Mega Bus Vs.High Speed Rail - The Choice Is So Obvious To All But Our Politicians

This is a transportation story that the political class in general, and President Obama in particular, probably does not want you to hear. They would prefer that you not know that there is a viable, market driven, taxpayer subsidy-free approach to moving people around the country efficiently.

They would prefer to be the managers and glory hounds of grandiose high speed rail spending sprees that take years to build out, likely go over budget, and likely under perform relative to the objectives they used to sell in their plans to begin with. BePfore proposing an excellent alternative to their high speed rail pipe dream, let's review some political class transportation facts and history that we have already covered in this blog:

- California has been trying to build a high speed rail line from the northern part of the state to the southern part of the state for over ten years. They have spent hundreds of millions of dollars already, mostly for engineering and environmental studies, and have yet to lay down a single piece of rail, millions of dollars and many years after they started.

- Obama had wanted to spend billions of Federal taxpayer dollars to build a high speed rail line from my home area of Tampa Bay to Orlando and Disney World in central Florida. Fortunately, Florida state politicians turned down the offer and the taxpayer money that came with it for any number of valid reasons:

• While called a high speed rail line, it was not really going to be that fast for two reasons. First, is not that long of a journey from my house, and the greater Tampa Bay area, to Disney World in particular and Orlando in general. My home is only about an 87 miles drive to Disney World, a place we visit often. By the time a high speed train reached its top speed, it would have to start slowing down to stop at Disney World. Second, although the distance is not that great, the high speed line was going to stop half way there in Lakeland, Florida, making the journey that much slower even though it was a "high speed" rail line.
• There is very little local mass transportation in either Orlando or Tampa Bay. By the time a traveler got to the high speed rail train terminals in either location, they would have wasted a great deal of time and car gas they could have used to go directly to the other location.
• Not only would time be wasted getting to and from the rail terminals, there would be additional costs of getting transported to the terminals, given  the lack of mass transportation, and additional costs might be involved if a person had to park their car before getting on the high speed line. Thus, a sane person would never use this line since it would be more inconvenient, take a longer time to travel, and cost more to travel.
• The money would have been better spent in both cities on building up its local mass transportation capability since many, many more people would use that option every single day. That would have served more people more often in a less expensive way including reducing environmental costs incurred by local commuting by cars. However, rather than using the Federal money in this effective way, the political class insisted it could only be used for the high speed rail line.
• The most logical reason for not incurring the costs is that there is just not enough traveler demand for it to get between the two cities. The distance is too short, there are not a lot of business relationships between the two metro areas that would require substantial business people travel between the two towns, and the cost would be higher than just driving the relatively short distance.

- Tampa's county government actually came close to almost voting for and funding a local mass transportation initiative last year. This commuter train plan was originally supposed to cost a certain amount of taxpayer money but by the time it came up for a vote, the estimated cost had already increased significantly, before any construction work had been done.

Thus, Tampa Bay area voters turned down the plan, likely because they did not trust the local political class had a good handle on the likely cost to local taxpayers. This failure to plan and meet a budget in Tampa and California are ominous signs for any high speed rail projects from a taxpayer perspective.

- The Obama high speed rail line projects that are scheduled for some of the Midwest cities also make little sense. They will trim only minutes off of the travel time, making travel only slightly more convenient for those that travel between major metro areas but at a very high cost.

- The Week magazine reported several months ago that the less personal income you have, the higher your personal transportation costs are, on a percentage basis. Given this fact, wouldn't it be more efficient and benefit more people if that high speed rail money was used to improve local mass transportation options that the less economically robust are more likely to use vs. the business people that travel between metro areas?

- For decades, the country and its politicians have invested trillions of dollars in our nation's road systems and airport/airline transportation systems. Does it make sense to start abandoning this embedded transportation investment and infrastructure after all of this previous investment of taxpayer money?

- And finally, the Federal government and the political class has operated the Amtrak system for decades and it still loses money, requiring billions in taxpayer subsidies every year. Given that this is a very heavily used rail corridor in the northeast and it still loses money, what makes anyone think that the Federal government can profitably build and operate more high speed rail lines and tracks when it cannot operate the one it has had control over for what seems forever?

All very good reasons for killing Obama's fantasy of building a high speed rail line for the country: inefficient political class and government planning and processes, high speed rail is not needed and is unlikely to be utilized as promised, money could be better spent and serve more Americans if used for local mass transit, high cost overrun likelihood, high expense for potential benefits that are very far down the road, inability to operate the current Federal rail assets at a profit, existing infrastructure of other transportation options, etc.

Which brings us to buses, or more specially, the "Megabus" option. This option was discussed in detail in the April 11, 2011 issue of Business Week magazine. Megabus, along with Boltbus, are bus companies that are revolutionizing long haul transportation in this country. Characteristics of this option include the following:

- Megabus and its competitors are curbside bus pick up companies, they do not pick up their customers at typically old, dangerous bus terminals in seedy parts of large cities. They make arrangements with the local government to arrange pick ups at designated street locations throughout a city. This fact alone, avoiding dingy bus terminals, is a major asset for these operations.

- The article cited two customers who recently were waiting curbside to go on a 200 mile trip from Chicago to Iowa City. One of the riders, a college student bragged he only paid $26 for the 200 mile trip while another beat his ticket price, claiming he only paid $5 for his ticket on the double decker bus ride to Iowa. Every bus trip has at least one $1 seat per bus.

- 90% of the bus riders book and pay for their ticket reservations online, many using the image of the ticket that was emailed to their smartphone, tablet, or laptop computer to get assess to their seats on the bus. By cutting out expensive backroom operations and relying mostly on Internet options for ticket sales, the inter-city buses can cut costs dramatically, resulting in ultra low ticket prices.

- Given the automation of the ticketing process, the bus companies are able to handle almost unlimited demand by just adding buses to areas where tickets are in high demand, there are no limitations relative to train lines who can not easily add train cars when much of their ridership are walk up to ticket windows. The bus companies, via their electronic Internet ticketing process, know ahead of time how many people are likely to show up for a bus route.

- All of the buses are modern, comfortable double deckers, they all have Wi-Fi access, the seats all have access to power outlets, and are roomy enough to spread out material for studying or work.

- Megabus now operates around 135 buses each day to and from 50 U.S. cities using existing U.S. infrastructure, i.e. our existing road system. Business is so good that this year the company hired an additional 270 workers, invested $36 million in its operations, and each month this year will end up purchasing five to six new double decker buses each month. All of this success came without any taxpayer bailout or Federal government loan guarantees.

- Compare this ease of growth and expansion to the pain and slowness of Obama's proposed high speed rail program. Money from his failed stimulus program was allocated for high speed rail line development. But the process included waiting for states to submit proposals to get their hands on the money, Federal officials had to take time to review and approve the state proposals, state and Federal officials then had to sit down and negotiate plans with freight companies that already owned a lot of the property where these high speed rail lines would go, and after all of this, many of the approved plans never moved forward.

While all of this bureaucracy was going on, the Megabus-like companies were already moving satisfied customers around the country on existing infrastructure without using taxpayer money.

- Within two years of its launch, Megabus was handling 2 million passengers a year and now handles about 4 million passengers a year. Obama's high speed rail plans handle zero passengers a year. These passengers have tended to be in the 18 to 34 year age bracket, are well educated, digitally connected, and either in college or are college graduates.

However, these profiles seem to be evolving as the clean, modern and convenient buses are starting to attract senior citizens who are touring the country, business customers, and single women who really enjoy the ability to pick up a bus at a designated curbside location and not at an old, dingy, dangerous bus depot.

- Obama's high speed rail plans now operate no new train lines, have not resulted in any job creation, and the administration originally asked for $53 billion of taxpayer money to get started for a rail line infrastructure that will take years, if no decades, to match what Megabus and others are already doing today.

- The company maintains a top safety rating form the Federal Motor Carrier Safety Administration. Both Megabus and BoltBus are subsidiaries of major corporations and not fly-by-night operations so the need and desire to maintain a first rate safety record is an integral part of their operations.

- All of their buses come with GPS tracking systems to track driver behavior and all seats come with seat belts, something that is not a Federal requirement.

- Megabus ridership is up 48% this year while airline passenger volumes are up only 5% and Amtrak ridership is up only 6%.

- Megabus and its competitors are best suited for the 200 to 300 mile trips that an American might want to take. Anything less than 200  miles is best suited for a private car trip, anything longer than 300 miles is best suited for an airline trip when you consider the cost benefit tradeoffs of time, money, and convenience. However, many of the most popular intercity distances fall into this category including New York/Boston. Los Angeles/Las Vegas, New York/D.C., Dallas/Houston, Orlando/Miami, Atlanta/Nashville, etc.

Thus, there are many routes that are a perfect fit for Megabus and its competitors, the exact routes that high speed rail is best fit for.
As an example, the Business Week article charts out a comparison about all of the different ways to get from Washington D.C. to New York. Megabus-like options are, by far, the less expensive, about one fourth the cost of a regular Amtrak ticket, about on sixth the cost of an Amtrak Acela ticket and airline ticket and about one third the cost of a car trip.

The bus trip would take the most time relative to the other options. It would take about four hours by Megabus to make the trip vs. about three hours by Amtrak to make the trip. However, you would be paying much less to take an extra hour, many people find that trade off acceptable.

- Environmentally speaking, the bus is at much more efficient than if every rider had used their own car to make the same trip. The article cites a consulting firm's estimate that the buses are already reducing fuel consumption by 11 million gallons of gas a year.

Wow:

1. There are existing bus transportation service that offer convenient, clean, modern, and very inexpensive transportation options between major U.S. cities.
2. These bus services use existing U.S. infrastructure and require no significant additional investments by the U.S. taxpayer.
3. These bus companies operate profitably and need no taxpayer bailouts or subsidies.
4. These bus companies are already in operation and serving millions of Americans every year.
5. These bus companies avoid the security hassles of going to an airport and possibly getting manhandled, groped, and humiliated by a Federal TSA employee.
6. These bus companies reduce our reliance on oil products and produce less carbon outputs to harm the environment than some other transportation options.
7. These bus routes are already serving the same destinations that Obama's high speed rail lines would redundantly serve.

Now compare these benefits to what the Obama administration is proposing for its grandiose high speed rail line option:

1. Most of this plan does not exist today while the bus option is in full operation.
2. High speed rail line would eventually require hundreds of billions of taxpayer dollars to build out the infrastructure.
3. If Amtrak is any indication, the taxpayer would eventually end up subsidizing the operations of high speed rail lines.
4. Obama's high speed rail plan currently serve no American travelers.
5. I am assuming there would be security checks on any new high speed rail lines since they would be an attrative terrorist target.
6. High speed rail would likely reduce the nation's carbon footprint, assuming anyone decided to actually ride on the lines which would likely be much more expensive than the bus fares.
7. The high speed rail lines would be in direct competition to an efficient, successful and already operational competitor.

Let's review: there is a simple city to city, existing, successful, convenient, pleasant, and inexpensive transportation process that is already serving millions of Americans using existing national transportation infrastructure which uses no taxpayer subsidies. There is a  proposed transportation process that does not already exist, will take years, if not, decades to make operational, and will require hundreds of billions of taxpayer dollars to build new infrastructure and to subsidize operations.

Which one do you think our political class will choose, the simple, elegant, cheap option or the complex, cumbersome, expensive option?

Given our $15 TRILLION national debt that our out of touch political class has rung up, the answer is pretty clear.




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