Daily Archives: May 17, 2013

A Framework for Thinking About Long-Distance Travel

There’s been a lot of back and forth over the utility of Amtrak’s long-distance routes. Unlike regional services on the Northeast Corridor, these services don’t make enough money in fare revenue to cover their operating costs. To start, I think we need a good framework for looking at the alternatives, which as I see it, are as follows: do nothing, air, rail, bus, and car. Note that it is always important do include the do-nothing alternative, because transportation modes compete not only with each other but with the option of not making the trip at all.

To help compare these alternatives, I’m borrowing some graphical methodology from Cap’n Transit’s posts on commute options. Here are the five alternatives plotted with travel time versus cost for a representative trip, Chicago to Los Angeles.

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And here they are with connectivity versus travel time.

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I’m assigning an off-the-cuff assessment of connectivity rather than trying to come up with some numerical index. Feel free to debate the specifics but the relative rankings are sound. Doing nothing obviously gets you no connectivity. Your car takes you anywhere. Air offers very limited connectivity when it comes to intermediate destinations because, unlike a train or bus or car, the plane can’t make lots of stops en route. Bus and rail are somewhere between air and car. I’m putting bus above rail because bus currently serves more destinations, and because given the existing highway and rail networks in the United States, bus service could be scaled up more quickly. The difference in connectivity between modes is an important consideration for understanding which trips they are competing for.

Where does this leave us regarding long-distance Amtrak trains? For starters, I think it suggests that we cannot drive a huge modal shift from air to anything else other than doing nothing. Overwhelmingly, air and doing nothing compete only with each other. Air is far and away the fastest option for long distance travel, and it is not appreciably more expensive. The vast majority of air trips – business, personal, and freight – simply cannot tolerate having their travel time increased from 6 hours to 2 days. I live in LA, but I have a lot of family on the east coast. If it takes me 3 days to get there, I’m going to visit them less often. If we raise the cost of air travel, many trips will simply vanish.

Now, maybe you think a smaller total volume of cross country travel is a good thing. But that’s a different argument than shifting people from planes to trains, and you have to consider the potential for economic losses. That’s a topic for another post.

However, that analysis regarding air travel only holds up if air travel actually serves your origin and destination. As many have pointed out, lots of people riding long distance trains (and we can assume the same for bus) are not going from Chicago to Los Angeles. They are going from, say, Dodge City, KS to Winslow, AZ. Let’s rerun the time-cost analysis using those cities.

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And that’s not even considering that the air option is probably subsidized by the Essential Air Service (EAS) program. We are clearly operating in a different space, and it’s easy to see why: air networks are fundamentally different than rail and bus networks. Serving large cities capitalizes on all the strengths of the air mode, while serving small cities highlights all the weaknesses. The opposite is true for bus and rail; serving small cities highlights their strength: the ability to aggregate trips with different origins and destinations onto the same trip. For these types of trips, air will never be able to compete with rail and bus (and car).

So, if the objective is to get fewer people to drive, the choice is between bus and train, and each offers different advantages. Rail offers a smoother, more comfortable ride, and it’s easier to get up and walk around the train. There is no question that riding on a train is a nicer experience. On the other hand, bus could immediately serve a set of origin-destination pairs that is an order of magnitude larger, and offer greater frequency.

My initial sense is that in the short-term, expanding bus service makes more sense in this case for one reason: infrastructure capital costs. Intercity bus service could be greatly increased without needing anything other more buses and perhaps increased bus terminal, layover, and maintenance space in some cities.

On the other hand, all of the long-distance rail routes are owned and operated by these guys, and I think it is indicative of transportation myopia on the part of a lot of transit activists that we’ve gone this far in the discussion of Amtrak and hardly even mentioned them. Any attempt at major expansion of long-distance passenger rail is going to result in the freight railroads demanding capital improvements. And why shouldn’t they? Here is an industry that, over the last 50 years, has been nearly strangled to death by overregulation and direct government subsidy of their competition, and not only have they survived, they’re killing it. They’re blowing trucking out of the water and dropping billions in private cash on capacity enhancements every year. If you’re a Class I RR, a money-losing passenger service is just another imposition by the federal government that hurts the viability of your business.

At this point, someone is going to note that both cars and bus service are subsidized by the provision of public highways and freeways. True enough. I see no technical reason that you couldn’t increase the cost of using highways to the point that passenger rail becomes profitable.

But if passenger rail becomes profitable, there’s no need for Amtrak anyway. The whole reason Amtrak exists is that passenger rail is not profitable. If passenger trains would make money and be a good use of track capacity, the Class I’s would start to run them. In fact, given how efficient the Class I’s are, they could probably reach profitability with lower ridership and/or lower fares than Amtrak. Tri-Rail doesn’t make any money but FEC seems to think they might be able to on a largely parallel facility.

So what’s the conclusion? I don’t know. Hey, no one said this was an easy question. I think it is clear that for long-distance travel that is not between two major cities, air isn’t going to cut it. In the short-term, increased intercity bus would seem to be the most readily achievable option. But there just aren’t that many trips being made between these minor city pairs anyway. According to the Kansas DOT, the AADT on US 56 west of Dodge City is 2,950. How many of those trips could possibly be served by long-distance transit in the first place? If the rural states want to pay for these services or have the feds chip in a little, I’m cool with that. If they don’t, I’m cool with that too. These trips are not the best type of trip to be served by transit and they are the type of trip where the weaknesses of cars matter the least. Transit advocates should have much bigger fish to fry than worrying about how people in Dodge City get around.

Note: travel times and cost based on Amtrak, Greyhound, and Kayak searches for a one-way trip leaving on May 15, 2013. For the small cities, I used Winslow for rail, Show Low for air, and Holbrook for bus (Amtrak serves only Winslow and Greyhound only Holbrook). I added an hour of travel time to get from Show Low to Winslow. The other airport option is Flagstaff and it is about the same distance/cost. For driving times, I used the Google Maps drive time and assumed two people driving 16 hours out of the day. For driving cost, I used $0.608/mile. You can tweak all of these assumptions; they are just rounding errors compared to the overall outcome.

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Gas Taxes Are Not User Fees

I wasn’t planning on making the first post on this blog about gas taxes, but transpo funding is in the news a lot lately, and I’m getting sick of writing the same comment over and over again on Streetsblog, The Atlantic Cities, etc.

America’s infrastructure could use some sprucing up. If you live in the Northeast or Midwest, your bridges are rusting away from years of road salt. If you ride one of America’s big legacy transit systems, every day you’re putting your safety in the hands of components so old they can’t even be replaced, because no one makes them anymore.

So, where should we get the money to address this problem? That’s easy. Currently, the federal government can borrow money at negative real interest rates. Considering that any tax increase is going to have a negative effect on aggregate demand, which is the last thing the economy needs right now, it’s an open and shut case.

However, as is usually the case in America, the obvious policy solution is blocked by political intransigence, so lately the debate has been about how to raise more revenue. With a hike in the gas tax off the table, other ideas like a vehicle-miles tax (VMT) have been floated. The basic idea of the VMT is that everyone pays a fixed rate for each mile they travel, with miles traveled being recorded through low-tech means like odometer readings or high-tech means like GPS. For reasons I fail to comprehend, the VMT is getting a lot of traction in the progressive community, capped off by a recent GAO report that declared the VMT more “efficient and equitable”. But in fact, the VMT is a bad idea, and by supporting it, progressives are doing a huge disservice to the cause of better pedestrian, bicycle, and transit facilities.

The supposed benefit of the VMT is that it charges people based on how much they use roads – in effect it’s a user fee. Later, we’ll get to why that’s a bad idea in and of itself, but for now, note that the gas tax can be considered a de facto user fee. The more you drive, the more gas you use, and the more you pay. In addition, the gas tax has the benefit of making people who drive inefficient vehicles pay more. A VMT rewards people who drive Escalades at the expense of people who drive Volts. How is that more “equitable” than the gas tax? Sure, you could make the VMT higher for vehicles that are less efficient, but why go to all that trouble?

Which brings us to the second reason the VMT is a bad idea – it is complicated to implement. Any system, from low-tech odometer readings to high-tech GPS, would be subject to rampant fraud. High-tech systems like GPS would require every vehicle in the country to be outfitted with a VMT unit, at considerable expense. The GAO found that depending on the system, up to 33% of the revenue would be lost to implementation costs. Compared to a gas tax hike, which would lose 0% of revenue to implementation costs, how is that more “efficient”?

But wait, didn’t we say that a gas tax hike was off the table? Ah, now we’re getting somewhere. Why is a gas tax hike off the table? Because politicians decided it was off the table. So my question to progressives is this: do you really think that GOP pols will reflexively block any increase in the gas tax, but are perfectly willing to go tell the Agenda 21 crowd that they all have to install government-monitored GPS units in their cars? It’s just ridiculous. No Republican politician takes the VMT seriously. It’s a red herring, an issue that can be used to distract from the need to raise the gas tax. They’ll call for studies of the VMT, and then cite privacy concerns and implementation difficulties as reasons it won’t work.

Beyond all of this, though, if progressives engage in the debate using the “user fee” framework, we’ve already lost, no matter what the outcome. A lot of people have jumped on the “drivers should pay the full cost of roads” bandwagon just because they don’t like cars. But the obvious next step in the argument is that transit riders should pay the full cost of transit, bicyclists should pay the full cost of bike improvements, and so on. The likes of Cato and Reason, who love highway user fee concepts, already make that argument. If you look at the gas tax or VMT as a user fee, you’ve set yourself up for Randall O’Toole to make a convincing argument that gas taxes and VMTs should only fund highways.

Okay, so if the gas tax isn’t a user fee, then why do we have it? Simple. It’s a tax on the negative externalities, which include pollution, climate change, noise, and so on.

Here’s the right way to think about it. On one side, we have public goods that cost money – things like schools, roads, transit, etc. Some projects are better than others and more deserving of funding. On the other side, we need to raise revenue, and there are better and worse ways of raising revenue. The gas tax is a great way to raise revenue because it imposes a cost for generating negative externalities in direct proportion to the rate at which a vehicle produces those externalities, and because it already exists. A tax on bicycling would be a bad idea, because bikes generate positive externalities that we would like to increase. Similarly, a VMT punishes nascent alternative technologies that we ought to be encouraging. Note that by this logic, it is perfectly reasonable to have property or land taxes contribute to funding transportation – land is worthless without access to transportation, just like it is worthless without police to stop crime. We don’t demand that user fees pay for police service either.

Note that this framework also allows you to build a coherent argument for why the gas tax should be increased but transit fares should not. It obviates the “I pay for my roads so you pay for your bikes and trains” talking point – cycling and riding transit have positive externalities, so they should be promoted. It’s also the right way to argue in favor of HOT lanes and congestion pricing, which are taxes on the negative externalities of traffic congestion. The user free framework, on the other hand, is an argument you can’t win. It’s a trap.

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As for the supposed fatal flaws of the gas tax, they are all weak arguments that fail to hold up to scrutiny:

  • Inflation: the easiest to dispense with. The argument goes that inflation has eroded the purchasing power of the gas tax. The obvious solution is to index the gas tax to inflation or construction costs or what have you, or periodically raise the gas tax. You know, like we did for 60 years.
  • Fuel efficiency: the argument here is that increasing fuel efficiency has made it impossible to raise enough money from the gas tax. Note that this is logically inconsistent with the idea that enough money can be raised from a VMT – as long as we are driving gasoline powered vehicles, a gas tax and a VMT can be seen as functionally equivalent, with the difference being that a gas tax is a tax on inputs and a VMT is a tax on outputs. Electric and natural gas vehicles may be an issue someday, but right now they are an inconsequential portion of the vehicle fleet. And at any rate, the data shows that in historical context, current increases in fuel efficiency are not out of scale with what happened in the 1970s.

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  • Not popular with drivers: and the VMT won’t be either. Shockingly, people prefer not paying to paying.
  • Politically impossible: the same kind of thinking that leads people to argue for spending billions of dollars on trans-Hudson rail tunnels before maximizing existing capacity by through-routing.

At the end of the day, there is simply no compelling technical or economic reason to switch from gas taxes to VMTs. On top of that, a VMT would be a major victory for the kind of people who want to user-fee everything in the public realm. The VMT is counterproductive for progressive causes and we need to treat it as such. The answer is simple. Raise the gas tax because it is a charge on negative externalities.

Let’s Go LA

This blog is dedicated to the advancement of Greater Los Angeles, in the hope that I can make some small contribution towards greater prosperity and quality of life in the region.

The main focus of this blog will be transportation, land use, and economics. From there, a little politics is pretty much inevitable. Common themes will include freeway capacity management, transit improvements, zoning and permitting, and capitalizing on the region’s existing economic strengths. The interaction between these aspects of city growth will also be a major topic. I’ll bring in some ideas from the writers on the blogroll and apply them to LA to help think about which plans make sense and which plans don’t.

Geographically, by Greater Los Angeles, I basically mean LA County, Orange County, the Inland Empire (San Bernardino and Riverside Counties), and a little Ventura County for good measure. I’ll occasionally drift down to San Diego and up to the Bay Area. This is California, so water resources will pop up now and then, which means dealing with the Owens Valley, the State Water Project, and the whole Colorado Basin… and beyond. Sometimes I may just write about something elsewhere in the world that interests me, but I’m hoping to mainly stay focused on LA.

This blog is also something of an experiment. While I’m very interested in these things, I’m not entirely convinced I have anything new to say. Part of this is really just going to be me organizing my thoughts to figure that out. Maybe it grows into something more than just a blog. Or maybe I decide to just go back to annoying people on Twitter and in comments on their blogs. We’ll see.

From sun-drenched beaches to snow-capped mountains, the City of Industry to “the industry”, and Beverly Hills to Skid Row, LA’s geography and economy are as beautiful and diverse as its people. And we all make LA better. Let’s go LA.