buses
are the obviously subsidized form of transportation because bus
companies provide their services on roads that are provided by
governments. But many that would disagree with what I wrote thus far and
will in the comments of this post will point out how competition in the
intercity bus service here in Texas and everywhere else. This has lead
to lowered prices, but this comes at a cost, you can’t get a Greyhound
bus to New Braunfels, Galveston, and the many small towns throughout
rural Texas because once Megabus came to Texas, Greyhound, the main
provider of intercity bus service cut much of the services to those
communities and reduce service to the towns between the major cities in
Texas. But wait, your ticket before Megabus cost up to $40 between San
Antonio and Dallas. My response is yes, today your average ticket price
is $16, but now the service to San Marcos is just two buses per
day (1 in each direction) and cost more to get to San Marcos then it
does to get to Austin, Houston or Dallas.
Local Transit/VIA:
Now
people who think that VIA is a waste of money also tell me that the
reason for VIA sucking is because there’s a lack of competition. Now
VIA’s job isn’t to be competitive, but to provide reliable
transportation services in the city of San Antonio. When private
companies came into other cities to compete against their local transit
services, those private alternatives ended up going out of business. Now
we can get into a lot of “what ifs” conversations about making VIA
compete with another government entity. But if you read my last
paragraph on what competition did to the intercity buses, then you would
know that if it were to happen here in San Antonio, the bus services
will be cut all around town and the only places that you could go to is
everywhere between the Medical Center and Downtown along Fredericksburg
Rd.
Ride Share:
Some
people like to tout that Uber and Lyft are the solution to transit and
the future of Unfortunately if you believe that nonsense, then I
recommend that you change your source for news for Uber has been in the
news lately being reported that it can’t make money. One Toronto Suburb
decided to used Uber to replace it’s fixed route bus service. It became
so popular, that they had to put a cap on the number of rides you could
take per month, the opposite of what transit is suppose to do. In the
end, ride share’s low user cost is due to the investors and once that
investment money dries up, their prices will be to the level of the cost
of a taxi cab ride.
For the record, I will not mention
driverless cars for we’ll discover that they cause more problems than it
will solve and they’re not here yet. The main problems we’ll discover
is that these driverless cars will cause an increase in traffic
congestion, just like Uber and Lyft are doing right now. Urban
transportation isn’t a mode problem or an app problem. It’s a geometry
problem and we’ll discover when driverless cars take over just how
little space we have available to get around.
Toll Roads:
Do toll roads really make money? That is a question that is brought up to me all the time and the answer is "no." According to an Atlantic Article "The True Cost of Driving," is that toll roads don't make money.
"The surprising evidence from road-pricing experiments is that the revenue gathered from tolled lanes often fails to cover the costs of even collecting the tolls and operating the toll-collection system—which means they never come close to paying for the roadway. (To be sure, tolling improves the efficiency of use of the freeway—traffic flows more smoothly, capacity is increased—but the tolls don’t pay for constructing, or even maintaining, the pavement). But again, the highly visible toll-collection mechanism, like the very visible gas tax, creates the illusion that user fees are paying the cost of the system."
Historically, tolls have been used as method of funding construction. If you happen to have driven round Nashville, TN or Lancaster, PA, you would have come across roads that have the name 'Pike' in them. That's because at one time, those roads were toll road and that was the only way for it to be built in the first place. Eventually these roads became free, but the name stuck. Like all toll roads, they really wouldn't be practical if there wasn't a bunch of free roads around feeding traffic.
Outer Space:
Now let’s go out into space and point out how SpaceX and Blue Origins are owned by billionaires and those billionaires deep pockets fund the research that have lead to incredible achievements. Most people don’t know that when Elon Musk started SpaceX, Boeing and Lockheed Martin were consolidating their rocket services. As we go into space, a governmental body will be formed to create a space traffic control system and at first those services will be paid for by a fee on the goods and passengers going to and from space, but planetary governments will eventually end up funding those services. This is because, just like today, an nations economy is based on international trade by having deep harbors, so to in the future your planetary economy is dependent on interstellar trade. Eventually fees won’t cover the cost of the underlying infrastructure if your planetary nation wants to be competitive in the interstellar economy.
So always remember, the next time someone tells you that this transportation project is a waste of money. Let them know that if it wasn't for a government somewhere, they wouldn't have the road they drive on. Point out the fact that if they're really against government waste, then let's reduce the welfare for roads and put them towards private toll roads and other transportation options that increase tax revenue like protected bicycle lanes.
Author's Note: This story was originally posted at attblog.com. That site is now gone and the original story can be found here: https://aatblog210.blogspot.com/p/all-transportation-is-subsidized-always.html
Sources:
The Atlantic - The True Costs of Driving: https://www.theatlantic.com/business/archive/2015/10/driving-true-costs/412237/
Adams Ruins Everything – Why Billionaire Philanthropy is Not So Selfless | truTV: https://youtu.be/KWNQuzkSqSM
Episode #71 // Supply Shock: https://xenetwork.org/xe/episodes/episode-71-supply-shock/
Austin and Northwestern Railroad: https://en.m.wikipedia.org/wiki/Austin_and_Northwestern_Railroad
Interstate Commerce Commission: https://en.m.wikipedia.org/wiki/Interstate_Commerce_Commission
Railway post office: https://en.m.wikipedia.org/wiki/Railway_post_office
The Story of “Micro Transit” Is Consistent, Dismal Failure: https://usa.streetsblog.org/2018/06/26/the-story-of-micro-transit-is-consistent-dismal-failure/
PDF: Harbor Dredging: Issues and Historical Funding: https://www.google.com/url?sa=t&source=web&rct=j&url=https://fas.org/sgp/crs/misc/IN11133.pdf&ved=2ahUKEwiYhODX1ZXmAhUQm1kKHbcBBCQQFjAAegQIBhAB&usg=AOvVaw2QAtp0wUT67plOWKJR3RoC
PDF:
The Shrinking, Rural Intercity Bus Network: A Problem of Immobility for
Rural Residents without Automobiles and Possible Solutions: https://www.google.com/url?sa=t&source=web&rct=j&url=https://planning-org-uploaded-media.s3.amazonaws.com/legacy_resources/divisions/transportation/papercompetition/2015/Cox.pdf&ved=2ahUKEwjlgo3z1pXmAhXPxVkKHQ9HAp4QFjARegQIBhAB&usg=AOvVaw3DMvqQobux2plgySbqrLFT&cshid=1575245700702
Teddy Roosevelt and the Progressive Vision of History: https://fee.org/articles/teddy-roosevelt-and-the-progressive-vision-of-history/
Boeing-Lockheed Rocket Merger Sparks Concern, Legal Challenge: https://www.space.com/1709-boeing-lockheed-rocket-merger-sparks-concern-legal-challenge.html
Feds keep little-used airports in business: https://abcnews.go.com/Travel/feds-airports-business/story?id=8597371
How are airports funded: http://www.tcpilots.org/funding.html
Regional Airports: Challenges, Opportunities: https://www.forbes.com/sites/wheelsup/2010/07/08/regional-airports-challenges-opportunities/#644f1ff01d02
Ohio Rail Development Commission: https://rail.ohio.gov/wps/portal/gov/ordc
Ohio
Rail Development Commission Awarded U.S. Department of Transportation
CRISI Grant to Expand Infrastructure on Indiana & Ohio Railway: https://www.businesswire.com/news/home/20190617005213/en/Ohio-Rail-Development-Commission-Awarded-U.S.-Department
The Transit Experiment that’s a lot like Uber: https://youtu.be/K2HJnIqELZ4
Mark Blyth – A Brief History of How We Got Here and Why: https://youtu.be/tJoe_daP0DE
No matter how much Uber exploits its workers, it still can’t make money: https://www.salon.com/2019/05/13/no-matter-how-much-uber-exploits-its-workers-it-still-cant-really-make-money/
Uber and Lyft have admitted to making traffic worse in some US cities: https://www.vox.com/the-goods/2019/8/6/20757593/uber-lyft-traffic-congestion-pricing?utm_campaign=vox&utm_content=entry&utm_medium=social&utm_source=twitter
List of streetcar systems in the United States: https://en.m.wikipedia.org/wiki/List_of_streetcar_systems_in_the_United_States
‘Uber Was Supposed To Be Our Public Transit’: https://www.citylab.com/transportation/2019/04/innisfil-transit-ride-hailing-bus-public-transportation-uber/588154/?utm_source=twb
no, autonomous cars will not “abolish transit” in dense cities: https://humantransit.org/2014/11/no-autonomous-cars-will-not-abolish-transit-in-dense-cities.html
Are Fully Driverless Vehicles Coming Soon? Doubts, and Smarter Hopes: https://humantransit.org/2016/10/are-fully-driverless-vehicles-coming-soon-reasons-for-doubt.html
Brightline reports $28.3 million loss despite increased ridership in second quarter: https://www.tcpalm.com/story/news/local/shaping-our-future/all-aboard-florida/2018/09/28/brightline-reports-23-8-m-net-loss-despite-increased-ridership/1458621002/
Branson Buys into Brightline: https://www.railwayage.com/passenger/high-performance/branson-bankrolling-brightline/
Billionaire Branson Gets Billions In Bonds To Launch Vegas To California Train Service: https://www.forbes.com/sites/michaelgoldstein/2019/10/31/billionaire-branson-gets-billions-in-bonds-to-launch-vegas-to-california-train-service/#741450f37660
The Driverless Car, an opportunity being missed: http://bikesanantonio.blogspot.com/2018/01/the-driverless-car-opportunity-being.html
San Antonio Has Awarded Businesses with Millions in Free Downtown Parking. Is it an Economic Booster or Corporate Welfare?: https://www.sacurrent.com/the-daily/archives/2019/12/04/san-antonio-has-awarded-businesses-with-millions-in-free-downtown-parking-is-it-an-economic-booster-or-corporate-welfare
Railway post office: https://en.wikipedia.org/wiki/Railway_post_office#Decline_and_withdrawal
Drivers Cover Just 51 Percent of U.S. Road Spending: https://usa.streetsblog.org/2013/01/23/drivers-cover-just-51-percent-of-u-s-road-spending/
Transit’s Not Bleeding the Taxpayer Dry — Roads Are: https://usa.streetsblog.org/2011/12/12/transit’s-not-sucking-the-taxpayer-dry-roads-are/
Gasoline Taxes and Tolls Pay for Only a Third of State & Local Road Spending: https://taxfoundation.org/gasoline-taxes-and-tolls-pay-only-third-state-local-road-spending/
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