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<p>[quote user="HarveyK400"]</p> <p> <blockquote> <div><img src="/TRCCS/Themes/trc/images/icon-quote.gif" /> <strong>Sam1:</strong></div> <div></div> <p> </p> <blockquote> <div> <div style="clear:both;"></div> <p> </p> </div> </blockquote> <p> </p> <p>Perhaps!  </p> <p>The Capitol Corridor offers 32 trains per day, on average, between the Bay area and Sacramento or vice versa.  In FY10 the service lost $16.1 million before interest and depreciation.  The average load factor was 27.7 per cent. </p> <p>The Pacific Surfliner service has 26 trains per day between Los Angeles and San Diego.  In FY10 the trains lost $30.9 million before interest and depreciation.  The average load factor was 30.1 per cent.</p> <p>These trains carry considerably more than one per cent of the traffic between their end points, but it is small compared to the percentage of people who travel by auto.  Moreover, the numbers don't suggest that a high percentage of intercity travelers would use a service if it offered a greater number of trains.  If a private operator had an average load factor of 27.7 or 30.1 per cent, he or she would be looking for ways to increase demand or slash the service before the losses drove him or her out of business.  Not something governments have to worry about! </p> <p>An investor owned company would look to similar markets to determine what the demand would likely be in a market that is not served with a similar service or is under served by the existing service.  They would do a market study to determine if they could recoup their investment.  Government, on the other hand, claims that the service is in the public interest, even though the users are not willing to pay for it, and offers it anyway.  If it cannot cover the cost of the service out of the fare box, it fobs the cost off on the tax payers, claiming that everyone really wins in the end.</p> <p>The problem that I have with a government run railroad that is not likely to recoup its costs is it likely becomes in effect another entitlement.  And once an entitlement is in place, lord help the politician who attempts to take it away.</p> <div style="clear:both;"></div> <p> </p> </blockquote> </p> <p>Governments do not operate in a vacuum.  Costs are as important as public interest and can become political issues.  CTA, Metra, and Pace have faced periods where fares were raised and services cut due to public pressure.  A few years ago the Hiawatha service was threatened because costs were questioned with respect to the benefits received.</p> <p>I can't speak to the load factors and viability of the California services; but the Hiawatha service is seriously under-used except for #330 and #339 which are nearly full with some 400 passengers.  The monthly pass costs just $8.14 per ride compared to the $22 1-way fare.   Parking downtown costs around $30.  With gas now around $4 a gallon and assuming 30mpg, that's another $22.93 a day but less that half the cost of going to a non-downtown destination when CTA or Metra fares are added in.  What's wrong with this picture is that travel to work is being given away and the train is full while it is inordinately expensive for most other trip purposes and carries few people.  The monthly pass easily could be raised, perhaps in steps, to $528; and a 10-ride could be $135.  In conjunction with peak pricing, I have wondered if 1-way fares were lowered to around $15 for non-peak trains whether the ridership would increase to make up the revenue, carry more occasional passengers, and increase public support. [/quote]</p> <p>Governments are not oblivious when it comes to costs.  But they don't have competitive pressures to do things better, faster, cheaper.  If they are inefficient, their first response is to attempt to pass their wasteful practices onto the backs of the tax payers.  On the other hand, a competitive business must find a way to increase revenues, reduce costs, or a combination thereof.  Or go out of business!  </p> <p>The Hiawatha services may have been threatened by political pressure, but as is often the case, the public loses interest in the political pressure.  It is still running.  And it is losing nearly $40 million per year before interest and depreciation.  There are not many competitive businesses that would continue to lose $40 million on a product or service line year after year.  They would find a way to make it profitable or at least breakeven or junk it.</p> <p>Many government services are in the public interest.  National defense, education, healthcare, housing, police and fire protection, garbage collection etc. are amongst these.  So too is public transit, although I believe the Melbourne, Australia model that I described would be a better way to go.  But to argue that intercity passenger rail is in the public interest is a bit of a stretch, especially given the fact that its competitors (air, bus, etc.) pay their own way. </p>
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