Tag Archives: mass transit

MTR, Would You Take over Metro, Please?

MTR, the Hong Kong commuter rail system, is arguably the world's most efficient.

MTR, the Hong Kong commuter rail system, is arguably the world’s most efficient.

Here’s an idea for readers to chew on while the Big Bacon is on vacation: How about privatizing the Washington Metro system? Honk Kong privatized its subway system in 2000, and it has worked out pretty well.

Writing on the Cato Institute blog, Chris Edwards quotes a report by McKinsey:

Hong Kong’s MTR Corporation has defied the odds and delivered significant financial and social benefits: excellent transit, new and vibrant neighborhoods, opportunities for real-estate developers and small businesses, and the conservation of open space. The whole system operates on a self-sustaining basis, without the need for direct taxpayer subsidies.

MTR’s railway system covers 221 kilometers and is used by more than five million people each weekday. It not only performs well—trains run on schedule 99.9 percent of the time—but actually makes a profit: $1.5 billion in 2014. MTR fares are also relatively low compared with those of metro systems in other developed cities. The average fare for an MTR trip in 2014 was less than $1.00, well under base fares in Tokyo (about $1.50), New York ($2.75), and Stockholm (about $4.00).

The ratio of passenger fares to operating costs is a high 185 percent, which means that fares cover not only operating costs but a share of capital costs. MTR raises other funds for capital from real estate deals under which it gains from land value increases near stations — a concept known as “value capture” that we have touted on this blog. MTR is so highly regarded in the mass transit world that it has contracted to run commuter rail systems in cities China, the United Kingdom Sweden and Australia. Why not Washington? (Hat tip: Tim Wise.)

Bacon’s bottom line: It would be unrealistic to expect Hong Kong results in in the Washington Metro. For one reason, Hong Kong is far more densely populated and rail is a more attractive option compared to driving. For another, it’s not clear whether Washington Metro could extract the same economic benefit from putting real estate deals together that MTR could. Zoning controls and land use planning may work very differently in the U.S. than in Honk Kong.  But the idea certainly appears to be worth pursuing. If MTR could do no more than bring operational efficiencies to Metro, Virginians would benefit from better service and lower subsidies.

Washington Metro Needs another $1 Billion… Fast

The Washington Metro train wreck keeps piling up.

Washington Metro needs another $242 million from Virginia and its localities over three years.

The train wreck of the Washington Metro keeps piling up higher. The Washington Post sums up the situation this way: Local governments are “alarmed” as Metro says it needs an extra $1 billion over the next three years from Virginia, Maryland and Washington, D.C.

Metro General Manager Paul J. Wiedefeld has earned credibility as an executive willing to make tough decisions, such as shutting down rail service at times and locations where maintenance and repairs are urgently needed. Now he’s telling local governments in the Washington area that fulfilling his goals for safety and reliability — needed to reverse a continued decline in ridership — will cost them an additional $1 billion over what they’ve budgeted for the next three years. That translates into a 36% increase in annual operating subsidies. Writes the Post:

According to Metro’s new forecasts, the District’s total contribution for operations and capital would jump from $467 million in the current budget year to $735 million in fiscal 2020. Maryland’s total would rise from $479 million to $727 million, and Virginia’s would increase from $332 million to $574 million. (Metro’s fiscal years run from July 1 to June 30.)

“We have a $40 billion investment [in Metro], and it’s 40 years old,” said Wiedefeld. “As we replace that, there’s big numbers going forward, and they grow with inflation. . . . Either we start to wrestle with this so it’s where we want it to be, or we just push it down the road.”

Bacon’s bottom line: Maintenance is a bitch, especially when you fail to properly fund it over 40 years. Politicians love the accolades for building new highways, bridges and transit projects. Of course, the ribbon-cutters are long gone when the infrastructure wears out and someone else has to pay to fix it. I wonder how many other Metros there are in Virginia, quietly racking up unfunded maintenance liabilities while nobody notices.

Where Have All the Riders Gone?

by James A. Bacon

Where have all the riders gone? That’s the question transit agencies are asking nationally, but nowhere more urgently than in the Washington metropolitan area. Rail and bus ridership for the Washington Metropolitan Area Transit Authority (WMATA) fell 6% in the fiscal year ending July 31, a decrease of 20 million trips. Ridership had been forecast to increase slightly, according to the Washington Post‘s Martin Di Caro.

The fall-off in Metro rail traffic, which tumbled 7%, is at least comprehensible. Metro has been plagued by accidents, delays, interruptions and maintenance backlogs that have left many commuters disgusted with the service. But ridership on WMATA’s bus lines declined, too, while New York, Chicago, Los Angeles and other cities with large mass-transit systems have seen falling ridership.

It wasn’t supposed to happen this way.  This decade was supposed to experience a great mass transit revival as growth and development shifted back to the urban core, and as Millennials and Empty Nesters gravitated to walkable, mixed-use communities served by commuter rail. Millennials were supposedly abandoning the idea of car ownership in favor of walking, biking and transit.

Although there are plenty of theories about what’s happening, no single explanation has emerged as decisive. Ridership was down across all time periods, days of the week, and nearly all individual stations, although losses were especially severe in off-peak periods,” states one WMATA document cited in the article. Di Caro summarizes the possible explanations:

Demographic changes, the rise of telework, the proliferation of transport alternatives such as Uber or Capital Bikeshare, the economic downturn and reductions in federal spending, constant weekend track work over the past five years – all have combined with consistently poor rush hour service to drain Metrorail ridership.

Mass transit authorities across the country are focusing on the dramatic ridership gains by Uber, Lyft and other “e-dispatching taxis.” Their effect seems to be most pronounced late at night and early at morning when transit service is spottiest. But there is no research to support a conclusion that the Uber revolution is capturing millions of commuter trips.

Demographic changes should be favoring mass transit, not hurting it. So should the economy, which, though sluggish, is growing. As for Capital Bikeshare, total ridership ran about 2 million last year. Any increase in ridership could have diverted only a tiny percentage of Metro passengers.

Bacon’s bottom line: I have no explanation for the decline, which I didn’t anticipate. I have never been a transit utopian, but I thought that social and economic trends did portend at least a modest shift from single occupancy vehicles to bus and rail. Clearly, I was wrong.

What set me apart from other transit advocates was a reluctance to spend heavily to build expensive new commuter-rail facilities that had no hope from the get-go of supporting themselves financially. Private developers, not government entities, should take the risk that notoriously unreliable traffic projections would pan out.

WMATA, already facing a multibillion maintenance backlog, now must divert millions of dollars slated for critical preventive maintenance to cover the the operating the revenue deficit. The authority is staring at a vicious cycle. Less maintenance = poorer service = fewer riders and revenue. The WMATA board is considering a fare hike to help cover the revenue gap. But higher fares drives off riders as well. The deficit could surpass $150 million this year.

Until the dynamics driving mass transit ridership are better understood, it would be advisable for Virginia localities to revisit their assumptions underpinning proposed projects like Virginia Beach light rail and Richmond Bus Rapid Transit. Their ridership and revenue projections are almost certainly flawed. The same applies to toll-funded highway megaprojects, such as the $2 billion in Interstate 66 improvements. Given the precarious condition of the global economy, the fragility of the sovereign debt bubble, and the vulnerability of Virginia to cutbacks in federal spending, we need to be more disciplined than ever with our capital spending.

Integrating Uber with Mass Transit

Photo credit: Washington Post

Photo credit: Washington Post

by James A. Bacon

Arlington County is toying with the idea of replacing under-utilized bus lines in the northern part of the county with ride-sharing services provided by Uber Technologies Inc., and Lyft Inc. The service could offer rides to and from Metro stations at Ballston, East Falls Church and Courthouse

Subsidizing the ride-sharing services would be more cost-effective than operating full-service bus lines with low ridership,  Marti Reinfeld, the county’s interim transit chief, told the Washington Post

“What we would be supporting is picking up residents in their neighborhood and taking them to one or two designated stops, most likely a transit station,” Reinfeld said. “The county will subsidize that at some level.”

The idea is still conceptual, but Arlington officials confirm that they have held conversations with Uber and Lyft, both of which have sought similar partnerships elsewhere in the United States.

Bacon’s bottom line: Every transit operation in Virginia with money-losing routes ought to be thinking the same way.

The first step is to prune under-utilized and money-draining bus routes and concentrate resources into the most robust transportation corridors, offering greater frequency and reliability of service, in turn increasing ridership on those routes. This is what Houston famously has done, boosting ridership at no extra cost. The same consultants behind that transformation are working to rationalize the Richmond bus system.

The second step is to work with Uber, Lyft and anyone else with a bright idea to create a shared-ridership feeder system, in effect substituting vans and carpools for near-empty buses. Subsidies might be useful in order to stimulate the start-up of these services, but ideally they could be phased out over time as the concept takes hold and ridership builds to profitable levels.

A third step worth considering — requiring input from Uber, Lyft and others on what would be cost-effective — would be to invest in remodeling bus stops, rail stations and intermodal facilities to accommodate the easy ingress and egress of vans and carpools. The more seamless the connection between Uber-like services and mass transit, the more attractive the set-up is to passengers, and the more likely the idea is to succeed.

While I am no fan of subsidizing any mode of transportation, I acknowledge that there is no getting rid of money-losing transit operations, and we must do the best job with them we can. If subsidizing shared Uber rides instead costs less money, then there is a net gain to taxpayers.

Metro Positions Itself for the Big Ask

metroby James A. Bacon

Staring into a fiscal black hole, Washington Metropolitan Area Transit Authority Chairman Jack Evans is trying to nail down the authority’s 2018 spending plan by November, months earlier than usual. The move, suggests Washington Post writer Martine Powers, “is a signal that the transit agency is preparing to ask the District, Maryland and Virginia for additional money if fares are not raised or the federal government does not come forward with more funding.”

How much money? Between $75 million to $100 million per jurisdiction.

Evans issued the warning after a meeting in which the WMATA board discussed a presentation by McKinsey & Company indicating that the mass transit organization was paying significantly more for expenses than comparable transit agencies.

The McKinsey report, issued in April, is must reading for Virginia legislators pondering how to respond when WMATA approaches, tin cup in hand, begging for more money or risk seeing the collapse of the mass transit service so critical to Northern Virginia’s economy. That report clearly lays out the management challenges facing the authority and provides concrete ideas on how to address them.

WMATA’s long-term mismatch between revenues and expenses has been getting worse, not better. According to McKinsey, Farebox recovery has declined from 47% of costs in 2011 to 45% today and will continue to drop further as passengers fed up with the rail system’s poor reliability commute by other means. Rail system revenues would need to grow at 7% yearly just to maintain the current operating deficit. Personnel growth averaging 5% annually has driven most of the cost inflation. The authority has more employees who getting paid more (wages growing 4% annually) to work less (regular hours per full-time equivalent employee down 2% annually).

Poor railcar maintenance is the single-most important driver of service unreliability — 63% of all rail line delays are caused by railcar failures, the report says. There are two main reasons for cars being unavailable: parts are frequently out of stock, and repair throughput is exceptionally low. “Estimated technician wrench time ranges between 25% and 40%, below a best-in-class standard of 60%.” The reasons for the low productivity can be traced to systemic management failures such as the uneven distribution of cars between shops, turnover in mechanic staff, and technicians starting work orders without all necessary tools and parts.

The report also took note of the high cost of MetroAccess, a transportation service for people with disabilities. McKinsey estimated that WMATA could cut the $110 million program’s costs 20% by experimenting with innovative delivery models. The report also recommended extensive changes to WMATA’s capital allocation model and the structure of its pension, retirement-benefits plans and workers compensation plans.

Bacon’s bottom line: The McKinsey report provides an objective checklist of reforms that WMATA needs to make before entrusted with any more Virginia taxpayer dollars. Give management the money without conditions, and the urgency to implement the reforms disappears. Make added money contingent upon implementing reforms, and WMATA actually might wind up needing less than it thinks it does. If WMATA’s board and management are unwilling or unable to execute these of equivalent reforms, Virginia should give them no more money.

Hat tip: Tim Wise

A Once-in-a-Century Opportunity to Get Transportation Right

Photo credit: Wall Street Journal

Photo credit: Wall Street Journal

by James A. Bacon

Take the Uber revolution of summoning rides with a smart phone. Then add driverless cars, which eliminate the expense of paying someone to drive the car. Then overlay the emerging business model of Transportation As a Service, in which people pay for rides when they need them rather than buy cars that sit idle 90% of the day, often incurring parking fees in the process. Shared self-driving cars could take up to 80% of all vehicles off the road, according to a Massachusetts Institute of Technology study noted in a Wall Street Journal thought piece by Christopher Mims.

How would the impact of such an eventuality ripple through the rest of the economy? While acknowledging that such things are impossible to predict, Mims speculates that shared, self-driving cars will spur “suburban sprawl.”

Nearly everyone who has studied the subject believes these self-driving fleets will be significantly cheaper than owning a car…. With the savings you will be able to escape your cramped apartment in the city for a bigger spread farther away, offering more peace and quiet, and better schools for the children.

As for the putative preference the Millennial generation has for living in the city, writes Mims, it’s a myth. “Not only do 66% of millennials tell pollsters they want to live in the suburbs, they are moving there, as population growth in suburbs outstrips growth in cities.”

I don’t agree with Mims’ conclusion, but these are ideas worth exploring. I’m most intrigued by the MIT forecast that the shared, driverless-car future will take 80% of all vehicles off the road. For purposes of argument, let’s say that shared, driverless cars take only half of all vehicles off the road. That’s still an astounding number.

My first question is this: Will the streets, roads and highways in a world of shared, driverless cars be less crowded? To answer that, we must distinguish between the number of vehicles and the number of trips taken. Unless people take fewer trips, they still will need means of conveyance. If everyone rides solo cars, the country may need fewer cars but there will not be fewer cars on the road. Only if people share rides — either in conventional cars, vans or micro-buses like the one pictured above — will there be a need for fewer cars on the road. I think it’s possible that we’ll see fewer cars on the road, but no one can make such a prediction with any confidence.

Here’s what we can predict: A shift to shared, driverless cars will reduce the number of vehicles needed to serve the population. To the extent that fleet operating companies maximize the asset value of their fleets by running them 24/7, most cars will be on the streets (or in maintenance garages or recharge stations) instead of sitting in parking lots and parking decks. The most confident prediction we can make is that America will need fewer parking spaces.

Shrinking acreage dedicated to parking will have a profound impact on human settlement patterns. While it will free up some land in densely settled urban areas — putting a lot of parking garages out of business — the biggest impact will be in the scattered, low-density areas we think of as suburbia. Millions of acres of parking lots across the country will become redundant and unnecessary.

If localities are intelligent enough to eliminate minimum parking requirements, retailers would have every incentive to convert acres of land into something useful — offices, townhouses, apartments, parks, whatever. So much land would be freed up from redundant parking lots that there would be no need to develop another acre of greenfield land for another generation. Localities that anticipate this opportunity by revising their comprehensive plans and zoning codes will enjoy a huge advantage over the laggards in attracting new development.

Now, back to Mims’ observation that Millennials prefer “the suburbs” by two to one over “the city.” That’s a meaningless statement. True, young families may prefer so-called “suburban” jurisdictions with quality school systems, but the operative factor is the quality of the schools, not the low-density and auto-centric design of the communities. Other research shows that Millennials also prefer walkable, bikeable communities. The preference for good schools may be stronger, but that doesn’t mean the Millennials wouldn’t jump at the chance to live in a community that offered both good schools and walkable-bikable places.

In contrast to Mims, I do not think that shared, driverless cars will spur more of the scattered, disconnected, low-density that we call “suburban sprawl.” To the contrary, I believe it will stimulate the redevelopment of low-density, auto-centric communities into walkable urban places.

Localities across Virginia will enjoy a once-in-a-century opportunity to convert parking lots into taxable development without incurring the offsetting liability of needing to upgrade the transportation infrastructure to support the denser population. But this will happen only if they stop mandating parking lot requirements and revise their comprehensive plans and zoning codes to accommodate the new possibilities.

Likewise, the Commonwealth of Virginia, which once again (and as predicted) finds itself short of dollars to fund the roads, highways and rail systems, needs to re-think the twenty-year future. The transportation infrastructure of the 21st century will be Uber-fied. Throw out all long-range traffic projections! Rather than sinking hundreds of millions of dollars into expensive new highways, light-rail rail and Bus Rapid Transit systems, we need to start thinking what kind of investments will expedite the coming of shared, driverless cars.

States and localities that work out the solution first will be winners. Those that stick to the current transportation paradigm will lose.

NoVa Legislators Balk at Bailing out Metro

by James A. Bacon

Eleven Virginia legislators from Northern Virginia say they would block any “new dedicated funding stream or tax increases” to fund Metro repairs expected to cost $60 million.

“We cannot in good conscience ask Virginia taxpayers to bail out years of mismanagement, negligence and wasteful spending,” stated a letter signed by House Majority Caucus Chairman Timothy Hugo, House Majority Whip Jackson Miller, Del. David Albo and Del. James LeMunyon.

Washington Metropolitan Area Transit Authority Chairman Jack Evans called the letter “ludicrous.” Channel 4 Washington quotes him as saying, “The fact of the matter is, Metro has a $300 million operating shortfall, an $18 billion capital shortfall and a $2.5 billion unfunded pension liability. And we have to address it some way.”

Wrote the legislators:

Virginia has more than met its funding commitments to WMATA. In 2007, Virginia committed $50 million per year for 10 years to fund capital improvements for Metro. In 2013, the General Assembly passed legislation to increase funding for transportation, providing $300 million for the construction of the Silver Line and generating about $80 million per  year for the Commonwealth’s Mass Transit Fund. The General Assembly also provides an annual operating subsidy to WMATA of about $100 million, Virginia has delivered over and over again.

The solution to funding Metro’s safety needs and on-going operations lies internally. WMATA’s financial problems are, in our view, largely self-inflected. Metro must get labor and operations costs under control. WMATA’s labor cost increases in recent years have exceeded ridership increases and …. benefits for WMATA employees are significantly than the norm among big city transit agencies. WMATA also has a $2.5 billion unfunded pension liability.

Bacon’s bottom line: The legislators’ numbers don’t include subsidies from Arlington, Alexandria, Fairfax County and Falls Church, or revenues from the Tysons special tax district and toll increases on the Dulles Toll Road to help pay for completion of the Silver Line to Dulles International Airport.

At the end of the day, Virginia has no choice but to help bail out WMATA. A collapse of the flailing giant would cripple Northern Virginia’s economy. But Virginian legislators need to drive the hardest bargain they possibly can to bring accountability to the organization or it will become a veritable fiscal black hole. It looks like senior Republican lawmakers in the General Assembly are willing to bargain hard. I have every confidence that downstate legislators will back them up.

(Hat tip: Tim Wise)

Virginia in No Rush to Address Impending Metro Meltdown

metroby James A. Bacon

The McAuliffe administration seems to be in no hurry to bail out the ailing Washington Metropolitan Area Transit Authority (WMATA) commuter rail system crippled by declining ridership and an $18  billion capital spending shorttfall over the next ten years. Bolstering state support for the transit authority, which has been plagued for decades by union featherbedding and short-sighted, politically driven decision-making, would divert billions from other projects around Virginia.

At a recent discussion of Virginia’s rail and transportation budget Tuesday, Virginia Transportation Secretary Aubrey Layne said there are no immediate plans to send more money to Metro, although there could be discussions with the General Assembly in the future.

“At some point, based on the estimates that I have seen as to what the capital needs are going to be, there’s obviously going to be that discussion for additional revenues,” Layne said, as quoted by the Washington Post. “That is not contemplated in these budgets.”

Bacon’s bottom line: This discussion is unavoidable, and the sooner it starts, the better. The Washington Metro is mission-critical transportation infrastructure for Northern Virginia and the rest of the Washington region. It cannot be allowed to fail. Failure to address the system’s maintenance needs will result in more accidents, more delays, more malfunctioning escalators and other conditions that drive away ridership, which in turn will cut into operating revenues.

At the same time, Virginia taxpayers are understandably reluctant to pour billions of dollars down a rat-hole, diverting funding from their own much-needed transportation projects, without some assurances that the commuter rail system can be made to run efficiently. Among major concessions that I would push for are higher fares, revisions to union contracts, prioritization of maintenance funding over expansions of the system, and an overhaul of the governance system.

Working out an agreement that satisfies constituencies in Virginia, Maryland and D.C. will be incredibly difficult, given the different ideological and geographic interests involved — not to mention the inevitable turnovers in political leadership. Negotiations could take years. Metro doesn’t have years. Discussions need to start immediately. McAuliffe could show leadership by convening a high-level confab to bring together major stakeholders from across the Washington region and surfacing the major issues that must be resolved.

Pulse Has a Pulse after All

Click for larger image.

Click for larger image.

by James A. Bacon

When last I blogged about Richmond Pulse, the Bus Rapid Transit plan for the city’s Broad Street corridor, the projected cost had leaped $11.5 million over its original $50 million estimate. While I support mass transit in the right circumstances, I saw little good coming from this project, in which state and federal authorities had helicoptered dollars upon the Greater Richmond Transit Company (GRTC) and the city had done little to create the conditions — zoning for appropriate land use, funding streetscaping and planning for intermodal connectivity — needed to make the project a success.

I was worried that I might have offended my old buddies in the local Smart Growth community by my unsparing criticism of the transit project. As it turns out, I need not have worried. They shared the same concerns. Indeed, they have been working feverishly through the planning process to correct the obvious deficiencies.

“Typically plans for transit projects sit on the shelf for years while agencies try to find funding,”  says Trip Pollard, an attorney with the Southern Environmental Law Center, “but in this case, while some planning certainly had been done, the funding got ahead of the planning.”

The project, which runs 7.6 miles from Rocketts Landing at the east end of the city to the Willow Lawn mall at the west end, is scheduled for completion in the fall of 2017. Planners have moved into high gear trying to catch up. Two important studies should be complete this fall.

The Richmond Regional Transit Vision Plan will create a regional transit vision plan to stakeholders and the public that will guide transit development in the region through 2040. The idea is for Pulse to be part of a more comprehensive regional transit system.

The Broad and East Main Street Corridor Plan will focus on the Pulse corridor, identifying where development should occur, what development should look like and how it should happen.

Meanwhile, the Richmond Transit Network Plan will rethink the design of the city’s bus network in the context of Pulse. For example, will Pulse free up GRTC resources to improve service on other routes? How can regular bus routes interface with Pulse? Can GRTC optimize its bus service in other ways? Jarrett Walker + Associates, renowned for its re-engineering of the Houston bus system, will conduct the study. That should be complete next year.

As a bonus, the U.S Department of Transportation is providing technical assistance in the Ladders of Opportunity Transportation Empowerment Pilot Initiative to promote Transit-Oriented Development in the low-income Fulton community, whose residents are expected to use the BRT to reach jobs in the West End.

While implementation of the Pulse project has not exactly risen to a top-of-mind issue in Richmond’s highly competitive mayoral race, “there is a mobilized civic community,” says Stewart Schwartz, executive director of the Coalition for Smarter Growth. Civic leaders are determined to make sure the project is done right.

The Smart Growth community has a lot riding on this project. If Pulse crashes and burns, it will undermine political support for more mass transit funding in the Richmond region. Conversely, if the project is successful, it could pave the way for a regional system.

In Metro’s Disruption, a New Opportunity

metroThe good news is that the Washington Metropolitan Area Transit Authority is making the tough but desperately needed measures to maintain the commuter rail system serving the Washington region. The authority has announced a “massive” maintenance surge to address chronic infrastructure issues that have created safety issues and hindered trains from staying on schedule.

The bad news is that the surge will require closing portions of the system for weeks at a time, requiring thousands of commuters to find other ways to get to work. The inevitable result: more congestion on already-overloaded streets, roads and highways.

Jim Dinegar, president of the Greater Washington Board of Trade, is calling upon businesses to prepare for the disruption by creating flexible work schedules, encouraging telework, and promoting van books. Uber will be in heavy demand, he predicts. Parking may be in short supply.

Bacon’s bottom line: Here’s my hope: that entrepreneurs take advantage of the opportunity to Uber-ize shared ridership across the full spectrum of price points from luxury rides to Third World-jitney like travel. It will be fascinating to see how this plays out.

— JAB