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

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8 responses to “In Metro’s Disruption, a New Opportunity

  1. It’s actually an opportunity to deal with several issues – the first of which is to ask if the “maintenance” issue is one of government incompetence or a lack of funding?

    If they had the funding but did not use that funding to insure a safe and well maintained operation then they should clean house – from top to bottom.

    However, if METRO essentially got starved into an unsafe system – that’s another story.

    I’ve heard over and over that METRO does not have a stable source of funding.

    Now, I’m sure the folks who fancy themselves as Conservatives here in BR will say that if the system cannot support itself with fares alone then it should not be subsidized and should be shut down – presumably to be replaced by “Uber” and Jineys…. …… always fun to listen to the conservative folk when it comes to “unsustainable” mass transit, eh?

    I note that Mr. Bacon will go on and on about ‘sustainability” but not sure I’ve every heard him come right out and advocate that METRO be shut down.. how about it?

    • No, I don’t think METRO should be shut down. We have billions of dollars in sunk cost, the region has evolved land use patterns in response to its existence, and shutting it down would be disastrous for regional transportation. The question is how to fix the system while minimizing taxpayer subsidies for another 25 years of incompetence.

  2. turn it over to the private sector on a guaranteed ROI basis?

    I note there is at least one subway system that is run by the private sector at a profit!

    How Hong Kong’s subway turns a $2 billion annual profit

    http://money.cnn.com/2015/03/30/news/hong-kong-mtr-subway-property/

    or GOOGLE ” The Unique Genius of Hong Kong’s Public Transportation System”

    Now.. I realize this is HIGHLY IRREGULAR that we have a “leftist” … actually “schooling” a self-proclaimed “conservative” on how to properly run a profitable subway system…

    will wonders never cease!

  3. Hong Kong has a population density of over 18,000 people per sq mi. Arlington County, the most densely populated part of NoVa, has a population density of 8,000 per sq mi.

    It’s easier to make a profit with mass transit when mass transit is the only effective option.

  4. Good point about the 8,000 per square mile but even Bacon says Washington would be a transportation disaster without Metro.

    The DC/Md/Va area has never struck me as an area with a shortage of roads – though.

    Many here, including TMT – point out that private companies make billions off of where Metro puts stations and VDOT puts roads – right?

    The subway system in Hong Kong, Singapore and even London is run by a company called MTR properties which are vertically integrated and the rail operation is just one part as the company also is a property developer.

    this is not that unusual of an arrangement. The American rail network was essentially built that way with the govt incentivizing companies to build rail in exchange for property they could develop. To this day -railroads still own great swaths of land.

    • Thank you for bringing this up, Larry. It would be interesting to know how the Hong Kong system ties together transportation and land use. What powers does HK have to regulate land use? Does the HK Metro have to go through years of approvals? Do neighboring resident feel like they’re getting screwed when HK Metro increases density? How does HK Metro get the land? Does it purchase the land on the open market? Does it use eminent domain?

      Subject to the answers to those questions, HK Metro could prove a useful model for the United States.

  5. here you go:

    ” The answer is that the MTR, in association with the local government, has become one of the city’s major property developers. It has used profits from those new housing, commercial, and retail schemes to pay for part of the cost of constructing new subway lines. Along the urban rail lines, the MTR has funded dozens of new housing projects with 300 to 7,000 apartments each. The operations of the subway are entirely unsubsidized by the local government.

    This approach — called “Rail+Property” by the MTR — does not involve the city simply handing over development land to the transit agency at no costs (land in Hong Kong is all owned by the government, though it is leased out to private individuals and corporations for long-term periods). Rather, it is expected to pay the government the land costs estimated based on a no-rail scenario. Thus the MTR is not forced to deal with the problems many agencies face when they use eminent domain to take land, such as escalating values in anticipation of the new transit service. Rather, it is rewarded for the added value it will produce once its new transportation project is completed.

    For the South Island Line, the government has agreed to provide MTR development rights to a site at the former Wong Chuk Hang estate. In turn, the transit agency expects the government to pay for less than half of metro construction costs. The rest of the tab will be picked up by the
    MTR. This process, which directly associates transit operator with transit-oriented developer, makes the financing and construction of new underground transportation links far more simple than the typical approach, which requires governments to use public tax funds to pay for most of the cost of transit projects. The latter funding mechanism, common in the U.S. and Europe, is politically difficult and financially troublesome, especially in times of increasing budget deficits.

    Of course, the MTR is not alone in using this method to assume some of the costs of construction. In Paris, the government’s grand plans for a network of 96 miles of new lines, costing more than €20 billion, would be partially paid for by the creation of development districts around each station whose own existence is only possible thanks to the creation of the transit line. This is a reasonable way to fund a transit line, as it is paid for by the benefits it produces. In a typical U.S. city, the transit agency provides a significant boost to local property values when it invests in a new rail project and yet it is able to capture very little of that extra wealth created — and when it does, only indirectly through tax revenue increases. This slows down the development of many cities.”

    now – you have to admit – if this approach was proposed in the US – that people would go ape-crap and call it “crony-capitalism”.

    be that as it may – the problem is also with Conservatives these days – who are too cowardly to actually propose such an idea as a better way to do transit…

    basically these days- Conservatives are no longer about ideas – but about opposition to Liberal “ideas”.. they offer nothing of their own – only to claim that the Liberal approach fails…

    this is why I’ve become so critical of Conservatives these days. It’s not that I support the liberal tax&spend approach – I never have – I’ve always support fiscal-conservative approaches to these issues but it does – have to involve govt –

    so I totally support – Transurban HOT lanes as well as the MTR Hong Kong approach to transit – a well as PPTA in general – with transparency and safeguards – but let the private sector do what it does better than govt – with govt involved where necessary…

    You can’t run METRO like we are running it right now – where Conservatives refuse to adequately fund it – and really – actually want to starve it then turn around and blame maintenance and safety issues on “incompetence”..

    If you ran the Hong Kong system the same way – it would be the same disaster that Metro is.

    • As for your contention that conservatives have been too “cowardly” to propose a Hong Kong-like approach, I have advocated revenue capture from increased property values as a tool for financing mass transit for years, and I have done so consistently.

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