The following column was published on the X-PAC website in July, 2000.

Train drain: Why transit users should oppose light-rail expansion

by John A. Charles

Most Portland residents are probably under the impression that whenever Tri-Met opens a new light-rail line, transit service will improve, and significant numbers of people will leave their cars behind to take the train. This is a logical assumption, but it is also wrong.

Fixed rail is the single most expensive way to move people. Because Tri-Met has squandered so many of its resource on light rail-in the futile pursuit of upscale suburban passengers who own cars-it is unable to adequately serve existing customers, most of whom live in Portland and ride buses. Tri-Met could easily increase bus service at less than one-tenth the cost of new rail. Additional transit service could be provided at no public expense simply by de-regulating the transit industry and allowing private entrepreneurs to compete.

Though public support for light rail has declined considerably since the 1980's, there is still some popular appeal, based on at least 6 common myths:

Myth # 1. Light rail gives people more transportation choices. Light rail does not expand options for transit consumers, it simply replaces low-cost buses with high-cost trolleys. When East-side MAX opened, Tri-Met cancelled the two previously-operating express bus routes on the Banfield Freeway, and re-routed other east-side buses to become feeder routes for light rail. Tri-Met did not want bus service competing with its own trains, and manipulated the bus routes to artificially inflate train ridership.

This was almost uniformly bad for transit customers. For many of them, their bus routes were changed to take them in the wrong direction, to a rail transfer station. After waiting for the connection, they found that there were no seats, as each rail car only has 72 seats (76 in the older cars), and there are only 2 cars per train.

In the end, many transit customers realized that their daily commute had become longer, and less comfortable, after light-rail opened up. An unknown number of them simply left the system and traveled by some other means. This experience was repeated on the westside MAX, where the Hillsboro Express bus route was shut down the day MAX opened.

If Tri-Met proceeds with its plans to build a North Portland line, existing bus riders will find their routes cannibalized by the train. In addition to the inconvenience, this will be a regressive income transfer from lower-income bus riders to higher-income MAX riders. According to Tri-Met's latest customer profile, the majority of transit customers who ride MAX (but not the bus) have an average household income greater than $40,000. Their primary use of MAX is for "recreation or shopping", not essential work trips. Virtually all MAX-only riders also own cars-which they use for daily work trips.

In contrast, bus-only riders take transit more often and for a greater variety of purposes than those who only ride MAX. Bus riders are more likely to depend on transit as their primary means of transportation. According to the survey, bus riders are "slightly younger on average, more likely to be single, have a greater ethnic diversity, [and have] lower household income."

If North Portland MAX is built, it will replace a low-cost bus system used by many poor residents for all of their travel trips, with an extravagantly expensive train used primarily by upper class professionals for recreational and shopping trips in downtown Portland. This will replicate the experience of Los Angeles, where rail construction costs siphoned so much money away from bus service that low-income bus riders eventually had to file a civil rights lawsuit against the transit agency. The district is now under court order to restore bus service, and most rail construction has been terminated.

Myth # 2. Light Rail will reduce traffic congestion. Eastside MAX went on-line in 1986. Between 1986 and 1995, average daily traffic counts on the Banfield freeway increased from 117,928 to 162,254 (measured near Lloyd Center), despite the adjacent light rail line and free parking for MAX riders at the Gateway Transit Center.

The Environmental Impact Statement for the proposed N. Interstate Avenue light-rail extension predicts that traffic congestion on I-5 and all nearby arterials will actually worsen with light rail. According to the report, traffic will go up on N. Denver by nearly 60%, N. Albina by 33%, N. Greeley by 25%, and on I-5 by 1%. The rail alignment will destroy two lanes of road capacity on Interstate Avenue, shifting traffic to other routes.

Myth # 3. Travel on light rail will be fast. North Portland MAX is planned to operate at 16 MPH. East-side MAX originally averaged 19.8 MPH, but over time the speed has dropped to 14.5 MPH, due to the addition of new rail stops. Under no circumstances does Tri-Met ever predict running any of the region's trains at speeds faster than 21 MPH. The reason is that despite its name-Metropolitan Area Express-there is no "express" in the MAX system. All trains are local, meaning they must make each stop.

By comparison, the nation's first interurban electric trolley was opened in Portland in 1893, and ran to Oregon City at 14 MPH. Improving the speed of regional trains by .5 MPH in 108 years is hardly an inspiring track record.

A well-managed bus system can easily achieve higher speeds than MAX. For instance, up until May of 1998, C-Tran of Washington operated express bus service from Gateway Transit Center to downtown Portland (via I-84), with scheduled running times of 15 minutes, even with rush-hour traffic. The same distance by MAX, regardless of the time of day, is about 24 minutes.

Even buses operating on local streets can achieve higher speeds than MAX because some buses can be designated as Express routes. With fewer stops, average speeds will be higher than the 14.5 MPH speed of MAX.

Myth # 4. Light Rail is necessary to develop a "compact" city and to prevent expansion of the urban growth boundary. The historic role of trains since the 1890's has been to move people away from dense central cities. This is reflected in the phrase, "Streetcar Suburbs." There is no evidence that Tri-Met's attempt to reverse this trend has or will be successful. On the contrary, because Tri-Met insists on building large park-n-ride lots with ample free parking along all MAX lines, it is likely that MAX has been a sprawl-inducer, not a tool for compact development.

Myth # 5. Rail is cheaper than bus service. Rail is the most expensive way to move people, by a wide margin. The total cost for North Portland LRT will be approximately $10 per boarding ride on light rail, versus $1.6l for existing bus service. There are 3 primary reasons for this cost differential. First, at $64 million per mile, the North Portland MAX will be very expensive to construct. In contrast, increased bus service, or any other form of rubber-tired transit, can easily used existing roads.

Second, once the line is built, operational costs cannot be shared by other users, as Tri-Met has the exclusive rights to the track. Road-based transit vehicles are able to share both capital and operating costs of roads with millions of motorists through user fees (tolls or gas taxes).

And third, in order to get any riders, Tri-Met has to build expensive park-and-ride lots, and reconfigure bus routes to become feeder routes for MAX. Although Tri-Met typically does not report these as rail-related costs, they are clearly attributable to train operations.

Myth # 6. Light-rail will help improve air quality. There is no evidence that light-rail has ever made a measurable difference in Portland's air quality, and even if it did, it caused environmental damage somewhere else because of the large electricity demands of the system. On a life-cycle basis, light-rail probably causes more air pollution than it prevents, due to the massive fossil fuel consumption used during construction, and the large number of free parking spaces provided to lure suburban commuters once the train is operational.

An Alternative Vision

The problems with Portland's transit are not caused by bad management or lazy employees. They are caused by the lack of market incentives. Tri-Met has both a monopoly on service (competition is barred by law) and a monopoly on subsidies. The most lucrative of the subsidies, the regional payroll tax, now provides over $160 million per year, regardless of how well Tri-Met does its job. Every time the economy grows, Tri-Met gets more money through the payroll tax. Under this arrangement, Tri-Met has little incentive to improve service.

Utilizing Market Forces in Portland

There are a number of ways that market-based transit could be instituted in Portland.

1. Require Tri-Met to competitively contract out all routes. In essence, this would split the Tri-Met Board from the agency. The Board would establish routes, but the agency (perhaps operating under a new name with new authority) would have to bid for those routes with private sector firms.

If this occurs, it's important that the light rail operations be included. Much of the ridership potential for light rail has been squandered due to Tri-Met's insistence that all trains stop at every station. The lack of express service means that the trains are simply too slow to compete with the private automobile. Private vendors would have incentives to introduce better service if given the chance to bid.

2. Open the transit market to unlimited entry by service providers. This could be done in lieu of #1 above or in conjunction with it. The empirical evidence from other markets that have been de-regulated-including the airline and surface freight industries-clearly demonstrates that competition results in higher quality service at lower cost. The transit "market" should include buses, town cars, taxis, and any other form of for-hire transportation service.

Private sector transit is already providing important services across the country. In Miami, a US Department of Transportation study conservatively estimated that 400 private, unsubsidized vans (jitneys) carry as many as 49,000 riders per weekday, approximately the same number of riders as are carried by Miami's billion dollar heavy rail system. Ridership surveys found that 78 percent of van riders were workers with annual incomes less than $25,000 a year. The jitneys have increased net passenger transport ridership in Miami by an estimated 13 percent, at no cost to taxpayers.

The largest US commercial van system operates in New York, where some 2,400 private vans offer superior service to the municipal system. The vans have captured 7% of the transit market, according to the Port Authority of New York.

The primary regulatory role for the government should be to ensure that transit operators are adequately insured and that they are held accountable if they harm people through negligent behavior.

3. Establish "curb rights" to facilitate market competition. One concern that many people have about a de-regulated transit market is that the various transit vendors would weave in and out of traffic, cutting in front of each other to pick up customers at the curb, and generally causing havoc for consumers and other motorists. However, this is an easily correctable problem. The most obvious solution would be to create areas throughout the city where loading and unloading could occur on public streets, and auction off "curb rights" to give vendors exclusive property rights to those sections of the street.

Creation of curb rights would also give transit operators incentives to develop consumer amenities at the curb that address such issues as weather, seating, and security. The general lack of these amenities at Tri-Met bus stops is a major barrier to increased ridership.

4. Reduce the rate of the regional Tri-Met payroll tax and convert the subsidies to transit vouchers. As other cities have demonstrated, good transit does not necessarily require subsidies. However, if policy-makers insist on subsidies, the amount should at least be lowered (Wilsonville's public transit system is supported by a payroll tax one-half the rate of Tri-Met's), and all the subsidies should be converted from supplier-based subsidies to user-based subsidies.

The key to success in transit is competition; subsidies that flow to one provider (as the payroll tax does) will fatally skew the market. If subsidies are administered specifically to low-income riders in the form of vouchers, all providers will have the same incentives to provide high-quality service.

Based on Tri-Met's customer surveys, it's likely that all low-income users could be subsidized at an annual cost of about $25 million. The current payroll tax brings in more than $160 million. The payroll tax rate should be reduced so that revenue is in balance with actual needs.

Conclusion

Most public discussions regarding transit begin and end with the phrase, "we need more money for Tri-Met." Unfortunately, this analysis misses the point. The problem is not a lack of money; the problem is a lack of institutional incentives for transit operators and consumers. Until we merge the transit sector into the mainstream of the market economy, simply "throwing money" at monopoly transit will not improve the situation.


John A. Charles is environmental policy director of Cascade Policy Institute.
Cascade Policy Institute's home page