by Katarina Hall, Innovation Fellow
Posted Novemeber 14, 2019 In Scholar Commentary

This article was originally posted on the Medium publication The Benchmark

On November 5th, voters from 19 states passed 89 percent of the transportation measures on their election ballots. One of the most interesting votes occurred in Houston, where voters approved a bond of $35 billion to improve the city’s public transportation system. The bond is earmarked to fund 75 miles of Bus Rapid Transit (BRT) lanes, 16 miles of Light Rail Transit (LRT), and invest $600 million in buses. Similarly, in Maine, voters approved a bond of $85 million to fix roads and bridges and another of $20 million to use in railroads, airports, and ports. Voters in New Mexico and Cincinnati also passed tax increases to fund public transportation and infrastructure. In Denver, voters signed off on a proposed Department of Transportation and Infrastructure.

While November has been an excellent month for public transit enthusiasts, securing the appropriate funding is just the first step towards enhancing mobility. City officials still have to find the most cost-effective use of a city’s dollars. The cost of these projects amounts not only to the time and money spent by public agencies but also to the opportunity cost of transit projects that could have genuinely improved mobility. Here are a few clear examples where this is the case:

Guatemala City’s First Modern Rail Transit
In an attempt to solve traffic congestion, Guatemala City launched its new transportation project last month. Using the old existing railway tracks, the Municipality of Guatemala plans to build a light rail project to improve mobility within the city. The project, known as Metro Riel, would be the first urban train in the country. Metro Riel is planned to run along 26 miles from North to South, stopping at 20 stations around the way and aiming to serve more than 250,000 passengers daily.

As with many other cities around the world, Guatemala City is plagued with traffic congestion. Every day, over 1.1 million vehicles are entering the city, dropping average rush-hour commuting speeds to 3–5 mph. Metro Riel is proposed as an alternative for commuters seeking a faster option than stand-still traffic and to reduce the number of vehicles on the street.

While the need for more public transit in Guatemala is indisputable, this project will cost the city an outstanding $772 million. For a developing country, this is a significant sum. It is unusually large when considering that Metro Riel might not be the best solution for congestion. Here are three reasons why officials might want to reconsider this investment.

First, Metro Riel is set to run on the existing railroad tracks that were built in the 1870s. With most of the country’s railroad operations suspended in the 1950s, the majority of the tracks have fallen into disrepair. For Metro Riel to function, the rails need to be repaired, requiring further investments that are not accounted for in the budget. To make things even more complicated, many squatter settlements have popped up along the existing railroad tracks. Removing them would also require a considerable amount of time and resources, and not to mention land disputes.

Second, Metro Riel is proposed as an intra-city transit system, yet this fails to take into account the traffic patterns of Guatemalan commuters. Most of the traffic in Guatemala City is not caused by vehicles moving within the city, but by people living outside the city commuting in and out for work. Guatemala City is the largest labor market in the country, meaning that a significant amount of people need to access the city daily. Traffic congestion has increased throughout the years due to the city’s segregation of uses: while most jobs are in the center of the city, housing is located in the periphery where the most affordable housing options are.

The Municipality of Guatemala estimates that by 2020, 24 percent of the population will live in the city, while the remaining 76 percent will live in the periphery and drive into the city for work. Metro Riel focuses on moving people within the city, yet if transportation initiatives were to take these transit patterns into account, then a commuter rail from the suburbs into the city would have the most impact on reducing traffic congestion.

So what is the opportunity cost of Guatemala’s light rail project? The $772 million that is being spent in Metro Riel could go a lot farther if they were invested into expanding the BRT, Transmetro, which provides dedicated lanes for public transit buses. Launched in 2007, the Transmetro already has 325,000 daily passengers, much more than the Metro Riel hopes to transport. You can use any of the three routes by paying $0.13. According to the Municipality of Guatemala, the BRT has reduced the number of cars entering the city by 70,000 per day, having a significant impact on congestion reduction in the city. This year Guatemala City launched 25 new BRT stations, costing the city $14.7 million. If the $772 million being used for the Metro Riel was instead used to expand BRT stations, Guatemala City could build over one thousand new BRT stations and serve over 3 million commuters.

Reviving the Streetcar: DC’s H Street
Another example of a transit initiative whose investment could have been better used elsewhere is the DC streetcar. Launched in 2016, the DC streetcar aimed to increase travel options for residents and complement existing transportation systems. The trolley moves along eight different stops miles up and down the capital’s H street corridor, taking 20 minutes from one end to the other. Each car can move 150 people at a time.

The grand vision behind the DC streetcar was to link neighborhoods around the city, boost economic development and affordable housing along its corridor, and reduce traffic congestion and parking demand. The H Street corridor is meant to be only the beginning of the whole project. While it only operates for only 2.2 miles in 2019, it was supposed to extend for 22 miles throughout the city, supporting other existing transit.

Similar to other transit projects, the investments in the DC streetcar could have been spent better. Here are three areas where the streetcar fell short:

While transportation projects tend to take a significant amount of time to complete, this 2.2-mile operation took longer than it should have: 9 years. Someone already did us the favor of listing amazing things that took less time to build than the DC streetcar: DC’s red line, the first transcontinental railroad, the Erie canal, the moon landing, and every Harry Potter film ever made.

Second, not long after the DC streetcar was introduced, DC started experimenting with e-scooters. This provided even more options for DC commuters, and at a faster speed. Some studies have found that streetcars systems operate slower than buses at an average of 7.4 mph. The DC streetcar, however, runs even slower than the average at only 5.7 mph. Compare that to e-scooters, which can go from 15 to 30 mph. Some even claim to be able to run faster than the DC streetcar. Not only is the speed of the streetcar slow, but riders also have to factor in the waiting times between cars. Passengers have to wait 10 to 15 minutes to ride the streetcar, adding unnecessary extra time to their commute.

Finally, the streetcar was expensive: it cost $200 million to build. In total, DC spent 3.5 times more money than other cities have on its streetcar. Just by comparing the costs of the maintenance facilities for the streetcars, we can see how DC spent so much more than other cities. While DC spent $48.8 million, Tucson spent $13 million, Cincinnati $11.5 million, and Seattle $11.1 million. Apart from the construction costs, the DC streetcar heavily subsidizes each ride. While riders do not have to pay anything to ride it, in 2016, the city paid $22.95 per mile to move one passenger.

Instead of spending $200 million to build the streetcar and maintaining free ridership, that money could have been spent more efficiently. For example, the money could have been allocated to build the proposed purple subway line, interconnecting most of the major transit lines in Maryland. Or it could have improved the declining Metro, which is constantly losing riders due to the low frequency of transportation, inefficient services, and frequent mechanical failures. Another option would be to simply invest in updating and expanding to update and expand the existing bus system.

New York City Ferries
The New York City Ferry system is another example of a poor allocation of resources for public transit. Three years ago, Mayor Bill de Blasio launched a system of ferries to provide affordable commuting options to the city better. The ferry system consists of six routes and aimed to serve more than four million passengers.

The original cost of the project was $325 million for the fleet of ferry boats and docks. However, the costs have since doubled. While riders only pay $2.75 (the price of riding the NYC subway), the city is paying around $10.73 per passenger. The ferry system’s subsidy is ten times higher than the subsidy for the subway and more than twice as much as that for the Metro-North rail and MTA buses.

What warrants such a substantial investment in ferry transportation? Certainly not demand. Ferries have the lowest ridership levels of all of New York’s transit systems. To put it into context: The ferries transport 4 million passengers a year, MTA buses transport around 691 million people annually, and subways transport 2.7 billion people. This means that the ferry transports fewer people in a year than the subway system transports in a day.

Ferry riders are also seasonal. There are more passengers in the summer months than in the winter. On any given summer day, you will find more tourists using the ferries to enjoy the cityscape instead of commuters going to and from work. This only points to how the ferries are being used. The ferry system is also not integrated with the rest of NYC’s transit systems. Ferries do not accept MetroCards, making riders pay a second time once they board the subway or a bus.

And New York isn’t alone. Ferries, in general, tend to be poor investments. The National Transit Summaries and Trends report for 2017 places ferries more broadly as having the highest operating cost per hour out of all of the different transportation systems they rank. Despite being the third-largest ferry system in the US, New York’s ferries have the second-highest subsidy per person and the second-lowest recovery rate. Fares only cover 22 percent of its operating costs, requiring subsidies to cover the rest of the ride.

Despite the extreme costs and low ridership numbers, city officials are planning to expand the ferry routes. A new route expected to launch this year between Coney Island and Wall Street will require a subsidy of $24.75 per passenger per ride. Before continuing in such an expensive endeavor, city officials should instead evaluate alternative transportation systems that are more efficient and cost less. Here are a few simple initiatives that would go a long way: changing the outdated 1930s technology of the subway systems, connecting transit to NYC’s major airports, adding elevators to subway stations, upgrading the bus system, or implementing micromobility options around the city.

What Should Transit Aim For?
City officials seeking to improve public transportation should take opportunity cost into account. Many times, fighting congestion is as simple as expanding or improving an existing system, or even looking outside the box to support emerging private initiatives such as ridesharing or micromobility. However, the politics surrounding transportation tend to focus on introducing new and advanced modes of transit. Instead of thinking about transportation this way, we should focus more on the people that will be using the transportation. As Christoff Spieler, author of Trains, Buses, and People, puts it: transit is about people, not technology. Riders don’t care about the type of transportation they ride. They do care about whether they can get to their destination on time, whether their transportation is reliable, whether the costs are low, whether they can be connected within the city, and whether their commute is shorter. Instead of chasing the next shiny new public transit project, cities should focus on more economical ways to make transit work better for their residents.

CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.