Why Do We Subsidize Inter-City Rail When Buses Can Do the Job?

Rail vs…

Liberals love buses — at least when the buses are run by municipally owned enterprises with union workforces and operate at a loss that requires government subsidies. When buses provide profitable, inter-city service that competes with Amtrak, well, they’re not quite so enamored.

But conservatives love profitable, inter-city buses, which represent a triumph of entrepreneurial innovation in a competitive, unsubsidized and lightly regulated industry. A new study, “Supporting Passenger Mobility and Choice by Breaking Modal Stovepipes,” backed by the Reason Foundation, Taxpayers for Common Sense and the American Bus Association, finds that buses overall provide more cost-effective service than Amtrak. (Hat tip: Ron Utt.) Based upon an analysis of 20 representative routes, the study finds:

  • In general, motorcoaches provide more schedule options than Amtrak.
  • Total travel time is comparable — shorter for the train on 10 routes, and shorter for buses on 10.
  • Bus fares were lower in 13 of the 20 routes examined.
  • The cost to provide service is 25% less than Amtrak when both capital and operating costs are considered.
  • Amtrak covered its capital and operating costs for only two of the routes examined — the Northeast Corridor and the Washington-to-Lynchburg service.
  • Except in the Northeast Corridor, where Amtrak’s Accela service uses electric locomotives, buses emit half the CO2 per passenger than the trains.

“As we strive to improve mobility and our infrastructure in this time of debt and deficits, we need to spend our transportation funding more wisely than ever,” said Shirley Ybarra, senior transportation analyst with the Reason Foundation and a former Virginia secretary of transportation. “Before spending taxpayers’ money Congress needs to closely examine the benefits and cost-effectiveness of alternatives.”

The same logic applies to state policy here in the commonwealth. Is the state investment in inter-city rail providing inter-city connectivity that the private sector isn’t already… at no public expense?

Update: As coincidence would have it, the Department of Rail and Public Transportation has just released a draft statewide rail plan for public review. As part of its transportation-funding overhaul, the General Assembly dedicated a share of sales tax revenue to the Intercity Passenger Rail Operating and Capital Fund (IPROC). Thus, Virginia is expected to spend $44 million in revenue on inter-city rail this fiscal year and $56 million by FY2018, an 86% increase in funding. I’m surprised the bus lobby isn’t raising hell!


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17 responses to “Why Do We Subsidize Inter-City Rail When Buses Can Do the Job?”

  1. larryg Avatar

    here’s where the conservative approach to transportation – pro road, anti-mass transit goes off the rails. and Mr. Utt and company need to honestly and publically address it.

    As cars get more and more fuel efficient – it becomes increasingly clear that he “perfect” user-fee – the tax on gasoline is no longer sustainable.

    it no longer can provide the scope and scale of road infrastructure to serve the auto-central demand.

    you can increase the gas tax – but the future of the gas-tax as a sustainable source of road money is not promising.

    the editor of TollRoadNews – Peter Samuel (who just sold it) has advocated that roads be paid for with tolls – that there is no better “user-fee” than a toll – which if you think about it is the “farebox” of roads.

    so what has happened? Virginia totally bailed on the road “farebox” and decided that all of us should pay for roads no matter our direct usage of them.

    and from that – we end up with Mr. Utt’s view that when you take that very same sales tax money and spend it on mass transit – that you’re “subsidizing” it and not requiring that farebox pay for it in toto.

    so let’s be honest – the gas tax as a sustainable funder of roads is on life support even with indexing, and drivers are opposed to tolls by 3-1…

    we have a mobility culture that favors “free” roads. Users of roads don’t even consider maintenance and operation costs as real costs so no wonder they also reject that idea for mass transit.

  2. The gas tax accounts for less than 50% of the cost of building and maintaining roads nationwide. Thus, roads are subsidized… and, by extension, buses are subsidized. I do not believe that those subsidies are taken into account by this study. However, those road subsidies account for a very small percentage of the capital and operating cost of inter-city buses. Take away the road subsidies, and bus costs would be somewhat higher. But they still would be cheaper than inter-city rail.

    Even so, if we want economically rational transportation policy, we need to shift to a system, whether tolls as LarryG suggests, a Vehicle Miles Traveled tax or some other means, by which road and highway users pay their full cost.

    Only when that happens will the authors and sponsors of this study be able to argue that rail subsidies should be eliminated as well.

  3. Peter Galuszka Avatar
    Peter Galuszka

    “Liberals love busses?” What kind of bullshit is that?

  4. Peter Galuszka Avatar
    Peter Galuszka

    I mean, Bacon, do actually know any liberals personally or are you making this up?

  5. It’s right there in the by-laws: liberals and progressives must support mass transit, including buses. It’s pretty basic.

  6. Peter Galuszka Avatar
    Peter Galuszka

    Is that next to the Smart-Growth bylaws? Or is there a separate and abridged version for Smart Growth Conservatives?

  7. DJRippert Avatar

    Just think – if we went back to stage coaches we wouldn’t even need paved roads. Think of the tax savings!

  8. Peter read Greater, Greater Washington. Most of the posters worship at the thrones of mass transit, especially anything with tracks, and everyone living in multi-family housing. And I’ll bet you most of them voted for Obama.

  9. larryg Avatar

    well… this study is just yet another one of a long string that basically attacks the premise of Amtrak as a service. Pretty comprehensive…

    I’m a little skeptical that the actual travel times of buses are comparable to Amtrak especially for longer trips that include a rush hour city enroute.

    buses are wretched ways to go hundreds of miles… IMHO.

  10. Peter Galuszka Avatar
    Peter Galuszka

    All due respect to Greater, Greater Washington but I am not sure they are the progeny of the progessive movement. Even they might agree.

  11. Darrell Avatar

    Trains are good up to one day’s travel or about 600 miles. After that the plane is the way to go. Buses are good when they only charge 15 to 30 bucks to go the same distance. Chinese buses were a good idea badly implemented. Look at Megabus with variable European style prices. Then there is Greyhound, a bus at a train price.

  12. re: ” Then there is Greyhound, a bus at a train price.”

    ha ha ha

    Greyhound will tell you that if they could run their buses with bald tires and bad brakes like the fly-by-night asian versions, they could be cheap too!!!!

    I think there is a valid role for AMTRAK and if Ron Utt and company succeed in getting it defunded, we’ll all be the worse off because of it.

  13. Ann Cundy Avatar
    Ann Cundy

    JAB, do you take Greyhound to DC ? This seems like a false argument of bus vs. rail based solely on economics if few, if any, choice riders would actually use inter-city bus. The notion that buses are roughly comparable to rail in terms of travel time is laughable. Buses sit in traffic. Trains don’t.

    1. Buses get preferential access to HOT lanes on the Washington Beltway today, and they’ll get preferential access to HOT lanes on Interstate 95 when they open. They won’t lose much time sitting in Northern Virginia traffic.

      And, no, I don’t take Greyhound to D.C. I would drive because I have a car. Greyhound serves the carless population. If demand grows for more upscale traveling accommodations, I predict that the market will respond with buses providing more room, Internet access, electric plugs, etc. The advantage of buses is that they’ll be able to serve locations — Tysons, Reston, whatever — that aren’t served by Amtrak.

      Don’t get me wrong. I like traveling by train. I would love to see trains become economically competitive modes of transport. Indeed, I’ve offered numerous suggestions on this blog how that might happen. As long as we subsidize trains, however, we will never get around to making the financial, regulatory and labor-force changes needed to make them competitive.

      1. re: ” As long as we subsidize trains, however, we will never get around to making the financial, regulatory and labor-force changes needed to make them competitive.”

        can you point to another country that you would recommend as a model for what you advocate?

  14. re: “buses sit in traffic”

    that’s the part about Utt’s study that was less than clear and not very convincing.

    The odd thing about this is that all the world’s OECD countries as well as many developing countries – as well as THIS country in the 1850’s value passenger rail as an integral part of the mobility infrastructure.

    if you want to go from Norfolk to DC, I find it very hard to believe on a direct travel time basis that the bus beats Amtrak.

    but the study does not appear to compare elapsed time but rather adherence to schedule.. In other words, buses build their schedules based on anticipated congestion conditions.

  15. just to provide the other side to the issue:

    ” The causes of the decline of passenger rail in the United States were complex. Until 1920, rail was the only practical form of intercity transport, but the industry was subject to government regulation and labor inflexibility.[13][14] By 1930, the railroad companies had constructed, with private funding, a vast and relatively efficient transportation network, but when the federal government began to construct the National Highway System, the railroads found themselves faced with unprecedented competition for passengers and freight with automobiles, buses, trucks, and aircraft, all of which were heavily subsidized by the government road and airport building programs”

    then this:

    Amtrak Office of Inspector General
    Public Funding Levels of
    European Passenger Railroads

    ” Overall Conclusions

    After examining a representative sample of European Passenger Train Operations over a multi-year period, we found that:

    a) When all revenues and expenses for the entire passenger train system are taken into consideration, European Passenger Train Operations operate at a financial loss and consequently require significant Public Subsidies, and

    b) The average annual subsidies for European Passenger Train Operations are much higher than those for comparable Amtrak services”


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