Metro vs. Transurban in the Age of COVID

Perceptions of safety on different transportation modes. Green bar = more safe. Blue bar = the same. Orange bar = less safe. Source: “Urban Mobility Trends from COVID-19”

by James A. Bacon

We are taking a break from our regularly scheduled programming about the culture wars to highlight a more traditional topic: government dysfunction. In so doing, we shall contrast the flailing, failing response of a quasi-governmental entity, the Washington Metro, with the proactive, enterprising response of a private toll road operator, Transurban, to the challenge of epidemic-induced declines in traffic.

The Washington Metro, an independent authority governed by a board of directors appointed by three states and the federal government, is a train wreck. For years the commuter-rail and bus system was plagued by maintenance backlogs, a toxic workplace, frequent accidents, deteriorating on-time service, and declining ridership. Then the epidemic hit, and people found it impossible to maintain social distance. Ridership was down 85% in July compared to the same month in 2019… which was down from previous years.

Ridership on the Silver line in Fairfax County is so sparse that it is now practicable for would-be rapists to assault people on trains. Last month a 21-year-old man sexually assaulted a woman who, with her child, was the only other rider in the car. The woman did manage to escape the train at East Falls Church Station, but it won’t bode well for ridership if the public concludes that riding the train is on a par with picking up random hitch-hikers.

Metro has kept the lights on this year thanks to $767 million in federal coronavirus relief funding. But unless Congress approves another round of bail-outs, Metro officials say they may have to cover a $200 million budget shortfall by cutting back capital spending, freezing vacancies, and cutting service — all of which aggravate the underlying problems that drive riders away. Only 25% of Washington Metropolitan Area Transit Authority revenues came from fares. Almost all of the rest came from state-, federal- and local-government taxpayers.

When Metro fails, riders suffer and taxpayers take the hit.

Contrast that with Transurban, the toll road concessionaire for the Washington Beltway, Interstate 95, and Interstate 395. Transurban, an Australian company which owns toll roads and infrastructure projects around the world, took a $111 million loss in fiscal 2020. The company had taken a huge bet that increasing traffic in Northern Virginia (and Australia) would boost revenues from its dynamically priced express lanes.

Traffic on the 95, 395 and 495 Express Lanes hit a low in April when it declined  80% according to the Washington Post. Through mid-June, average daily traffic was still about 60% of pre-pandemic levels.

Now, guess how big of a bail-out Transurban is asking for.

Oh, it’s not asking for a bail-out. So, the answer is zero. Taxpayers are not on the hook for the company’s massive decline in traffic and loss in revenue.

You see, Transurban is managing the company with a multi-decadal perspective, it is diversified, not dependent upon a single revenue stream, and it has access to private equity markets. Indeed, last month the company announced that it intended to sell a financial stake in its U.S. toll roads because it wants to strengthen its balance sheet during the COVID-19 epidemic and have enough cash on hand to bid on new projects.

Transurban has one other advantage over Metro. As the shutdown has eased, riders have returned more quickly to roads and highways than to Metro. One likely reason is, as the chart from a recent Transurban research report indicates (shown above), people are far more likely to feel safe in “cars and motorcycles” than in mass transit or in (Uber, Lyft, etc.) Exclude the motorcycles, and I’d bet that the perception of safety would be a lot higher for just cars.

The long-term threat to Metro and toll roads alike is that more people will work from home. A high percentage of the Washington-area workforce is employed by occupations that can telecommute, and the COVID-19 epidemic has proven that distance working is a viable option for many. More telecommuters means fewer commuters, which means fewer customers for both METRO and toll roads.

If I had to bet who will adapt better to this profoundly adverse trend, I’d lay my money on Transurban. Metro, a permanent ward of the state, has defied all reform efforts, and there is no sign that anything will change.

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57 responses to “Metro vs. Transurban in the Age of COVID

  1. Transportation as a service – TaaS.

  2. Funny, last time I checked – the “failing govt” was also part of the culture wars.

    If you want a REAL comparison of travel and how the corporations are handling it – how about including the airlines and cruise ships folks?

  3. Agreed. The mass transit services where people are truly packed in will take a long time to recover, if they ever truly do. But that just means we will taxed more to subsidize emptier trains and buses, doesn’t it? I can’t see the Vested Interests releasing their grip….

  4. James Wyatt Whitehead V

    Even Metro workers are doing the job from home. My brother is a surveyor for Metro. He hasn’t been to his office in months.

  5. Here’s the headline you won’t see in BR when talking about mass transit and bailouts:

    Crippled Airline Industry to Get $25 Billion Bailout, Part of It as Loans
    Airlines will receive billions of dollars in grants and loans to pay flight attendants, pilots and other employees.

    • Right, because Congress has not passed such, at least not the second round. No question, those industries have also been near-destroyed by the COVID panic. I thought I mentioned the cruise industry the other day…. 🙁 We’d have been on the Middle Rhine today. Like highways and mass transit, the airlines are a vital transportation provider and are likely to remain, but only after President Harris gets her vaccine will the public confidence flow back….

      Still great reluctance out there: A slide from a recent poll on the question:

      As I recall, only people who said they did regularly travel were included. (Heart and Mind Strategies). Same sample had 48% saying the economy should be locked down until a vaccine is out there. That was as of early Oct! Still a great deal of fear.

      • hard to talk honestly about the “failure” of mass transit without including the airlines.

        and hard to attribute METRO to failed government and not also for the airlines?

        My bet is that the airlines are going to get as much or more than METRO …

        so what would be a fair and objective way to discuss both METRO and the Airlines in terms of government?

  6. James Wyatt Whitehead V

    “We are taking a break from our regularly scheduled programming about the culture wars to highlight a more traditional topic: government dysfunction.”

    Stop the chisels! Culture War Update. Equestrian statue of Teddy R and standing figure of Uncle Abe torn down last night in merry ole Portland.

    Now back to government dysfunction.

  7. “Stop the chisels! Culture War Update. Equestrian statue of Teddy R and standing figure of Uncle Abe torn down last night in merry ole Portland.”

    Up for destruction, reduction to ruble, by Amerika’s social justice warriors in their culture wars on America, the US Congress Building and White House are getting ever closer to the front of line going into the meat grinder, along with US history, literature, political science, economics, law, business, civics, sociology, poetry, psychology.

  8. Recently, Secretary Valentine wrote the McLean Citizens Association a letter in response to its resolution on Project 495 NEXT. In that letter, which I’ve read, she stated that, as of September 16, interstate traffic had returned to 90% of last year’s volume during peak periods.

    WMATA’s rail and bus services present a bigger economic problem than toll roads, IMO.

  9. First they came for the subways, and I did not speak out—
    Because I was not an urbanite.

    Then they came for the buses and taxis, and I did not speak out—
    Because I was not a poor suburbanite, nor business traveler.

    Then they came for the Ubers and Lyfts, and I did not speak out—
    Because I was not a millilenial barhopper.

    Then they tried to hide 7.8 cents in fuel tax, and BY GOD no one was left to listen to me.

  10. It should be pointed out that the response by Metro Police was so inept that they couldn’t catch the perp before he exited the system.

  11. WMATA ran Metrorail for the benefit of its employee union and cronies for years, ignoring safety and maintenance. This caused diminished ridership. We need to see what happens when the pandemic plays out but one cannot use huge amounts of tax dollars needed elsewhere to maintain WMATA as is.

  12. The airlines are also unionized, no and they also want bailouts.

  13. Toll roads always remind me of one particular trip back in the 70s. Taking I-95 for the first time headed to Maine, in a friend’s brand new Spitfire, I was driving the leg that came around NYC about midnight and entered Connecticut. Stopped immediately and dropped a quarter. Barely had the car out of 3rd when I read “Pay Toll Ahead”… another 25 cents… up the hill out of the toll booth… backup at some construction… another tollbooth and another 25 cents… more tollbooths, an hour later, and 3/4 of a roll of quarters gone, I pulled to yet another booth, handed yet another quarter to yet another bleary-eyed toll collector, and asked, “How many more of these damned 25 cent stops are there on this road?”
    “This is the last one,” he replied.
    As I sped away the headlights hit the sign “Welcome to Rhode Island”

    Never again! Gimme two-lane blacktop on a moonlit night and no damned tollbooths!

    • I hate tollbooths but they are a thing of the past now with EZ-Pass.

      We have the transponder affixed in the desired manner and wherever we go, we just naturally go to the EZ-pass lane. Paid a horrendous toll near Colorado Springs last year…. but all other times – it’s been a pleasure.

      I think all interstates should be tolled… get rid of the joy-riders..

  14. The Silver is looking very tarnished (Dark Gray at best)..and the Purple Line (MD) is looking kind of Blue…with reference to elected officials who thought these unused investments made sense

    Transurban I am not wildly enthusiastic.. Maybe if a knew more, but with $50 tolls on a good day on the Lexus Lanes they can weather a storm…OK I buy that. Why are I495 Hot Lanes falling apart already? and trucks are not allowed.
    No wonder trucks are not allowed, not built for it.

  15. The way that a lot of them work now days is that there is a free lane and if you are HOV you can ride free in the toll lanes.

    You do have options.

    There is no fiscal way that VDOT could have added more lanes to I-95, I-495 and I-66 without borrowing the money and making all of Virginia pay it back. In the end, people don’t understand what it takes to add lanes to a limited access road. Every single overpass and interchange has to be rebult to add more lanes under it

    If you actually had a referenda and asked people if they preferred taxes over tolls or vice versa – people would vote against both!

    they just don’t want to pay the true costs.

    • Every road has true costs. Not just the roads in NoVa and not just roads being widened. Highland County, Va has a land area of 415 sq mi and a population of 2,210.

      The median income for a household in the county was $63,636, and the median income for a family was $76,566. So we can drop the rural poverty schtick.

      98.6% of the population is white. So we can drop the systemic racism schtick.

      Should the residents of Highland County pay the true costs of the roads in that county?

      • How do you know they do not?

        • Gonna guess that with the highest traffic volume recorded in the county as being 1600 average vehicles per day (in 2008), the low traffic volume doesn’t even begin to cover the cost of the roads.

          Whereas if the roads were congested and gridlocked with traffic 8 hours out of the day, well…the worse fuel economy a vehicle gets, the more money the state gets.. and most vehicles get pretty poor fuel economy idling.

          • When roads get more traffic than they can move – it costs great gobs of money to all manner of commerce. The simple tradesman can only do 2 or 3 calls a day instead of 4 or 5 – and you get to pay more because of it. The post office and UPS have to hire more dirvers for more vehicles if one vehicle can no longer cover it’s route.

            Cars on congested highways STILL don’t pay the costs because they are much more efficient -AND they get their best mileage at lower speeds.

            Finally, more than half of all gas taxes collected – they pay for maintenance and operations – AND the more roads we build the more that total goes up.

        • Larry:

          Vehicles get their best mileage when they are driven, without stopping or slowing down, at the lowest speed possible in the highest gear. For most vehicles, that’s around 40-50MPH.

          In heavily congested stop-and-go traffic, this is not the case. Accelerate in 1st then 2nd to perhaps 15MPH, slow down, stop, accelerate again in 1st then 2nd to perhaps 15MPH, slow down, stop.

          In these driving conditions, a vehicle that gets 30MPG highway might be lucky to achieve 15MPG.

          And the Commonwealth takes in double the gas tax revenue.

          • idiocracy – do you know what a scangauge is? It provides readouts from the vehicle including instaneous MPG. A lot of modern vehicles also provide this info.

            In most congested driving – gas mileage is not terrible. In stop and go, it still actually BETTER than older cars get. The bigger cost by far is the time lost. That’s the standard measure for the damage that congestion causes. And when a road IS congested, it often kicks up an improvement project to help it and those costs in urban areas are 5-10 times as much as they would be in a rural area. Simple things like milling and repaving have to be done at night at much higher labor rates – and they cannot go until done. They have to shutdown early morning then come back at night again.

            Urban roads are uber expensive…congested or not.

            More and more regions are going to tolls on the major interstates – not so much to raise money -but to “shape” the congestion levels.. by dynamic tolling.

        • Larry:

          I do know what a scangauge is. And my data about how much additional fuel stop and go traffic uses in comparison to free-flow traffic is, in fact, from a Scangauge, as well as from the on-board trip computer.

          But you don’t have to take my word for it. Just compare the city and highway mileage ratings on just about any vehicle made, and then take into account that the typical rush-hour traffic congestion we see here in Northern Virginia on I-66 and 28 involves a lot more accelerations and stops per mile than the EPA city driving cycle does.

          Accelerations and stops. As a general rule, the more of those you have, the more gas you use. More of it goes into heating up brake rotors than into making the car go down the road.

          Driving at high speeds can also use more gas but the additional gas used is nowhere near what making 25-30 stops per mile uses (add in the amount of time spent sitting at 0MPH while the engine is burning .2 gallons per hour, too).

          • If you got one, then I’m sure you have seen it in congestion as I have and unless it’s mega congestion, it’s pretty much a wash. What you lose in congestion, you also lose at higher speeds.

            Beyond that, the actual cost to relieve/reduce that congestion in urban area, far, far outweights the additional gas tax paid for worse mileage.

            Gas taxes even from poor fuel mileage cars, comes nowhere close to paying for highway infrastructure in urban areas because of higher land costs, higher labor costs and the fact that you cannot work 24/7. A mile of 2 lane road in a rural area can be built for 5-10 million or even less. That same road in an urban area can cost 50-100 million and more. If you had the same number of cars on those two roads – they’d generate roughly the same revenues.. even in congested conditions.

          • Larry:

            No. It is not a wash. Unless you are (maybe) talking about a hybrid. Steady-state driving at 60-65MPH will ALWAYS give you better gas mileage on a conventional non-hybrid than stop-and-go driving with 25-30 stops per mile. And, as I’ve stated previously, this can be as much as double the gas mileage.

            Bottom line: VDOT gets more gas tax revenue from congestion. VDOT gets more gas tax revenue from increased volume even before it gets to the point of congestion.

          • Yep, I don’t miss the traverse of I-66 one bit. I used to take it from South Riding to Arlington it was painful before the “toll”. It became a lot more painful after the “toll”.

        • They say that a typical fuel consumption increase due to congestion is 80%. It may be higher in my case because I tend to stay in the right lane and use cruise control during free-flow conditions. (It’s amusing to watch the typical Virginia driver’s reaction to someone going the speed limit in the right lane. It really confuses them).


          “On the road sections covered by the NGSIM data, we found that traffic congestion typically lead to an increase of fuel consumption of the order of 80% while the traveling time has increased by a factor of up to 4. We conclude that the influence of congestion on fuel consumption is distinctly lower than that on travel time.”

          • so assume that you got 1/2 your normal gas mileage for the whole tank – how much more would you be paying ?

            What would that increase be over a year? How about how much it would be per mile for a years worth of mileage?

        • Larry: If I got half my normal gas mileage… I would be paying double what I would normally pay in gas taxes.

          In other words, I would be paying MORE for driving in worse conditions.

          If that’s not a “congestion tax” I don’t know what is.

          • correct. I’m asking how much more in actual money – would you be paying for your share ?

            How much do you normally pay in fuel tax with your regular/best gas mileage – per tank?

        • These days? The amount of additional gas tax money I pay due to congestion is pretty much zero.

          I bought a Chevy Volt when I figured out this racket. I mostly run it on battery, and pre Covid-19, I might burn 2-3 gallons of gas per week…with a 60-mile round trip commute, 5 days per week. Post Covid-19, I burn no gas at all per week. In fact just the other week it ran a “maintenance mode” and forced the gas engine to run for a few minutes because I hadn’t run it on gas in over a month.

          Prior to getting the Chevy Volt, I would try to commute to work during off-peak hours. Typically I would average as high as 32MPG. The rare times I commuted to work during peak hours, that car got around 17MPG.

          After getting the Chevy Volt, I no longer really cared about commuting during off-peak hours. I found that the Volt gets really good range in stop-and-go traffic, and is a nice way to “beat the system”. So I would happy leave the office at 5pm instead of waiting till 7pm.

          So..with the Volt…for driving 300 commuting miles…I might pay the gas tax on 3-4 gallons, what is that, about $1?

          With the other car, driving 300 commuting miles during peak hours used about 17.6 gallons and the gas tax on that cost about (using 25 cents per gallon) $4.40.

          Same car, driving 300 commuting miles during off-peak hours used about 9.3 gallons and cost about $2.32 in gasoline taxes (again using 25 cents per gallon).

          I’m just estimating 25 cents per gallon. Too lazy to go look up the exact gas tax federal, state, and local right now.

          • so I was keying off the fact you were saying that people pay more gas tax for congestion.

            Did not realize you were not that person!

            What I was trying to get at is how much a typical gas engine driver would pay in additional gas tax from congestion.

            Just trying to get a feel for the dollar amount and whether or not that increased amount would come anywhere near to paying for additional congestion-reducing infrastructure.

            It’s my bet it does not.

            But on your Volt -are you paying an additional fee when you pay registration fees? I thought that law had passed and the fee is based on your mileage and type of high efficency vehicle.

        • Larry:

          The registration on my Volt does not expire until May 2021. So I have not had to pay any extra fees for it.

          And, if this law that says that an expired vehicle registration may not be used as a reason to pull over a vehicle passes, maybe I won’t bother to renew it at all.

        • More about being “frugal” than being “green”. I bought it used. For less than the bluebook on a same-year, same-mileage Toyota Corolla. They have pretty bad resale value.

        • I even installed a 240V subpanel to charge it in my garage. I did the work myself. It can charge off 120V, but that takes 8 hours. I can charge it in 4 hours at 240V. I ran 6-awg aluminum SER cable to the sub panel so it’s 50 amps. The Volt only needs a 20 amp 240V circuit for charging but I wanted room for expansion.

        • No solar.

          I did, however, insulate and air-seal my house while it was being built to the point where the heat pump can maintain 68F inside when it’s 20F outside and not use any aux heat.

          Also have very few west-facing windows and lots of trees on the south and west side which helps to SIGNIFICANTLY (compared to my old house) reduce solar heat gain in the summer.

          And I had the builder put the AC condensing unit on the east side of the house so the summer afternoon sun won’t hit it.

        • In 2015, the average annual cost to maintain one of the U.S. National Highway System’s 220,000 miles was $28,020

          That would be $12.67 from every man, woman and child for each mile of road.

          Here’s a list of all the roads in Highland County. I don’t have time to add up all the distances but it looks like about 350 road miles.

          That would be $4,551.98 for each man, woman and child in Highland County.

          Steve reports the statewide tax on gas at 28.8 cents per gallon.

          That would equal 15,805 gallons of gas for every man, woman and child.

          At an average of 20 miles per gallon and 30 miles per hour, every man woman and child would have to drive 10,536 hours per year. That’s more time than exists in a year.

          So, I don’t know Larry … I just have a hunch.

          • Well you gave it a good shot – but you screwed up.

            NHS is a significantly higher design standard that Virginia 600 series roads.

            And you also need to factor in the time for maintenance, it’s not necessarily annual and especially so for 600 series roads – they can go years without anything being done other periodic ditching and repairs…

            rural roads are pretty cheap – they just don’t have the volumes of traffic that would beat them up.

            Finally, you have absolutely no idea how much money that Highland County actually generates in gas taxes, much less how much VDOT spends on mainteance.

            You’re doing a fair amount of hand waving here.

          • Another way to look at it is how many trips over a 1-mile stretch of road at 20MPG does it take to pay for the maintenance of that road?

            At 28.8 cents per gallon in a 20MPG vehicle each trip over that road contributes 1.44 cents (cents not dollars). 28.8 / 20 = 1.44

            It would take 1,945,833 trips over that road to generate enough tax revenue to pay for one year of maintenance. 28,020 / .0144 =1,945,833

            It would require an average of 5331 daily trips over that road to pay for it’s maintenance: 1,945,833 / 365 =5331

          • and what I’m saying is that you generate that much revenue for that mile of road no matter what type of road it is – whether dirt or 8 lane interstate.

            Roads in urban areas are much more expensive to build, maintain and operate.

          • Don, Highland County may very well be underpaying its fair share of road maintenance — I don’t know. But I can promise you that Highland Count roads are not maintained to anything near Interstate standards. Find a more appropriate yardstick and I might believe you on this one. (OMG, I’m agreeing with Larry. Arrrrrrrrrrrggggggghhhhh!)

          • Don’s basic premise is that rural counties pay less maintenance costs than they generte in gas taxes without having one piece of real data to prove it.

            As far as I know, there is no data that shows what each county generates in fuel taxes nor how much is espeneded on road maintenance and operations.

            It’s true that rural counties have a fair number of Byrd era roads which in some cases are barely paved cowpaths. In fact, some still have dirt roads and roads so narrow they do not have dividing lines on them.

            OTOH – we also don’t have data for Fairfax and NoVa in terms of how many fuel tax they generate nor their roads maintenance and operations costs. We also don’t know this for new roads and improvements even though Virginia maintains a the 4th largest road system in the nation – because unlike most states, it also is responsibility for county roads.

            That data may exist but I have had no luck in finding it. There are some commenters to BR like Bosun that may know.

        • Urban roads also get MUCH more traffic. 28 between 29 and Westfields Blvd (in Fairfax) got 119,000 trips per day in 2019, according to:

          • they very much do – they get beat up much more and fixing them is much more expensive.

            A rural road may be barely wide enough for 18-wheelers to pass each other, no ditches, no sidewalks, etc.. minimal culverts for runoff, etc…

            Urban road have wider lanes, ditches, sidewalks, major runoff infrasructure, etc.. and when it goes down, it has to be fixed NOW whereas a rural road may end up with cones for a week or two.

            on a mile per mile basis – rural is minimal and cheap and urban is heavy duty and expensive to maintain and operate.

            We typically do not have basic data for Virginia roads by jurisdiction. HOw much that jurisdiction generates in fuel taxes and how much it needs for maintenance and operations.

            VDOT has to maintain roads to standards. They can’t say “we’re out of money”. They CAN and DO – do that with new roads and that’s why there are so few new ones and often they are tolled.

            One intersection with traffic signals can cost a million or more. One interchange can cost 40 million to 100 million and more.

            Think about a place like Fairfax with a million people maybe paying 500 million a year in fuel taxes. Sounds like a lot of money but it’s not when you have hundreds of miles of roads.

  16. For FY20 Transurban reported a statutory loss of $153 million, which compares to a statutory profit of $170 million achieved in FY19.

    And now they want to sell a stake in their North American toll road business.

  17. … and causes $10,250 in damages to the roadway.

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