Not All Transit Lines Cover Their Costs, and That’s Okay

There is often a lot of emphasis placed on routes that are "profitable" within a transit system and calls for more profitable routes to be built, but let's talk about why this is shortsighted and why we need routes that "lose money".

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[janoschwecker]

what upsets me is that public transport should always be profitable, but no one asks if the car is profitable

[thegrowl]

British Rail cut off its feeder routes that were unprofitable in the 60s, and kept the essential mainline routes that were profitable. What they didn't account for was that the feeder lines fed the mainline passenger traffic, so when these routes were cut off, people bought cars and rather than parking and riding to the station like Beeching thought would happen, they simply used the car for the entire trip, why wouldn't they? Now Britain's road network is bursting, and a total lack of investment into new rail routes mean those that remain are bursting too.

[J-Bahn]

following the theory about transit lines needing to be ‘profitable’ is why bus deregulation in the UK has been a disaster for the country’s local public transport

[RichardFraser-yt]

" This rail line is profitable so lets cut all subsidy to all transport routes "

[ngarewyrd]

I've never heard of anyone using profitability as a metric to judge roads, so why should we do that with rail transit?

[ricequackers]

In microeconomics these are known as complementary products and loss-leaders. Taking the supermarket example, there's a reason that low margin or even loss-making essentials like milk and bread are placed at the back of the store, so that you walk past all the profitable products first and hopefully buy them. Same goes for transport.

At a macro scale, roads, railways, electricity, water and other infrastructure are loss-leaders for, you know, a functioning economy and society.

[emalieth]

Reece is the hero we all need! Concise, clear, and solid argument. We would need a few people like you in Montreal to shift the discourse around public transit!

[msmoniz]

Thank you for this! It drives me nuts when people talk about public transit being profitable!! Do they demand the same thing of police? Fire? EMS? Snow clearing? Park maintenance?NO!!! These are public services that allow urban society to function, while they should be managed as much as possible, their value should NOT be based on profitability!

[MaJoRMJR]

Public transit is a natural monopoly, which should be run for cost, any profit should go back into it to fund improvements to it. The value of public transit isn't necessarily about making money operating it, but allowing others to profit from its existence, such as from tourism resulting from public transit. Also the cost to the planet of cars vs cost to the planet of public transit is another significant factor that currently get overlooked, despite the climate emergency we have been suffering from for decades

[mygins]

Allen Fisher is going to be happy about this one

[barryrobbins]

Expecting every aspect of public transit to be profitable is like having highways and main thoroughfares without all the arterial roads that connect to them.

[rogersexton]

Hello Reece, Brilliant video! Everything you say is clearly applicable here in Britain. Your crucial point is at about 5m 50s., where you speak about the ;affordability [for people] of public transport. Here in Britain, I am hoping that the new government understands that point.

[johnmyers]

Thank you so much for making this video. I could not tell you the number of times I have wanted to pull my hair out during these profitability arguments. What I find crazy here in the EU however is how we are no in the process of liberalising the transit market for different providers to operate routes. However, what this results in is the "profitable routes" get more competition, which lowers the amount of revenue the traditional state operator is able to take in to subsidise and run the other "non-profitable" routes at a reasonable cost.

[keithparker]

Over 60 years ago, the British government brought an 'expert' from industry to make Britain trains profitable! Dr Beeching severely pruned the rail network to leave only those 'profitable' lines but failed in his task. You missed a significant factor in your argument - for a system to be 'profitable' not only must it cover it's operating costs, but also the costs of setting up the system and the replacement of vehicles which will have an expiry date.

[michaelcobbin]

“Profitable” transit routes must be a North American/USA concept. In Australia, the voting public just assumes that the state government needs to provide public transport that accessible for commuters. I assume European and Asian citizens expect that same from their governments.

[dudestir]

Any time someone says they want to cut an "unprofitable" bus, I always respond by suggesting we rip outall the unprofitable highways. I hate the double standard, at least in the US where I live.

[ErnestLordGoring]

So you mean Public Transport network is a cohesive whole?
*Dr Beeching has left the chat*

[robertheinrich]

many years ago, in austria, the company westbahn started. it was widely regarded as a weird step to immediately serve just the most profitable line, while the ÖBB had to serve many other routes that are not profitable.
as of now, the situation is more interesting. the fear, that westbahn takes riders from ÖBB leaving them without any profitable lines, has not materialized. but having more than one service provider sparked more interest in using the line. and nowadays, even DB operates on that line.
in other words, the fear that the share of the cake got smaller didn't materialize. instead the cake grew larger. currently, between vienna and linz, most trains are just full, almost too full, and there are plans to increase the amount of trains going on that line.

[Urban_LP]

This video is sooo spot on. People always say "But why should I pay for your transit that isn't making money blahblahblah", it's because public transit is public services. Public transport is as a public service as a Public School or Public Hospital is. None of them exist to be profitable but to serve the population!
And these people always seem to forget that cars aren't making money either...

[jadensawunyama]

Hey RMTransit, great video! Could you do a video on the RailRunner in New Mexico? The commuter rail service runs from Belen, NM to Santa Fe, NM. It had a ridership of around 585, 000 in 2023. The line could be so much better because if they decided to double track it, improve the service, run trains at 110 mph instead of 79 mph, and improve the stations and make them nicer places to wait. It would be one of the best in the US.