Early profitable mass transit - taxed until it failed

This is a . . . frustrating interview.  From Anatomy of an ‘American Transit Disaster’ by David Zipper.  The subheading is In his new book, historian Nicholas Dagen Bloom chronicles the collapse of public transportation in US cities — and explains who really deserves the blame.  The journalist, Zipper, comes across as a streetcar fanboy trying to have a mass transit conversation.  He can't ever really shake off the shock that the very oldest form of mass transit just does not meet the needs of the modern customer and the interview keeps coming back to streetcars instead of mass transit.  The book might be quite good but it is hard to tell from this interview. 

Bloom has written a new book, The Great American Transit Disaster: A Century of Austerity, Auto-Centric Planning, and White Flight.  I want to know what's in it.  What is his thesis?  I would hope that the interview might reveal that.  Zipper's monomaniacal obsession with streetcars stands in the way.

American mass transit is an interesting case study.  It was once financially healthy and prevalent in most major cities.  It is currently moribund, declining, and potentially facing a financial catastrophe depending on what happens with city activity post Covid-19 shutdowns and the consequences of public policies post George Floyd riots.  Most cities have seen a collapse in center city populations and commercial activities and a corresponding collapse in mass transit ridership.  We are talking 30-40-50-60% declines.  The declines that are usually the commercial kiss of death.  

In the American public intellectual conversation however, there is an enduring love affair with mass transit.  It ought to work.  It should be wonderful.  That it has not worked for the past fifty years is laid to bad planning, the evil of cars, redlining, noxious citizens, mismatched or ineffective public policies, racism, etc.  Oh, and as always with any such public policy favorite - inadequate public funding.

My view is more prosaic.  I do not have the bounty of deep knowledge of the minutiae of mass transit history.  To me, mass transit is solving a straight forward problem for a consuming public - can it get them to where they want to be safely, cheaply, and reliably?  It is like most commercial transactions in a market where people have choices.  You simply have to perform at the minimum market expectations to stay in the game.  That may not be easy but it is conceptually straight-forward.

And that is the question unanswerable in most American cities today - Does the existing mass transit infrastructure get you to where you want to go, when you want to go, safely, cheaply and reliably?  The answer is almost always No. And, expensively no!

The biggest weakness is the "cheaply" issue.  Not so much whether the cost of a fare matches the cost of gas and insurance and parking driving your car.  Or any of the other more sophisticated calculations.  The chief culprit is that Americans have become much more productive.  There is time value to consider.  The more productive Americans become, the faster the mass transit needs to be able to deliver them to their destination in order to remain competitive.  A different way of putting it is that mass transit has to improve the speed at which it delivers people to their destinations at a rate greater than Americans increase their productivity.  That has not happened and has no prospect of happening.  Mass transit falls farther and farther behind in the economics of delivering people cheaply given what people's labor time is worth.  

In the fifty years since mass transit began disappearing into the dust bin of history, it has appeared to me that the reasons were relatively plain.  Americans became much more productive (their time has much greater value attached to it), driving has become dramatically safer both empirically and in terms of the perceived alternatives, and Americans became much more widely distributed and less dense (they moved to suburbs).  Additionally, American work became more complex and intricate.  More people work more jobs in more places doing more different things.  

If the transit system takes forty-five minutes to complete a trip that is only twenty-five minutes in a car (and doesn't cost much less than the fully amortized cost of my vehicle), then why would I take the mass transit?  If my productivity earns me $100 an hour, then taking mass transit casts me $33 in lost productivity compared to my car.

To me, the increasing productivity of the American worker and their corresponding time opportunity cost has been the biggest impediment to mass transit.  The shrinking coverage networks is the second.  Reliability is the third issue.  Poor cleanliness and safety are merely the visible faces of an economic solution that is not solving the problem it is intended to solve.

It is not funding, or racism, or suburbia, or subsidized cars, or free parking, etc.  These are all nice little Just So stories for the authoritarian and totalitarian mind.  As always, there are occasionally small nuggets of real issue buried deep in the lard of self-deception.  The reality is that no-one seems to know how to craft a mass transit system which will safely, cheaply, and reliably get people to where they want to be when they want to be there given the alternative choices they readily have.

It frustrates the living daylights out of the authoritarian and totalitarian mind.  That free citizens should make the good decisions that best suit the needs, circumstances, and constraints of those informed citizens.  

It may entirely be the case that my interpretation is completely wrong, but I suspect it is not.  I am open to evidence that I am wrong and would be eager for insight that has completely passed me by.  I was hoping that there might be something in this book or interview which might change my understanding of things.

But I am not seeing it.  The interview comes across as a long whinge about the past glory days of mass transit and how stupid American policy is when crafted by Americans seeking to optimize their own welfare.

The interviewing journalist seems like a typical leftist with all the normal mind worms who cannot believe the author is not completely buying into the journalist's nonsense.  Bloom does seem resistant to the more obvious foolishness such as the idea that the death of mass transit is due to some sort of car conspiracy.  And, no it's not white flight, either.  

But what is most striking from the piece is that there is no positive vision for how mass transit could or ought to work in the future.  If the most enthusiastic proponents of mass transit cannot envision how mass transit can solve the simple equation of how to safely, cheaply, and reliably get people to where they want to be when they want to be there, compared to the viable alternatives already in existence, then it seems like the mass transit dream is truly dead.  At least for the time being.

Because the market system is always adaptive.  Eventually citizens may not have as high a time value of money, may freely choose to live more densely, and may choose to live in a fashion which might make mass transit viable again.  We should hope we don't come to that reduced circumstance, though many public officials seem dedicated to that outcome.

There was one striking insight from Bloom that I had not known.  I knew that most city streetcars and bus services were private companies and that they were quite profitable in their time.  What I did not know is that City governments became dependent on them for tax revenue.

Was there a perception that the streetcar companies were making money off the backs of commuters? If so, I imagine that when streetcar companies started struggling, people might say, “Screw you guys. You don’t deserve our help, because you’ve profited at our expense for a long time.”

Absolutely. It was hard to shift away from the popular view of the transit company as this evil empire. In an era of skepticism of big business, it was very hard to see the public utility side of transit service. Also, city governments became very reliant on the taxes coming out of transit companies.

Yes, it’s striking today that not only did cities refuse to subsidize transit for decades, they taxed them. You included an example of Atlanta in the 1960s, when 5 cents of a 35-cent bus fare went to taxes. What was the thinking behind that?

At the beginning of the 20th century, streetcars did make money as enterprises. They were able to pay these taxes and still turn a profit. Cities had become so accustomed to transit being a contributor to municipal budgets that it was very hard to shift that approach until they essentially failed.

Sounds like cities might have been the authors of the financial death of mass transit.