Good idea or bad idea?

orange · December 17, 2002, 21:18

Looking towards the future here, of course...

The creation of a FREE environmentally friendly innercity masstransit system in all major cities organized constructed and operated under government supervision (IE Government employs the company to build it, employs the workers that run it and maintain it)

Traffic reduced, employment lifted, environmental concerns aleviated, paid for with a small corporate tax increase and advertisement sales (you know, like ads in subways?) and free for use so the poor and workers don't have to pay money to use it yet get the same transportation they'd normally get to work or wherever.

Good idea or bad idea?

*End Is Forever* · December 17, 2002, 21:33

Of course it all sounds good... but how would you pay for it? Also, cross-elasticity of demand between public transport and private transport (ie, cars) is notoriously inelastic. Many people won't ditch their cars even if the service was free... and if they did, wouldn't this overstretch the system, causing them to leave it? I think you overestimate the importance of cost when it comes to commuting...

All in all, nice idea, but completely pie-in-the-sky. Ah well.

Boris Godunov · December 17, 2002, 21:41

Banning/severely limiting private transportation in the inner city area concerned would eliminate the elasticity issue. If it's the only option, people would have to take it.

I can't see how it would be free, though, unless there was a general increase in taxes. Which isn't free.

orange · December 17, 2002, 21:42

no, but it would discourage future purchases of/use of automobiles in cities when transportation is free. Just because people might still own them for use outside of the cities doesn't mean they'd use them in the cities. I understand the microeconomics of it all, but I don't think it applies when the alternative is free and the status quo costs fuel money and maintenence.

Also: I said it would be paid for with a small increase in corporate tax as well as ads.

*End Is Forever* · December 17, 2002, 21:47

It definitely does apply, particularly amongst those who can easily afford to take their cars into the city (which tend to be the bulk of metropolitan motorists - is it the rich guys or the low-paid workers on the public transport at the moment? thought so); they'd much rather pay for that than share dirty, overcrowded, less safe public transport.

Also, I take issue with the "small" increase. Do you realise how much public transportation costs?

Imran Siddiqui · December 17, 2002, 21:52

Also: I said it would be paid for with a small increase in corporate tax as well as ads.

As Iain said, small? Public transportation is expensive!! Especially if you make it free.

Boris Godunov · December 17, 2002, 21:59

AFAIK, the NY Mass Transit Authority is one of the few systems where fares account for the bulk of the budget. At least I think that's what I heard.

Urban Ranger · December 17, 2002, 22:05

Ads can go a long way, esp. for public transportation that moves huge crowds around.

*End Is Forever* · December 17, 2002, 22:07

Not as much as you might think. Captive market... same people every day. Besides, advertising is on a downer at the moment...

Imran Siddiqui · December 17, 2002, 22:13

AFAIK, the NY Mass Transit Authority is one of the few systems where fares account for the bulk of the budget.

I think Adam Smith said that the Washington Metro system had fares account for the bulk of that budget as well. Remember him saying that NY fares are well lower than most other public transportation systems?

Boris Godunov · December 17, 2002, 22:23

Yes, NY fares are well lower, but daily ridership is much higher than anywhere else in the country.

Imran Siddiqui · December 17, 2002, 22:47

Yes, but you have to DEAL with that daily ridership by having more facilities available to them than anywhere else.

Boris Godunov · December 17, 2002, 22:48

Yeah, but I think the ratio of riders to facilities in NYC is quite larger than anywhere esle. Hence why we have the most crowded mass transit system.

Imran Siddiqui · December 17, 2002, 23:05

Yeah, but I think the ratio of riders to facilities in NYC is quite larger than anywhere esle. Hence why we have the most crowded mass transit system.

That's a result of the low fares.

It's an equilibrium... low fares and low-end facilities.

Urban Ranger · December 17, 2002, 23:10

Originally posted by *End Is Forever*
Not as much as you might think. Captive market... same people every day.

Can say that about just every single ad sector.

Originally posted by *End Is Forever*
Besides, advertising is on a downer at the moment...

Globally or just in the UK?

Boris Godunov · December 17, 2002, 23:21

Well, according to the NYC Transit Authority 2001 Consolidated Statement of Operations, their total operating revenues were $2.3 billion, out of a total $6.3 billion in revenues. However, in 2000, the total revenues were $4.3 billion and total operating revenues were $2.3 billion still. So that's over 50% of the budget. The extra $2 billion for 2001 came from a capital campaign. You take that out of the equation, passenger revenues account for more than subsidies.

Zkribbler · December 17, 2002, 23:50

Good idea. But it probably won't work.

Good idea, because of the things you said. Lesser traffic and better air. Although some point out that many people won't get out of their cars, many others will.

The working poor--who will be the major beneficiaries of this system--are the people most likely to spend any newly acquired monies. So, this money will be pumped right back into the system, resulting in a boon to the economy. Plus, the working poor will be able to afford a slightly better life style.

Another source of funding would be a parking tax on downtown parking lots. The ol' carrot-and-stick.

The reason it probably won't work is the start-up costs. Even with your revenues and my parking tax, it still won't be enough and the general fund would have to be tapped into. That means a tax increase. And that won't be popular.