Posts about Intercity Buses

The Chinatown buses were able to flourish for two reasons: A loophole in parking rules allowed buses to idle on certain streets in Chinatown, and Ronald Reagan's Bus Regulatory Reform Act of 1982, which made it easier for interstate buses to pick up passengers and set rates as they pleased. By eliminating the costs of infrastructure, amenities and marketing, the Chinatown buses only have to pay for a fleet of buses, a limited staff and gas; this translates into $10 fares from New York to Boston.

Major operators like Greyhound caught on, leading them to develop the BoltBus, which follows the Chinatown bus model and is nearly as cheap, seemingly a lot safer and has reliable wi-fi. This is how the market is supposed to work in favor of people: Increasing the options for consumers and thereby lowering prices.

But that's not how it usually works in transportation. As someone who believes that strong regulation is incredibly important for industries such as Wall Street, which is literally tied to the economy of the rest of the world, or the energy industry, whose impacts on the environment can be irreversible, I also believe that transportation regulation at all levels of government is holding our cities and our economy back.

In many cities around the country, people are marooned by public transit that is often unreliable, infrequent, unsafe or just nonexistent. Private providers find it nearly impossible to supply alternatives. A start-up website called Uber that allows people to hail a licensed black taxi, recently was set up in a sting operation in Washington, DC by the local taxi commissioner for failing to comply with District regulations. Regulation has zeroed out private alternatives to public transit in cities, forcing people to take transit into their own hands—or, more accurately, into their own cars.

But what if there were other options? In New York, which has transit options that any other American city would envy, there's such great density that it supports many more niche transit options. "Dollar vans," which largely fly under the regulatory radar, are a popular service for many people in Brooklyn.

These kinds of systems called colectivos flourish in Latin and South America, as well as other regions of the world, where private cars and public transportation fail to meet users' needs.

A lack of competition in transportation options has caused all transit modes to be more expensive than they need to be. Why should an Amtrak from Philadelphia to New York routinely cost $45? A private Japanese company has just opened an office in Texas with plans to amass $10 billion to support a high-speed line between Houston and Dallas-Ft. Worth—one imagines that will beat Amtrak not just in terms of price, but speed of completing the project.

If we opened our streets and rails more transportation operators, undoubtedly it would benefit our intertwined problems of high prices, congestion and slow service. But just last Friday, the New York State supreme court thwarted Mayor Michael Bloomberg's attempt to sell more than $1 billion worth of taxi medallions that would have increased taxi service in underserved boroughs and allowed for street hailing.

To be sure, the idea of deregulated transportation sounds bad. Deregulated transportation in many developing countries is notoriously unsafe and can have grave consequences. But there needs to be a middle ground between rolling death traps and a transportation system that is killing our economy. New York Sen. Chuck Schumer's proposal of creating a clearly posted letter-grade system to identify the quality of Chinatown bus services is a great one; this model could be applied to other kinds of new transit providers that serve niche markets. Auctioning off transportation licenses or city-owned property to support infrastructure for alternative transportation modes could be a new source of revenue in other cash-strapped cities.

The Chinatown bus companies emerged from strong immigrant communities with an entrepreneurial work ethic; while the practices that prompted government intervention seem shady, let's not forget this country needs this kind of ingenuity to survive and our government should be working its hardest to support those who have found ways to bring new, inexpensive transportation options to our roads and rails.

Cross-posted at Next American City.

Besides, if Amtrak is selling almost every seat at its current fare points, there's little economic incentive to lower the fare. Lowering the fare wouldn't sell any more seats since they're selling out already. And it would bring in less revenue.

Capacity: Amtrak simply does not have enough coaches in its fleet to handle the amount of passengers who would want to ride the train if Amtrak fares were comparable to those of curbside buses. Furthermore, there is very little room on the existing railroad to add new trains, particularly at peak hours when tracks leading into New York Penn Station (from New Jersey) are already at capacity with both Amtrak and commuter train traffic.

Giving Amtrak the ability to handle the passenger volume that it could if it were price-competitive with buses would require sustained higher levels of capital investment from the federal government, or from private sector partners, which are absent a strong federal commitment. Unlike highways and aviation, Amtrak lacks a dedicated source of reliable annual funding.

Amenities: Aside from being generally faster (even Northeast Regionals hit top speeds of 125 mph between Washington and New York, while buses never top 80 mph), train travel is generally considered more pleasant than bus travel. Trains offer a smoother ride, more legroom, the ability to get up and walk around while in motion, and on-board food and beverage service. These amenities provide many passengers a justification for paying more than they would to take a bus.

Unlike buses, which operate over highways built and maintained by federal gas tax dollars (along with some general federal and state tax revenue), Amtrak owns its own tracks in the Northeast Corridor and has to bear the full cost of maintaining them, with limited federal assistance. If the bus companies had to pay their full share of highway maintenance, they could not get away with charging the fares they do.

Railroading, by nature, is characterized by high fixed costs. Fixed costs are those that do not vary based on how many people use a good or service (in this case, buy an Amtrak ticket). It will cost Amtrak roughly the same to maintain the tracks, signals and stations on the Northeast Corridor regardless of how many trains run and how many riders use them. Railroad labor costs are also largely fixed. Remarkably, Amtrak nevertheless covers over 80% of its total costs through revenue from passengers, whereas most of the world's passenger train operators fall in the 50% to 60% range.

Despite this, Amtrak trains in the Northeast Corridor actually make an "above-the-rail" profit. Fares bring in enough revenue to pay for operating costs on the Northeast Corridor, though not enough to pay for the maintenance backlog of the corridor.

The need to promote energy efficient travel, lessen highway congestion, and spur the development of walkable, livable communities around train stations are good reasons to encourage greater numbers to use the train instead of flying, driving or taking a bus. Increased federal investment in Amtrak infrastructure and equipment—in the Northeast Corridor and elsewhere—would allow the railroad to increase the frequency, speed and capacity of its trains. This would allow more riders to be carried over the line, thus spreading the fixed costs over more paying passengers, leading to lower fares.

Some form of ongoing public capital investment will be needed to keep the infrastructure and equipment in good shape. Federal funding should come from a dedicated "trust fund" with its own revenue source rather than from a Congressional appropriation, which would make the amount of funding reliable year after year.

If you support higher and more reliable funding for passenger trains as a viable leading choice for intercity travel, join us in the National Association of Railroad Passengers in calling on Congress to fully fund Amtrak and the High-Speed and Intercity Passenger Rail grant program.

It so happens that this weekend I'll be driving up to New York with family, but coming home alone and without a car. For that one-way, one-person trip, the cost difference between Amtrak ($100) and bus ($20) isn't as severe. It isn't negligible though. $80 still seems like too much, at least on my budget.

However, I'll be traveling fairly late at night, and Amtrak's night discount is bigger than Bolt's. The train I want is only $74, while the bus I want comes out to $23. That's a difference of only $51. That cafe car is looking a lot more attractive now.

After thinking about it a few minutes, I booked on Amtrak. Being able to walk around, use a nice restroom, and get food when I want was worth the extra $51 to me, but just barely. If the difference had been much more I don't think I could have justified it to myself. $30 difference: Done in a heartbeat. $60 difference: I'm not so sure.

What would you do? How much extra will you pay for the luxury of a train?

Cross-posted at BeyondDC.