Tuesday, October 26, 2010

The rise of inter- and intra-city luxury buses threatens rail

The eminent Bob Poole over at Reason has another insightful analysis in his Surface Transportation Innovations newsletter which I wanted to excerpt, but has so many good points I just highlighted my favorites in bold:

Bus Continues to Challenge High-Speed Rail

I've written previously about the remarkable come-back of the inter-city bus ("coach") industry this decade, as typified by the highly competitive New York to Washington, DC market, kicked off by new-entrants BoltBus and MegaBus. These services offer reserved seats, power outlets, free wi-fi, and other amenities. That plus their low fares makes them highly competitive with both the airline shuttles and Amtrak's Acela service in this corridor. But this concept has begun spreading to the Midwest and the Southeast, and is also invading some of the short-haul and commuter markets on which some high-speed rail (HSR) plans are depending for part of their fare revenue.

To begin with, Joseph Schwieterman of DePaul University recently explained to the readers of Practical Traveler (July 16, 2010) the service features that have enabled these bus services to attract a growing market share, beyond the typical inter-city bus clientele of relatively low-income people and students. These features include:
  • Online ticketing-which ensures that most passengers are internet-savvy;
  • Guaranteed seats-which ensures a comfortable travel experience, with no pre-trip anxiety over seating vs. standing;
  • Curbside departures-which avoids the typically downscale bus stations many prefer to avoid;
  • Onboard technology-again, appealing to business and professional travelers.
Competition in the northeast corridor has led Greyhound itself to introduce upgraded buses on its routes linking Montreal, Boston, New York, and Washington, offering wi-fi and power outlets, three-point safety belts, and increased leg-room.

Schwieterman's researchers found that most of the new services of under four hours are operated as express, with no stops along the way. They also found similar services in the Midwest (e.g., Chicago to Madison, Milwaukee to Madison); in fact, about 40 cities in the Northeast and Midwest, as well as nearby Canadian locations, now have new-generation  bus service.

The South appears to be the next frontier. RedCoach, owned by one of the largest transport companies in South America, is now offering daily express bus service in Florida and Georgia. The new buses seat 27 instead of 56, offering far more leg-room and including a foot rest, lap desk, and power outlet, in addition to wi-fi. Service between Miami and Orlando is scheduled at just four hours, and this month is being offered at an introductory price of just $40 round-trip. RedCoach serves six Florida cities thus far, plus Atlanta. Its expansion plans include Tampa, meaning that it will offer express service between Orlando and Tampa-an alternative to the planned $3 billion (of taxpayer money) high-speed rail line for that corridor, as well as the much more costly Miami-Orlando HSR line that proponents hope will follow. Yet like all the other express bus operators, RedCoach receives no tax money, and pays highway user taxes like all other motor vehicles do. Plus, if a particular route turns out to be a loser, it's easy for the company to shift the vehicles to other routes. You can't do that with HSR.

Luxury bus service is also entering commuter and other short-haul markets. In Silicon Valley, Bauer's Limousine Service is well-known for operating the corporate buses that transport numerous Google and Facebook employees to and from work. Recently, the company has begun offering premium commuter bus service to others in the Bay Area. Under the brand name Wi-Drive, Bauer has introduced four $500K luxury buses. For $5 to $9 per ride, the service offers leather seats, power outlets, free wi-fi, restrooms, and even coffee and pre-ordered breakfasts. In its first year, Wi-Drive buses are running at 60-70% occupancy, with routes serving destinations both north and south of San Francisco.

Another completely unsubsidized short-haul service is Disney's Magical Express, which links Orlando International Airport with the various Disney resorts. It provides door-to-door service for both people and baggage, sparing families of the hassles of lugging bags and renting cars. Magical Express averages about 6,000 passengers per day, about 7% of the airport's total. It is so popular that low-fare carrier Allegiant Air, which typically serves secondary airports, is shifting about a dozen of its flights from Orlando-Sanford Airport to Orlando International, so that its passengers can make use of Magical Express. Orlando International to Disney is one of the planned markets for the $3 billion Orlando-Tampa HSR service.

I continue to view HSR, as currently planned in the United States, as largely a solution in search of a problem to solve. Why this nation should commit tens (and potentially hundreds) of billions in taxpayer dollars to create this new mode of inter-city passenger travel, when the entirely unsubsidized luxury bus industry can do the job, is beyond me.

Hear, hear!

First, can somebody please explain to me why nobody has created this service yet for the Texas Triangle? (Maybe it's the cheap, frequent Southwest service?)  It seems like a great opportunity.

Second, we really need more of these services on a commuter basis (like The Woodlands Express) connecting all parts of Houston to all of the major job centers, and that includes you, Metro.  The fastest and best way to make it happen would be for Metro to offer a straight per-passenger-mile subsidy and let free-market contractors compete on routes, schedules, frequency, punctuality, and amenities.

More on the economics and pictures of luxury bus service here.

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Tuesday, October 19, 2010

Size matters, HSR, CA vs TX, rail, regs, stats, and more

Before getting to a batch of smaller items, I wanted to mention that I met with Peter Schwethelm for HISD school board district 8 this week, and he had some well-reasoned arguments on how to improve public education.  I don't do official endorsements on this blog, and he and I didn't agree on everything, but he was thoughtful, knowledgeable and open-minded - which is more than I can say for many politicians.  The Chronicle profiled the race in this article today.

On to the misc items this week:
“The history of transportation shows that we adopt new technologies when they are faster, more convenient, and less expensive than the technologies they replace. High-speed rail is slower than flying, less convenient than driving, and far more expensive than either one. As a result, it will never serve more than a few marginal travelers.” 
"Amtrak brags that its high-speed Acela between Boston and Washington covers its operating costs, though not its capital costs. It does so, however, only by collecting fares of about 75 cents per passenger mile. By comparison, airline fares average only 13 cents a passenger mile, and intercity buses (which, Amtrak doesn't want you to know, carry about three times as many passengers between Boston and Washington as the Acela) are even less expensive.
According to the Bureau of Economic Analysis, Americans spent about $950 billion on driving in 2008. This allowed us to travel, says the Federal Highway Administration, more than 2.7 trillion vehicle miles, for an average cost of about 35 cents per vehicle mile. Since the California High-Speed Rail Authority estimates cars in intercity travel carry an average of 2.4 people, the average cost is less than 15 cents a passenger mile."
"The praise for Phoenix light rail reminds me of a home I visited recently that had a $50,000 super-size 100-inch flat screen TV.  That TV was gorgeous.  Everyone who saw it immediately fell in love with it.  It worked flawlessly, and everyone at the party wanted one.   In fact, it was probably the greatest, most sensible and successful purchase of all time … as long as one never considered the cost.  This is exactly how light rail seems to get evaluated."
"The question is, what causes spending to expand well beyond initial projections? Explanations range from subtle psychological impulses when numbers are involved (irrational optimism), to the economic phenomenon known as the winner's curse (projects with rosier estimates are more likely move forward), to outright lying."
I like the proposed solution: an independent agency to validate projections.  Maybe something similar to the Congressional Budget Office?  Texas could certainly use such an agency to validate projections on all sorts of projects before moving forward, from Metro rail lines to TXDoT freeway expansions.  Anybody want to submit a bill to the upcoming legislative session?
After analyzing the statistics, the answer was clear: Cities are like elephants. They get more economical with size. It doesn’t matter whether the city is located in China, Europe, or the American Midwest; every city is simply a scaled version of the same city. In metropolis after metropolis, the indicators of urban “metabolism”—like the per-capita consumption of gasoline or the surface area of roads or the total length of electrical cables—scaled to an exponent of (population)0.8, which is very similar to the biological equivalent of (mass)0.75. This means that a city can double its population without doubling its resource consumption. “One of the basic principles of cities is that it’s more efficient to bring people together,” West says. “You need a little bit less of everything per person. It’s the exact same way in biology. As animals get bigger, they require less energy to support each unit of tissue.”
Bottom line: growth matters, and people who argue against growth are arguing for economic stagnation.
Finally, I'd like to just pass along some recently released random stats on Houston.  Note the higher average income and lower cost of living - that's why the living here is so good.  Also note our lower public transportation and higher carpool shares vs. the nation, which I think is a strong indicator of our decentralized, multi-centric metropolis of many different job centers (rather than everybody trying to get downtown, <7% of jobs), and a good argument for a new and better vision for Metro.  Thanks to the Greater Houston Partnership for these stats, esp. Patrick and Marycruz.

Houston Metropolitan Statistical Area¹ 2009 ACS Highlights include:
  • Population was estimated at 5.865 million and households at 2.004 million.
  • The median age of the region’s residents was 32.9 years, compared to 36.8 nationwide.
  • The percent of the population age 25 and over with a bachelor’s degree or higher was 27.9, the same  as the nation.
  • In Houston, the labor force participation rate for those ages 16 and over was 68.5 percent. Nationwide, the rate was 65.3 percent.
  • The mean travel time to work in Houston dropped from 28.9 minutes in ’08 to 27.6 minutes in ’09. In the nation, mean travel time also fell, from 25.4 minutes in ’08 to 25.1 in ’09. 
  • In Houston, the percent of workers using public transportation to commute to work totaled 2.2 percent, while 78.8 percent of commuters drove alone and 12.1 percent carpooled.  Nationwide, 5.0 percent used public transportation, 76.1 percent drove alone, and 10.0 percent carpooled.
  • Real median household income was $54,146 in Houston, compared to $50,221 nationwide.
  • The median value for owner-occupied homes in Houston was $139,800, compared to $185,200 in the  nation.
  • The median gross rent was $848 in Houston and $842 in the nation.
  • Nationwide, 84.9 percent of the civilian noninstitutionalized population had insurance coverage, compared to 75.4 percent in the Houston.
  • 1.278 million residents in the region were foreign born, representing 21.8 percent of the population, compared to 12.5 percent nationwide. The percent of foreign born in Houston increased from 21.5 percent in ’08 to 21.8 percent in ’09.
¹ The Houston Metropolitan Statistical Area includes the following counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller.

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Tuesday, October 12, 2010

Highlights from the American Dream Coalition conference

The American Dream Coalition just had their annual conference in Orlando.  I was unable to attend, but their presentations have been put online here.  Here are some key highlights I found:

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Tuesday, October 05, 2010

Summer 3Q10 Highlights

It's time again for the quarterly highlights post.  These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument.

Don't forget we offer an email option for the weekly posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link (Atom) (or RSS 2.0) is also available. As always, thanks for your readership.

And from Spring 2Q10

Winter 1Q10:

And don't forget the highlights from the first few years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging).