Why Transit is an 'Inferior Good'

Samuel Staley's picture

In my last post, I suggested that transit's "resurgence" is, ultimately, much ado about nothing. Transit's increased ridership, while important for transit managers, will do little to change fundamental travel patterns of US urban areas.

Today, I would like to suggest that transit's inability to pierce the hold of automobility on US urban areas is the least of its worries. The real long-term problem faced by transit agencies is that their service-fixed route transportation modes designed to carry large numbers of people in buses or trains-is what economists call an "inferior good." The term is not intended to be pejorative. It's a technical one and characterizes an important economic relationship between income and the demand for a specific product or service. As our income increases, we consume less transit, opting for alternatives, most notably the automobile.

Mobility, on the other hand, is a "normal good": as our income rises, we want more mobility, in terms of flexibility and speed. (Some might think that we devote a higher share of our budget to transportation as our incomes go up, but historically transportation has tended to average around 9 to 10 percent.) Those transportation modes that provide more mobility will see demand increase. That's one reason why vehicle miles traveled and air travel have grown so drastically along with our nation's wealth, while public transport's share of total travel has fallen.

Can transit break out of this economic trap? Possibly, but it will be a long, difficult road. Transit's long-term viability will depend on its ability to provide a reliable, superior alternative to its competition, not a "second best" alternative that consumers choose when they can't afford their first choice (e.g., the automobile). If transit managers want to grow their customer base, let alone gain market share, they will have to provide very high levels of quality and service.

This task is complicated by the fact transit agencies don't rely on their customers for their revenue. Only about one third of transit's revenues come from customer fares. The remainder comes from taxes and federal grants (often funded by road users). Transit agencies have stronger incentives to please grant makers or elected officials than the people that use their service, or, more importantly, could potentially use their service.

Transit can compete, but only if managers make the strategic decision to focus on their core services-providing a superior travel alternatives-and exploit niches in the travel market (such as express bus services). Also, some transit agencies have wisely focused their resources on providing superior service along heavily traveled routes, or in urban neighborhoods where transit provides a complementary alternative, rather than a substitute, for other modes.

What transit cannot do is depend on high gas prices to make us worse off financially in order to push us out of our cars and onto buses and trains. Nor should transit advocates use public policy to purposely degrade the quality of transportation alternatives such as the car to tip the scales unfairly in transit's favor. Those approaches impoverish us all and threaten the economic competitiveness of our cities as well as the economy.

Sam Staley is Associate Director of the DeVoe L. Moore Center at Florida State University in Tallahassee.



Michael Lewyn's picture

a bit of a self-fulfilling prophecy

in this respect: because government has supported road construction for so long, it has essentially MADE transit an inferior good. If roads were, like early 20th century streetcars, private from Day One, transit and cars would be on at least a somewhat more equal footing.

To put it another way- when government throws money into the Black Hole of automobile dependency, it makes transit inferior. For example, suppose government builds a road to East Outer Suburb (EOS), but its only transit service to EOS is a bus that runs once an hour. Obviously, transit will be an inferior good in EOS.


Excellent point on the government's role of interfering with the private enterprise of transportation. Sure, we could level the playing field now, make gas taxes encompass all costs related to the automobile, and raise the price by a dollar or so, but there would still be an innovation gap. The auto industry has been given a research and development head start.

I think something could be learned from Indiana (of all places) in their leasing of the toll road to a private company. Their use of those funds is another story. Rail is at a powerful disadvantage in this country, because all of their "roads" have to be privately owned and operated, wheras cars and trucks are essentially given the road (puny gas taxes not withstanding). If all highways were tollways, the true costs would much more easily be captured.

If we were to lease out all highways in this country, and then use those funds to improve the railroad infrastructure (while forcing the new operators to improve the highways), I feel that would be a fair re-balancing of private transportation. We would, however, have to force the railroads to spin off into separate track holding companies and shipping company, and mandate they allow all shipping companies to use their rails at the same rates. Otherwise it would be like GM leasing a toll road and only allowing GM cars to drive on it. That would be bad (but not unrealistic, given GM's history).

Oopps, actually that is wrong

Drivers have supported road construction.

The federal government collects an 18.4 cent tax on every gallon of gasoline. That user fee is paid by highway drivers. That is the money the federal government spends on roads.

And, actually, the federal government subsidizes transit by taking a portion of that highway driver user fee and combining it with general fund revenue to pay for transit.

Dialogue based on facts can move us forward. Why do transit advocates make everything an us/them argument of good vs evil?

* I think the word "inferior" got people mad even though it is used in the economic context definition.

Could you clarify which claim was wrong?

I appreciate the effort to get clear about the facts, but I can't tell which post this refers to. Are you saying that the gas tax produces enough revenue to cover the cost of road building and maintenance?

In my experience, it isn't the transit advocates who are the most likely to cast things in stark, adversarial terms. Most transit advocates are critics of dependency on the automobile, not the automobile as such. It seems more common for the critics of transit to be critical of the very idea of creating public transit, as such.

Clearly there is a certain level of ideological passion on both sides. I'm always surprised when I hear somebody arguing that transit advocates want to take their cars away, or force them to ride buses with the unwashed masses. Then there is this idea that we ought simply to let something called "the market" work. Actually, I wish we could put that sort of fearful stuff aside and focus on the practical challenge of creating safe, convenient, affordable, equitable and sustainable mobility. Markets are an important part of any solution, but markets often need to be built. And to understand what is going on, we need to understand that sometimes things are actually not part of the same market.

The first task would seem to be establishing a little more integrative approach to planning than we usually manage: on the one hand, thinking about land use and transportation together, on the other hand, understanding that planning (and governance in general) shouldn't just be about regulation. Planning is often about markets, since if we are clear about what we want-- especially the range of choices we want-- entrepreneurs will be able to deliver it.

The underlying reason that I questioned framing the issue in economic terms is that I think it tends to set up (or maybe reinforce) a false and ideologically charged dichotomy between market and non-market approaches.

Inferior Good With Greater External Costs

I think transit generally is an inferior good for travelling between any two points. For example, it takes me about 15 minutes to drive to downtown Oakland, but it takes me about 30 minutes to take the bus to downtown Oakland, because I have to walk to the bus stop, the bus has many stops along the way to let people board, etc.

But driving creates much greater external costs than taking the bus. Everyone who drives creates more congestion, more of a shortage of parking spaces, more danger for pedestrians, etc. Even apart from making the city less livable, driving can create congestion and parking problems that are so severe that it becomes very hard to drive very and hard to take the bus (which is stuck in traffic like the cars).

I think the best way to describe the choice between driving and transit/bicycling is by imagining a game where each player has two possible moves. Move 1 gives the player 100 points and reduces the score of everyone near him by 1 point. Move 2 gives the player 50 points and doesn't change the score of anyone near him.

In situations where lots of people are near each other, people will have lower scores if everyone makes Move 1 than if everyone makes Move 2. Yet all else being equal, people will make Move 1 to maximize their own scores. (This is a Prisoners' Dilemma on steroids. Because there are so many players, you cannot adopt a stragegy to get the others to play cooperatively, as you can with the one other player in the Prisoners' Dilemma.)

Likewise, the automobile gets you where you are going maybe twice as quickly as bicycle or transit - like getting 100 points for Move 1 instead of 50 for Move 2. But the automobile creates worse problem for everyone around you (noise, danger to pedestrians, parking problems, congestion, etc) and for everyone else in the world (high oil prices, global warming) - like taking one point off everyone else's score when you make Move 1.

In this situation, transit is an inferior good from the point of each individual making the choice of whether to drive or take transit. But it would be better for all the individuals if everyone took transit.

This sort of game is one example of why we need laws to limit individual behavior that harms others - a point that laissez-faire economists and the Reason Foundation cannot deny but do their best to ignore.

Charles Siegel

The real inferior good is Staley's bogus argument...

>>The real long-term problem faced by transit agencies is that their service—fixed route transportation modes designed to carry large numbers of people in buses or trains—is what economists call an “inferior good.”

Seems like this depends on the route / city / etc. In many places, riding the bus is seen as a lower class thing to do. But in other places, even the wealthy take the subway because transit is in fact not "inferior" in these cities. It is a "normal good" according to the authors definition - because the amount invested in the network is equal or greater than the amount that has been invested in the roadway network.

There is clearly no inherently "inferior" mode of transportation - there is only an "inferior" mode based on how efficient and "useful" we have made existing service through our previous and ongoing investments.

>>What transit cannot do is depend on high gas prices to make us worse off financially in order to push us out of our cars and onto buses and trains.

Um, why not? If automobiles can solve the problem of moving everyone from point A to point B in an environmentally friendly way, while also not running into problems of congestion, and requiring less than 10% of the take-home pay for the overwhelming majority (ie >90%) of people, then we do not need transit. But it is growing increasingly clear that this is not the case.

>>Nor should transit advocates use public policy to purposely degrade the quality of transportation alternatives such as the car to tip the scales unfairly in transit’s favor.

Such as what? Not expanding a road and instead building a rail line. Is that "unfair"? By whose standard?

Would raising taxes on the wealthy to provide for more transportation infrastructure be "unfair"? Not according to my definition.

Why the concept of "inferior good" is not appropriate here.

Mr. Staley makes a couple of excellent points at the end of his post:

(1) Transit can compete if managers focus on providing high quality services that are responsive to specific as well as generic mobility needs. In other words (in my interpretation), it is important that we recognize that transit needs to be attractive and dignified-- perhaps all the more so because it provides transportation for hard-working people of modest income who don't deserve to be punished for not driving to work.

(2) Transit and transit advocates should not depend on gas prices or the degrading quality of automobility to push people into transit. We should work to make transit excellent. On the other hand, I would add, this should not be taken to imply that we can't shift public funding priorities from building roads and parking lots to encompass a full range of mobility options.

However, Mr. Staley's initial framing of the question is misguided. First, there is a conceptual problem. "Transit" and "mobility" are not distinct or comparable goods, since transit is one of the ways that we deliver mobility and accessibility, as part of a system of transportation options.

Second problem: He says that "inferior good" is not pejorative, but there are particular normative assumptions underlying his claim AND it is clear from the headline what message he wants to convey rhetorically.

What he is really saying, I think, is that transit is necessarily inferior to the automobile because "mobility" increases to the extent that we individually control when and where our transportation takes us. So any form of mechanical transportation that is not individually controlled (and owned?) is necessarily inferior? This is also implied in the assumption that we will seek to have more control over our means of mobility as our incomes increase. The argument is essentially tautological, defining mobility in terms of the costs and benefits of the automobile and measuring everything in those terms. Realistically, however, is mobility increased by being able to drive your car in traffic in order to park in a structure four blocks from your destination, or is it increased by being able to step on to a train that comes by every 10-15 minutes and get off at your destination?

Also, this definition of mobility conflates a whole series of quite distinct issues. Often it isn't about mobility but about status-- the difference between waiting to have the stretch Hummer brought to the front door and getting on the streetcar often has nothing to do with "mobility" as such.

The third problem is that the whole question is framed from the standpoint of imagined individual market choices taken out of context. This might be a sensible way to frame the question if we were dealing with abstract individuals in abstract market space. However, mobility is a concrete issue for real individuals in real places. This is often the problem when people borrow the methodology of economists, especially in simplified conceptual form.

Many people can't (or shouldn't) drive. Where I live, there is a very high percentage of elderly on fixed incomes (some affluent, some not). I've been heartened to see a lot of them driving a Prius, but many can't or prefer not to drive. My wife isn't that old, but she can't drive because of health problems. I suppose if they had enough income they could be like Miss Daisy, but many people would not choose to be driven that way even if they had the income. It isn't just money involved in the upkeep of a personal driver.

My kids used to take the bus to school-- a 30 minute drive but a hellish hour on the school bus. Kids without cars are liberated to some extent by the public transit system, and would be more so by improved service. I still remember the feeling of freedom when I first learned, at 13, how to get around by bus. Was it better at 16 when I got my first motorcycle? Or when my friend got a car? Of course, and for a variety of reasons. But when I was 13, my mobility option was Mom or transit. I don't think we need to get into the number of kids who die in car crashes, given the trend toward raising the driving age.

Then there is traffic, parking, the desire to have a few drinks with friends after work, the opportunity to read or relax on a long commute, the ability to grab a street car and ride 6 blocks to your destination rather than waiting for the valet to fetch your car so that you can park it again six blocks away. The potential list is long. Is it preferable to drive into San Francisco from down the peninsula, or take the train? An honest answer is likely to be "it depends." We need to think more carefully about all that is implied in this recognition of the importance of the context.

If you want to argue that transit is an inferior good, you might as well argue that the car is an inferior good compared with the mobility offered by owning a personal helicopter, or maybe one of those bleeping little saucers that George Jetson used to get to work at Spacely Sprockets. I especially like the model that collapses into a brief case.

Fantasies aside, there are times and places when even bad transit is preferable to an automobile-- enhancing mobility where the automobile is a burden, where the car requires that we sacrifice mobility for... the illusion of control? conspicuous consumption? the imagined possibility that we might take the day off and go for a drive on a winding road in the Tuscan hill country, with a beautiful model by our side?

Ultimately, it is a mistake to frame the whole discussion in terms of whether or not transit can "compete" with the car in some imagined transportation flea market. This is a misapplication of the concept of markets, depending on misleading analogies rather than an appropriate analysis of the ways in which the performance of transit can be explained in terms of market behavior and the ways in which it cannot (and the kinds of assumptions one has to make in order to analyze ridership in terms of aggregations of individual market choices).

The first question is whether public transit can contribute significantly to mobility in a community, and to the quality of life of significant segments of that community. The discussion need not be framed, at least initially, in terms of replacing the car.

As Mr. Staley points out, transit CAN compete with the car, and it is worth working to insure that it can do so-- that is, to insure that there really are multiple options with regard to mobility. We don't do so by starting with the assumption that a public transit system, as a key piece of transportation infrastructure, is an "inferior good." If we value our ability as a society to optimize mobility and choice, and to do so in an equitable way, we ought to start policy discussions with those principles, not by casting everything in terms of narrowly and abstractly defined individual choices.

What is the point?

It's not that yours and Mr. Staley's banter doesn't make for interesting reading or contemplation, so don't get me wrong. But, the only thing I have ascertained from the pages of discussion - his blog and your response is this: he is convinced transit doesn't fit the US land use pattern and probably never will and you think it should.

He is an economist and believes in individual choice and the collection of those is a foundation for what society wants. You clearly have some sort of urban planning and/or planning education background and see the world quite differently. That's fine, but there is no right or wrong per se. There are not data to demonstrate that his way of thinking is correct or your way of thinking is correct. It's not about evidence. And, it's not something that can be solved here or ever. It's the perpetual arguing over "who is right" that keeps bad policies and bad results firmly in command. Until "we" agree on policies that respect individual choices and freedoms AND protect our shared desires and resources, we will have done little to make a positive difference.

No right or wrong?

If you believe what you claim to believe, then I have to wonder why you would bother engaging in any discussion, much less in this context.

My point was precisely that we will not be able to accomplish what you propose ("agreeing on policies that respect individual choices and freedoms AND protect our shared desires and resources") if we frame the question in the terms that Mr. Staley has proposed.

There certainly is evidence-- on both sides-- and one of the most important parts of interpreting the data is getting clear about what is implied or at stake in the conceptual framework one chooses in framing the data. It's not just that I see the world differently in some personal sense, but I am saying that a full discussion of the issue needs to move beyond the narrow confines of the neoclassical economists' model of human behavior.

At a certain point, of course, no amount of data will resolve the differences with regard to underlying norms and values at stake. If that is what you mean, then you are right. But that is all the more reason to get clear about those values and engage them directly and honestly in the policy debates, rather than pretending that the scientific truth of "the market" can allow us to avoid the politics of it.

There may not be an absolute right or wrong-- that hardly seems something to discuss here. There certainly are decisions that are more or less justified by the evidence, given certain principles and values as a starting point. Perhaps such questions can't be resolved here, but they will have to be resolved for the practical purposes of forming effective policies and taking effective action in the world.

So let's accept for the sake of argument that there is no point in discussing these things. What would you propose we do with regard to transit?


I don't agree that economists' view of human behavior is as narrow as you believe. But, why engage in discussion? Well, if it can be somewhat concrete and move the debate forward about actual policies- great. But, I'll leave the esoteric chronicles for you and some of the others.

In my view of the "perfect" world, transportation is a private good and should be treated as such. It has many characteristics of a natural monopoly, thus I liken it to a utility. Private, regulated production with consumer user fees. Transit, although publicly owned and operated now, I see the same way. So, my belief is that all transportation modes should be user funded and that external costs should also be borne by and internalized by the users. With this framework, all other things equal, we would find the preferred mode split given the individuals in society desires for their best travel option balanced by what is best for the commons (assuming the external prices are appropriate).

Now, I know we don't live in that perfect world. We have a multitide of public policies, many of which distort the land use pattern to a less dense, more land use segregated, subsidized roads and infrastructure and overall more sprawling pattern. There are also those that subsidize downtown development, fund transit capital and operating costs, and restrict private property use. So, my intial desire would be to eliminate to the greatest extent possible, all of these types of policies.

I would like to see those replaced by policies that allow great freedom, but at a cost of action, if that action has social or environmental consequences. There could be numerous pricing measures enacted to influence behavior to reduce pollution, traffic congestion, and fiscal competition among local governments.

I think the goal of land use policy is to essentially give people what they want in terms of places to live, work, and play, TO THE EXTENT we can also give them what they "want" for public goods like a clean environment, travel options, reduced congestion, etc.

What does that mean for transit right now - not much. I think it is bad policy to be building extensive rail or transit networks when we have not solved the basic formula for subsidizing/encouraging sprawl.

What proposals?

Instead of concrete proposals, you offer your worldview, based on nothing other other your opinion and your feelings.

You don't think the economists' view is narrow? Based on what? What do you know about other theoretical perspectives, other evidence regarding the way human behavior works in social contexts (that include markets but that are not limited to markets)? There are things we know about the study of social and political organization that are not reducible to the simplistic market model. There are even quite a few economists who understand the need to complicate the simple neo-classical view of markets (and also to understand the limits of their own models).

Actually, although there are esoteric debates, there is nothing particularly esoteric about this discussion. The issues are the stuff of everyday policy debates-- among those who actually make policy and not just think-tank theorists and contrarians.

It's fine to have opinions and feelings, but they do nothing for the world if they aren't discussed, shared, measured against available evidence, and agreed upon. You say there is no point in discussion-- so why are you responding to this discussion?

If everybody shared your view on transportation, it would be one thing, but everybody does not. So the question is: on what basis do we construct an agreement sufficient to enable us to go on with concrete proposals?

So, the bottom line is that you don't think we should do anything about transit. An odd position to take, given what you say you believe. You obviously think we should stop doing some things we are already doing.

Let's say that you are right that it is bad policy to subsidize transit at this point, and yet there are a lot of people who disagree and there is a lot of successful effort to get transit systems built and improved. Much of this effort is by people who do not share your notion that the costs of such systems should be carried only by the users. Why should any of them consider your opinions, based as they seem to be on your personal feelings about the world and as averse as you claim to be to the very idea of discussion?

More academic twisting

I always know when I'm debating with an academic as they instantly act like they know everything better than I do. How is life in the ivory tower where you can spend the time to debate whether or not sociolgy, political science, or economics explains the world better? So you are aware, I've been in the trenches at the municipal, state, and regional level actually talking to policymakers and testifying before committees. I can assure you that your academic gobblygoook you just spewed is worthless and policymakers at that level spend zero time on it. I have no idea how you think policymaking works, but I can actually tell you how some of it works from experience. It is quite ugly with mostly pandering to critical constituencies like NIMBYs or other folks.

I provided my world view so you could understand the context of why I advocate such policies as congestion pricing, a carbon/pollution tax, vehicle registration fees based on weight and mileage, full cost pricing of insfrastructure, PDRs, TDRs, land trusts, developer surcharges for impervious cover, etc. But, it's clear you don't care. What is clear is that you are as anti-market as Staley is pro-market. You would rather bog the discussion down in rhetoric about how we could be as smart as you someday if we only could conduct a literature review of the relative merits of how to see the world - as an economist, a political scientist, or a sociologist. Well, I can tell you you are in the right place for that in academia and that is fine. I'm sure someone on here will spend endless hours debating it with you. I've heard all the disciplines champion their world view when I was in graduate school and have come to the conclusion that it is largely normative. Yours is anti-economics because you are not one and Staley is economics because he is an economist.

I'll continue to champion my common-sense (effective, I think) proposals that produce some actual benefit in the world, regarless of the lense in which they view it. You can continue to drum up increasingly venemous comments with someone else. Have a nice day.


Well, I'm sorry that I upset you. You kept saying that we should quit talking and just do something. (Remember that I only responded to your criticism of my post, so I'm not sure why you feel so attacked.) When I asked what you proposed, you told me your own world view. That's fine, but you essentially did exactly what you said I shouldn't do.

It's true that I don't know who you are and what your experience is, but that works two ways. Clearly you don't know anything about me either. Discussion would be a whole lot more productive if we could operate under the assumption that different people might bring different things to discussion. I have a mix of academic and practical background. I engage in these discussions because I hope to learn from people who have different backgrounds, both academic and practical.

I am not anti-market, nor am I anti-economics. On the contrary. I just don't want to make a fetish of an ideological view of markets, and I think an understanding of social structures and political dynamics helps in that regard. It is not an "academic" question, however, but a pragmatic one. The work I am doing is related to the quality and effectiveness of public involvement in planning, so understanding the whole picture is important to me. Economics doesn't provide that whole picture, and I'm pretty sure most economists would agree with me. It's not a slam on economics.

I am certainly not championing any particular discipline, largely because I think we need all the help we can get. In the process of trying to accomplish practical things, I'm willing to rely on any knowledge that helps understand how things work. I have found it useful to have some familiarity with the research-based knowledge in political science, sociology, economics, anthropology, history. I'm sorry (really) if that interdisciplinary bent bothers you.

Your angry post was the first I've seen mention of any specific techniques in this discussion. I'm in favor of all of those techniques, and I'd be glad to read about common sense proposals.

The Real Fallacy In Staley's Argument

I have to disagree with those who say that Staley is wrong to talk about inferior goods.

Imagine American cities in the 1920s or 1930s. There was excellent trolley service, and there was not any great investment in auto infrastructure (beyond the ordinary city streets).

Why did people at the time rush to buy cars as soon as they could afford them?

Clearly, because driving could get you to any given point faster than trolleys (since you had to walk to the trolley stop, wait at stops while people boarded, etc). Also because cars were considered more luxurious, gave you more status, and probably other reasons. It is clear that people at the time considered transit an inferior good.

But in hindsight, it is clear that cars also caused many problems: congestion, parking problems, air pollution, deaths and injuries, gasoline shortages, global warming. Overall, they have made our cities less livable, and now they are making the planet less livable.

To understand why people cling to their cars, despite all the problems they cause, we have to accept the fact that cars are more convenient for the driver (who is the one who chooses whether to drive or use other transportation) but create problems for everyone else.

The history of the modern American city shows that, when everyone pursues his self-interest, the result is not an anyone's interest.

That fact decisively refutes Staley's laissez-faire ideology.

Charles Siegel

I agree in principle, but your history is not quite accurate.

It is not accurate to say that people rushed to buy cars because trolleys were slow, crowded, or inflexible. Cars were not a replacement for trolleys since they were used mostly for things that trolleys did not ever do: enable you to wander out into the countryside. Then one has to ask why one would want to do such a thing. At any rate, it would be more accurate to compare them with horse-drawn vehicles than any of the existing traction systems.

You are projecting a contemporary view back on history. Trolley systems had a lot of problems, not the least of which was that they were often badly managed and under-capitalized. There were also issues of class and ethnicity, given the changing demographics of American cities. But it is only in a world where we take the car for granted, and where transit is proposed as a replacement for the car, that the trolley and the car appear comparable as commodities.

If we define "mobility" in terms that are specific to the automobile-- speed and flexibility, abstractly considered-- then transit will never measure up. The technical notion of an inferior good is that it is less in demand as incomes increase, precisely because it can't measure up. What if this is not always true of transit? What if, in fact, it's not the mobility attributes of transit in general that render it inferior but the attributes of particular transit systems?

There are transit systems that are inferior, but it strikes me as wrong (and misleading) to describe transit, in general, as an inferior good.

We have to recognize that transit and cars are not comparable, that each is particularly good at some things where the other is not. We also need to think about and analyze the patterns of mobility in less abstract terms. It's not just about LOS or ridreship numbers.

Price and convenience fundamentals, are conveniently ignored

That’s one reason why vehicle miles traveled and air travel have grown so drastically along with our nation’s wealth, while public transport’s share of total travel has fallen.

Commercial air travel is also a “fixed route” form of subsidized mass transit – yet demand has grown tremendously. Why? Almost totally due to relative price and convenience – fundamental elements that seem to be omitted from Mr. Staley’s post. Car and air travel have been relatively cheap due to government subsidies and low-cost fuel. Those subsidies, along with government regulations and special-interest driven disinvestment in rail transportation have made car and air travel also more convenient. As subsidies, regulations and fuel prices change, rail transit becomes relatively cheaper and more convenient – which is exactly why demand is growing in the United States and has continued to be strong in places like Japan and Europe.

fixed route transportation modes designed to carry large numbers of people in buses or trains—is what economists call an “inferior good.”

Note that Mr. Staley highlights “fixed” transit in his criticism. The “fixed” (e.g. LRT) vs. “flexible” (e.g. regular bus service) is a recurring argument for libertarian car-transport activists – arguing that bus routes and frequency can be changed more easily to service changing demands. I’m not sure if this is part of his argument, but it is flawed nevertheless, as bus “flexibility” is mostly a function of a larger road network relative to the rail network. If the rail network were developed even semi-proportionally to the road network, this argument would be moot. Further, buses are not inherently “flexible”, as they are limited to where the roads are (which are fixed) and the capacity of those roads. Rolling stock on rails can be added just as easily as buses on roads. And both have limits.

they will have to provide very high levels of quality and service.

Rail transit provides higher quality service than bus transit and air travel for regional service, yet libertarians are staunchly opposed to rail.

Only about one third of transit’s revenues come from customer fares.

Which is 1/3 higher than the vast majority of roads and freeways.

Transit agencies have stronger incentives to please grant makers or elected officials than the people that use their service, or, more importantly, could potentially use their service.

This is a bit cynical, but why wouldn’t this argument apply to road construction as well?

Nor should transit advocates use public policy to purposely degrade the quality of transportation alternatives such as the car to tip the scales unfairly in transit’s favor

This is hilarious. Even with the permanent trend of rising gasoline prices, it’s going to be a long time before modes in America become balanced enough to call cars an “alternative” form of transportation. Libertarians need not worry, the ability to drive will always be available, as long as one is willing to pay the price.

Use brains to convert inferior to natural good

Dear Samuel,

Yes, fixed route 20th Century transit is an inferior good.

However, we can use 21st Century technology to produce transit from our normal good private vehicles. We need only a relatively inexpensive upgrade of cellphone features. Cellphones have GPS, navigation, and friend finder features already. We need a feature (or service) that allows us to select ride buddies and connect on-the-fly with whichever of our 10,000 ride buddies happens to driving by and headed our way.

A few months ago, it didn't seem many drivers or riders would go for it. But, with gas approaching $5/gal, a lot of drivers would like to share the cost (automatic transfer of funds from rider to driver, with a cut for the service company).

Private companies (Zimride or GoLoco, but on cellphones in real-time) would be better than public. You could have St. Vincent de Paul ridesharing for the social justice inclined. Or people who only want to ride in SUVs. People who hate to talk. Matchmaking via carpooling. Do Ride, instead of Do Lunch, business networking. And the ever popular, ANYBODY, 'cause I absolutely positively have to get there fast (or cheap).

See details on the "Fossil Free" page of GuardianAngelCars.org.


Michael Lewyn's picture

interesting idea, but...

I wonder if there's enough social trust for people to be willing to ride with just one or two strangers.

This would require a new social infrastructure.

A very interesting idea, in the abstract, and it might be fun to explore the possibilities. Michael's point is right on the money, however. I've observed efforts to organize similar kinds of bottom-up, DIY solutions that involve match-making needs and resources in a network that emerges in the process, and I've watched them run into two problems: the problem of trust, and the problem of legal liability. Since we are getting more and not less nervous about strangers, it is hard to believe that a technologically mediated "network" would relax these fears. In fact, I think that there is growing fear and concern regarding the number of "buddies" that electronic communication technologies have enabled access to our lives, in one form or another. The information environment required to make such a thing work would be something that many people would find objectionable, I think.

There are possibly a variety of ways to address such problems, but I suspect that the social obstacles would not be easily enough overcome for this to work as an on-demand transportation system at a mass scale. It also seems that it would require a certain scale of operations (a certain critical mass of participants in any given place).

However, it makes a certain amount of sense to consider a variety of forms of paratransit, in conjunction with a primary transit network. Certainly it is technology worth exploring, since it is clearly becoming more common to organize car-pools than it has been for a few years. Companies often help to facilitate the match-making among their employees. It would be an interesting experiment, if somebody wanted to try to market it. I find it implausible that it could ever effectively replace public transit, in either functionality or desireability.

No, it only requires more communication

Dear Michael and David,

Who said anything about strangers? Everyone starts only with people they know. Everyone recruits their own friends and aquaintances to be be their ride buddies. If they happen to allow "referral" on-the-fly, their list of ride buddies grows faster.


Is there a system like this operating?

I assumed from the description that it would involve an anonymous network. My bad.

A very interesting idea. It would be fascinating to see a system like this in operation. There would still likely be some complicated social dynamics, even if the networks are limited to "friends." It would require a supportive culture as well as the technology to make it work-- norms of trust and reciprocity, etc. It seems it might be much easier to make it work in a place like Santa Barbara than in cities that are more diverse (both with regard to social composition and with regard to potential destinations).

By the way, the concern regarding strangers doesn't apply to riding transit (as much, or in the same way). It is one thing to get on a public bus with diverse others, but a very different matter to get in a car with one stranger or allow a stranger in your car. (There was a time when it was relatively common to hitchhike, and then it became pretty much impossible.)

It is also sometimes easier and more acceptable to put up with the relative inconvenience of the bus than rely on friends with cars. Whereas we can be comfortable taking advantage of a public resource, we are often uncomfortable being dependent on known individuals.

I could imagine this being a successful and important technological contribution, but have a hard time imagining that it could work at a scale required to make transit unnecessary. Has there been an actual implementation anywhere?

Automatic fund transfer


The automatic funds transfer removes the stigma of dependency. I believe the system could be set up to use market forces to price the ridesharing to keep the number of drivers equal to the number of riders.

Did I mention GoLoco and Zimride? They are the closest ridesharing services to what I seek. I don't know if current cellphones have sufficient (ganged) computing power by themselves. They might have to be "web enabled" (a $30/mo feature on new Verizon phones) to use central servers for the real-time match calculating/searching.

What's needed is for some large transportation agency, or a small state, to start working with cellphone manufacturers or service providers. Or a group of computer programmers to hack the phones and set up the service. Maybe open source, like was done for the operating system, Linux.


Check on CEC Fossil Free by 2033 Plan

Michael - Needn't be any strangers. There was quite a bit of debate on 'Pooling vs. more buses when assembling the Santa Barbara Community Enviromental Council's Fossil Free by 2033 Transportation Plan.

'Pooling won out because it has by far the greatest potential vehicle-mile reduction for the cost, if people don't like strangers they aren't that happy with a crowd of strangers, no way buses can ever be as convenient.


transit and road subsidies

Sam is right about transit grants and subsidies: in my impoverished region, transit fares must be at least 20 percent of the cost of service in urban areas and 10 percent of the cost of service in rural areas.

Normally, I might deplore such a subsidy, although the bulk of it is for the poor, who need all the help the can get in the U.S. However, in this case I don't, because the poor are subsidizing the wealthy--again.

When was the last time you paid a toll backing out of your driveway? Yeah, roads are 100 percent subsidized, including by the taxpaying, transit-riding poor. The more you drive, the greater your subsidy. The pathetic gas tax we pay doesn't even begin to cover the cost of road maintenance, never mind new roads. And don't get me started on trucks, they do the most damage to roads and get the biggest subsidy.

By the way, I used to work for an RTPA.

Call for Exclusive Motorcycle Lanes (EML)

Your comment "transportation modes that provide more mobility will see demand increase" gets at the heart of a topic I have been championing for a few years now - Exclusive Motorcycle Lanes (EML). As transit ridership increases so does scooter, bike, and small motorcycle commuting. However, the potential for these 2-wheeled modes will never be fully realized until there are safe which, for the most part, means seperating them from general traffic.

Exclusive Motorcycle Lanes combine the benefits of transit with all the mobility options of a car when you leave the exclusive lane - think of a BRT system for two-wheeled commuters. Some parts of the world do actually combine bus systems with scooters/motorcycles in a controlled, exclusive lane. Transport for London (TFL) has found this to be very successful. A recent TFL report on the use of bus lanes by motorcycles showed that accidents were nearly halved over a three-year period on two trial routes where motorcycles were allowed into bus lanes. In fact it found that when motorcycles were allowed access to bus lanes, it proved safer for all users, pedestrians, cyclists, car drivers and motorcyclists, with a 42 per cent fall in the overall rate of collisions.

A system of EMLs could bridge the transportation infrastructure gap between greenways, bicycle boulavards, roads, and transit. The benefits would be tremendous.


Duane Verner

Exclusive Motorcycle Lanes (EML)

Virtual force field better'n separate lanes


Want to combine messages? You can have virtual, on-demand, real-time, exclusive motorcycle lanes. Check out GuardianAngelCars.org for more details.

Combining the same Wii (accelerometers), GPS, and cellphone technology can provide motorcycles, bicycles, pedestrians, cars, and trucks with a virtual force field of protection. Vehicles with three or more wheels would have drive-by-wire (existing stability control) systems that avoid cutting in front of or running into the two wheeled or shoe leather vehicles. (To be fair, the two wheeled vehicles might have "safety coaches." A safety coach is a cellphone that gives bicyclists instructions in whatever language they understand.)

Realize that market forces are producing zero-accident and zero-congestion cars in any case (stability control, navigation systems, self-parking, and General Motors’ car-2-car). These applications do not require fully autonomous vehicles. They are more like riding a horse or driving with current stability control systems. The rider or driver reads the map and provides the directions. The horse or computer avoids collisions or turns the wheels to avoid rollover.


New Automotive Technology

"Realize that market forces are producing zero-accident and zero-congestion cars in any case...."

Which reminds me of the old saying: "Technology will save us, if it doesn't wipe us out first."

Charles Siegel

Market forces don't create anything.

We should certainly explore the possibilities in any technology that anybody can think up, but I agree that it would be foolish to imagine we can be saved from ourselves by technology-- especially since most of today's problems are yesterday's solutions.

Also, if you look at the history of technology, it turns out to be rarely (if ever) the case that "the market" chooses between technologies. In the process by which new technology is formed and made operational as part of a technological system, the market has never played anything but a very small and rarely determining role.

Know thy enemy


It is wise to suspect new technology. But as a Civil Engineer, I must point out that your concerns are a double-edged sword. The civil engineering profession derives from both military and public health professions. You might consider doctors saving a few thousand lives as a retail "today's problem." If so, then civil engineers sawing billions of lives are a wholesale "problem"(preventing disease by treating water and wastewater, infrastructure to move food, energy, and shelter, ...).

On this issue, I'm not being the good engineer by making prototypes. Instead, I'm just pointing out what is happening in hopes we'll (my fellow civil engineers and cousin planners) wake up and guide this technology. We are not planning for what's obviously going to happen.

The impromtu carpooling, the virtual force fields for motorcycles, bicycles, and pedestrians aren't going to happen without action. The reduced automobile collisions and the increased freeway capacity are happening without planner and engineer action.


We should understand that technology is more than machines.

Actually, I agree with you. I'm not saying we should stay away from technology because it has messed us up in the past. On the contrary. Just because you can cut yourself on a double-edged sword, that doesn't mean you shouldn't consider the usefulness of one. You just have to think carefully about who is standing behind you when you swing it. And I was always taught that the most dangerous tool is one that isn't sharp enough.

Both civil engineering and medicine are both full of great examples of unintended consequences of solutions. Our well-engineered roads and storm water systems are full of great examples of outstanding engineering that produces environmentally unfortunate solutions. (I say this partly because Ive been working a bit on water issues with one of my partners, a civil engineer who specializes in water stuff.)

Many times the problems have to do with the way technical experts tend to solve problems by reducing them to terms they command rather than addressing them as they appear in the context of complex systems. Hence, for example, the traffic engineers' effort to retool their profession with "context sensitive" solutions.

By the way, there's a great book on the Challenger launch decision by Diane Vaughn, my favorite example of the way the aggregated decisions of technical specialists can add up to disaster.

So it may be a good thing that planners and engineers aren't in charge sometimes.

I think you are on to something: we should look carefully at these emergent technologies that take advantage of our self-organizing capabilities, and try to figure out if the foundations of more comprehensive solutions might not be there and ready for some tweaking by engineers and planners.

Using Technology Wisely

I think we can all agree that technology gives people much more power over nature than we ever had before, which can be immensely beneficial (eg, wholesale prevention of disease) or immensely destructive (eg, global warming).

That is why it is important to use technology wisely, to use the technologies that are beneficial and limit those that are destructive.

Twentieth-century urban planning made big mistakes in deploying technology - most obviously, chopping up cities and the surrounding countryside with freeways, so they could be rebuilt as auto-oriented sprawl where you absolutely have to drive every time you leave your home.

I think the big issue in planning today is to undo this error by building public transit and walkable neighborhoods around the stations. This involves some new technologies (eg, there are also virtual force fields for BRT buses that allow them to pull right up to the platform). But mostly it involves moving to low tech methods of transportation - such as walking - and it involves undoing the problems caused by the over-adoption of automobile technology during the twentieth century.

That is why I am not very attracted by urban technologies such as virtual force fields for motorcycles and cell-phone car pooling, which try to make it more convenient to live in today's auto-oriented cities.

Charles Siegel

What is mass transit?


I'm a bicycle commuter (over 100,000 miles of commuting - not recreation) and civil engineer in water, rewater, and wastewater. I don't really care if cars and motorcycles have force fields, other then worrying about my wife and daughters when they are driving. I just want bicyclists and pedestrians to have force fields. The difficulty is that cars are already deploying the components of virtual force fields. And that technology tends to make motorcyclists, bicyclist, and pedestrians more vulnerable (less of us to be sensed, motor drivers paying less attention).

Maybe you have the gift of walking endurance, like I have the gift of unusual endurance bicycle power and the courage to keep riding after putting a 1/4-inch deep dent in a car's rain gutter with my helmet. (Car made two bad moves, got me on the second one.) But I know that few people have those gifts.

What is mass transit? It is moving a lot of people in close proximity from place to place. It should be efficient, using less of the world's resources per person-mile. It should be effective, moving people along the shortest route at times and to places of their choosing. 21st Century ridesharing zero-accident cars which eliminate congestion by traveling in close packed platoon are 21st Century buses (or trains). This will be more efficient and effective than new 20th Century buses or trains. It is certainly more affordable, and it is happening.

Using the sword analogy - You can now see the errors made with the double-edged bronze sword of 20th Century vehicles. How will you react to emergence of double-edged steel swords if you don't even acknowledge that your soldiers and armorers have started the switch to steel (21st Century electronically connected vehicles and people)?


Re: What Is Mass Transit

ME: I also bicycle more than I walk. I was a bicycle commuter for seven years, but I only got up to 20,000 miles, nowhere near you. I am not talking about people with exceptional walking endurance, but about building neighborhoods where it is convenient to walk (as it was in American cities and streetcar suburbs until a century ago).

Here are two thoughts about why I prefer public transportation to electronically linked cars:

1) Public transportation generates walkable neighborhoods. The general rule of thumb is that, for each mile of travel shifted from auto to public transporation, an additional two miles of travel are shifted from auto to walking, because of the pedestrian-oriented development around the transit stop. You can build a walkable neighborhood around a transit stop, but you cannot build a walkable neighborhood around a freeway interchange, even if the cars are all electronically controlled and linked.

2) Public transporation does not require parking. Imagine how much added parking would be needed if all the commuters to Manhattan switched from public transporation to cell-phone car pools. Because of the space needed for parking, it would be much harder to build real downtowns using a transportation system of electronically linked cars.

I think you have lots of good ideas about improving transportation, but they have to be complemented by ideas about building more livable, walkable neighborhoods, so we need less transportation.

PS: I would be very happy to see zero-accident cars that protect pedestrians and bicyclists.

Charles Siegel

Fair enough


Sounds like the electronics concepts could benefit from a merge with the walkable neighborhood planning concepts. I could e-mail a white paper and a few other documents you could rewrite to incorporate your concepts. Catch me at ...aol.com and expect a few MSWord files.


Re: Why Transit is an 'Inferior Good'

If public transit were indeed an inferior good, you would see a lot fewer well-heeled commuters riding subways to downtown jobs. As the author correctly points out, mobility is a normal good. What he ignores -in his interesting and discussion-provoking post at any rate- is that the limitations of parking supply and road space make public transport the best provider of mobility in many dense cities. Furthermore, mobility is generally a means to and end. It is perhaps most appropriate to consider accessibility to goods and services rather than mobility in and of itself. The denser an area, the closer and more numerous the variety of activities, the less advantage the automobile has in providing superior accessibility. New York and London have a lot of wealthy citizens; many do not drive.

On a separate note, economists often justify transit subsidies since roads are under-priced and auto travel creates negative externalities, such as congestion and pollution. The idea of public policy unfairly tipping the balance in favor of public transportation is far fetched. That said, the emphasis on providing better service, is spot on.

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