Creating road space without building roads

This unreliable article suggests that each passenger trip on the QR passenger network is subsidised in the order of $9 – probably double the average fare price. How this figure was determined is anyone’s guess, but the issues surrounding such apparently high subsidies are interesting.

While at first the $9/trip figure may seem high, it is important to acknowledge that the benefits of subsidising public transport do not go solely to the users. Each time a person uses the rail network they are not using the road network (either car or bus trips) - thus simultaneously improving traffic conditions for road users. What looks like a rail subsidy could easily be classified as a road subsidy. The reduction in road usage has a similar effect to increasing road capacity.

Most public transport systems around the world are subsidised from the public purse. If you subscribe to the belief that a degree of government support is warranted due to external benefits for road users, the two key questions to consider are:
1. How much of a subsidy is acceptable?
2. How can incentives be provided to improve the efficiency of the whole transport network?

Some guidance on the first question could be gained by looking at a cross-country comparison; however the second question is far more interesting.

We can see examples of the failure to consider multiple types of transport as a single efficient solution to urban (and regional) mobility. The profitability of the Airtrain has been completely undermined by the expansive government subsidy of competing road networks. Had the government instead heavily subsidised the Airtrain link itself (to make ticket prices an attractive alternative to taxis and pickups), the demand for road space would have reduced as train use increased.

Further, the success of the rail network rests on the failure of its competition. We can never reach a situation where there is high public transport patronage while at the same time having cheap uncongested private automotive alternatives. These two networks are in competition and the direction of government assistance can tip the advantage either way it chooses.

The ignorance of this reality and the external benefits from new transport connections may be one reason that the traffic forecasting for Brisbane’s major road projects grossly overstated traffic demand.

Using this case study we can make a couple of pertinent observations:
1. New transport connections provide internal benefits to users, as well as benefits to users of competing transport connections
2. Subsidies to incentivise rail use can provide the net effect of increasing road capacity through road spending.