It takes £2,239,300,000 (US $3,749,250,000) in subsidies to operate mass transit programs in the UK’s capital city, according to the Transport for London Annual Report and Statement of Accounts released this week. These subsidies come from a number of taxes imposed on motorists who in many cases do not use public transportation. London’s most burdensome levy on drivers, the congestion charge, is so inefficient that for every £10 taken from drivers, £6 is spent on the bureaucracy required to administer the charge.
It takes £1.8 billion (US $3 billion) to keep London buses running, but riders only pay £1.1 billion (US $1.8 billion) in fares, creating a 40 percent subsidy at the expense of motorists. The London Underground subway system is more efficient with £1.8 billion (US $3 billion) in fares collected to cover £2.4 billion (US $3.9 billion) in expenses, meaning riders only enjoy a 25 percent discount at the expense of drivers.
Rail for London is the most heavily subsidized operation with 44 percent of the £135 million (US $226 million) operational budget not covered by fares. The Docklands Light Railway requires a 25 percent subsidy to cover the £86 million (US $143 million) budget.
The £8 (US $13) congestion tax imposed on drivers entering the downtown area generates nearly one-tenth of Transport for London’s annual revenue. The £326 million (US $545 million) spent by drivers, however, is eclipsed by the £177 million (US $297 million) spent on operational overhead.
Former London Mayor Ken Livingstone introduced the congestion charge by promising massive reductions in pollution and congestion. Neither have materialized, according to data released by Transport for London last year. Current Mayor Boris Johnson takes a far more skeptical attitude toward the tax and has alreadycanceled Livingstone’s proposal to impose an extra £25 (US $40) tax on certain disfavored sports and family cars.
Transport for London’s highest paid employee earns £570,000 (US $955,000) a year. Forty-nine employees make more than £150,000 (US $250,000) annually.
An excerpt from the annual report’s financial statement is available in a 280k PDF file at the source link below.
Source: 
2009 Annual Report and Statement of Accounts (Transport for London, 8/8/2009)
It’s no different in the states…in NYC, motorists subsidizing mass transit with their tolls has been commonplace for years. But keep one thing in mind when lamenting/gloating that mass transit gets subsidies: If all those transit riders drove to work instead, the congestion, time loss, energy waste, health issues, etc would greatly exceed the value of those subsidies…
Outrageous. Get rid of the mass transit, save motorists billions and rename the place New LA!
It takes £1.8 billion (US $3 billion) to keep London buses running, but riders only pay £1.1 billion (US $1.8 billion) in fares ….
Actually, that’s a pretty good ratio for public transport. No chance of a calculation on what those public transport users do with their extra non-car dependent disposable income? I thought not.
Maybe they spend money on things they’d like to do rather than feeding a vehicle that you already can’t drive in London because the streets are already over-run with vehicles.
Transport for London’s highest paid employee earns £570,000 (US $955,000) a year. Forty-nine employees make more than £150,000 (US $250,000) annually.
TfL makes almost $1m, that is a travesty. That is well over twice as much as the President. 40 making over 250 is probably even worse. If you look at any big-city school chancellor or police chief in the US, they generally make <250 and maybe a bonus of 100k or less.
Highly centralized enterprises (with unions) are hardly going to be efficient, but what’s the alternative?
Have 10-15 million people in southeast England drive SUVs to work every day?
Lower wage levels enough so that millions on public transit have their lives depend on a workforce of illiterate day laborers who sat into a powered vehicle for the first time six months ago?
Just think what these money would do if they were directed at building roads.
BTW, America is not any better at utilization. I heard that if you divide Cash for Clunkers first billion onto the number of vehicles it processed, ratio comes up to something like $16,000, of which only $4500 are paid out and the rest is program’s overhead.
The fact that no XYZ Light Rail Company has jumped in and started to make money serving the needs of commuters somewhere tells us all we need to know here. The proponents of mass transit are always trying to tell us how urgently their pet project is needed. The need us SO urgent that everybody who will NOT use the service is needed to help pay for those who will.
In my city (Indianapolis Indiana) there were lots of trolly and inter-urban rail lines that existed before they were wiped out by the more efficient system that is the automobile. Modern mass transit systems do not seem to make money anywhere without massive subsidies paid by folks who do not use the service.
Those whose actions are not politically correct always subsidize those whose actions are. It’s called democracy, and is currently touted as an end onto itself by those who don’t know better.
“Just think what these money would do if they were directed at building roads.”
In an urban area, where are these roads supposed to go?
Transportation of all types is a money loser, and it always will be. They all require subsidies. We have subsidized roads, subsidized buses and subsidized airports. We end up bailing out airlines and car companies when they get into trouble, and we go to war for oil to make sure that we can feed the thirst of all of them.
Expecting a mass transit system to generate a profit is like expecting the Army or fire department to generate a profit — it’s a misguided, irrelevant exercise. Major cities such as London and New York would be completely dysfunctional without public transit, there is no way for them to be car dependent.
If the fares are too high, urban employees can say goodbye to their workforces, who won’t be able to afford the commute. In the alternative, everyone else can sell hello to inflation as those employers can hike their prices, so that they can pay the wages needed to hire and keep workers who are paying higher prices to commute there. It just isn’t that simple.
What about the subsidy for “free” parking we all pay?
http://www.worldchanging.com/archives/010266.html
I suppose the parking tax effect is less of an issue in the UK, where people do routinely pay serious cash for parking. Still, this is something to be considered if drivers want to get up in arms about their own victimization (which they seem to do an awful lot).
Oh, and what about the air quality penalty everyone pays so the drivers can drive alone in a nice Aston?
I’m not trying to whine – I own a sports car and I use it – but I am trying to cut down on the one-sidedness here. We live in a society – we all subsidize lifestyles we don’t have or agree with to some extent. More at 11.
golden2husky said what I was going to say (first comment). I suspect both London and Manhattan would be total gridlock without their respective subways and busses.
No matter how they save, spend or waste their money, they still drive on the wrong side of the road!
p.s. And for this privledge (which the Swedes wisely gave up long ago), the Brits pay a ridiclous premium to the identical LHD cars sold on the continent.
@Robert.Walker
Once a country has built motorways in urban areas, can it affordably switch from driving on one side of the road to the other?
While rural cloverleafs and straight ramps may be switched in direction without great expense, I suspect that asymmetrical urban ramp systems could make switching sides of the road too expensive and disruptive.
No, traffic-handedness cannot cost-effectively be switched for obvious infrastructure-related reasons you describe, but also because doing so would have a significant and substantial negative effect on traffic safety: wrong-hand-drive cars create line-of-sight problems in all kinds of different situations ranging from overtaking and merging to turning from a side street into a main arterial. What made this a non-issue for Sweden in 1967 was that most of their vehicles were wrong- (i.e., left-) hand-drive before Dagen H; once they switched from LH to RH traffic, most of the cars already on the road became correct-hand-drive. Most everyone with a car newer than 1956 and without French-made headlamps had to buy new headlamps that produced a low beam for RH rather than LH traffic, but this was easy and cheap at the time, for most of the cars on Sweden’s roads used inexpensive headlamps, most of them simple round units. The costs of addressing just the headlamp issue today would be staggering.
As for the ridiculous premium Brits pay on cars, it’s less to do with which side the steering wheel’s on than it is to do with automakers’ mumbo-jumbo about market price adjustments. Lots of Brits go to the continent to purchase their cars; E.U. regulations make it illegal for automakers to refuse to sell RHD cars in LHD countries, and impose other restrictions on automakers’ attempts at market control, that let Brits shopping on the continent wind up with RHD cars at a substantial savings to what they’d pay at home.
How many roads, bridges and other automotive support infrastructure was built and maintained with 100% auto use tax related money?
The US’ interstate highway system was built primarily with money from the federal government’s general fund.
But never mind, we only want to talk about the subsidies which support mass transit. Let’s carry on ignoring the subsidies which support our beloved cars. Don’t get me wrong, I’m a car nut and have been since I was a child. But, I don’t have to check logic and reason at the door just because I like cars.
Pat, Dan, John: Thanks for your feedback and comments. Good points all, and previously considered by me.
Having been multiple times to the UK on business, and having even driven there – admittedly not on every km of every road – I was always of the impression tha tconversion would be more an issue of signage (signs, lamps and paint) than replacing roads, ramps and bridges themselves (and of those which are not 1:1, even over time – say 10-20 years – these need replacement anyway).
Agreed, amortization of infrastructure change-over costs takes time and the benefits would not be fully achieved until the rolling stock was attrited (again 10-20 years). So if it were, in a purely logical sense, the right thing to do, then it should have happened years ago. However years ago, GB was THE major producer of RHD cars in the Western Hemisphere.
Therefore, I’ve always rather wondered if the change was never made in the past (say at around the same time as SE) due to reasons other than the physical infrastructure one: 1. for fear of losing the rest of their auto industry (rather the opposite case of that which compelled SE to change), and 2. the British habit of standing on tradition.
(Perhaps, for some other thread, is the discussion of how if it was point 1, then whether in the long term, this kind of economic isolationism helped fuel the decline of the UK local motor industry, and possibly exaccerbated UK industrial non-competitiveness overall. As we have seen in the last few years, some foreign OEM’s are leaving the UK (Peugeot, “Ford”), while others have considered it (Nissan, Honda). This seemingly being mostly due to a) Pound strength, b) expansion and eastward shift of the European market, c) new OEM’s entering and increasing model/brand fragmentation, and d) lower transport costs (think Chunnel et alia).
I imagine there has been a fascinating white paper, with a CBA inside – possibly locked away in the Tower Bridge – and think it would be interesting).
Even in New York City, a transit system as useful and necessary as the subway system needs a subsidy from taxpayers. And in the Washington DC area house prices get a boost from a location near a Metro stop, yet that clean and relatively efficient (from what I’ve seen) system needs a considerable subsidy from taxpayers.
As long as a public transit system is useful and not a boondoggle I’m okay with tax money being spent on it. However, too many of these systems are gold-plated monuments to city administrations, lobbyists, railcar-building and construction companies, that should never have been built. Specifically, the inflexibility of rail systems as opposed to bus systems dooms them to terminal efficiency in most US urban areas.
This RHD discussion has focussed on Britain but you should consider the rest of the RHD world as well. This includes at least Japan, India, Australia, New Zealand and many African nations. It is not cost restrictive to produce cars that can be configured either way. Most of the “world car” maufacturers do it. By this I mean the obvious German, Italian, Korean and Japanese companies.
The reason that Americans think it is difficult is because domestic cars are built in LHD only as GM and Ford have always been big enough to have subsidiaries in RHD countries to produce cars there. e.g Holden Commodore/Pontiac G8
@Spike_in_Irvine:
The reason that Americans think it is difficult is because domestic cars are built in LHD only
Not so. Chrysler, Ford, and GM have all built RHD BUXes and CKDs in North America for many years. Some reasonably recent examples include the ’93-’97 Chrysler Vision (LH) sent to Japan, the ’96 and later Chrysler minivans (rest-of-world units have until very recently been built at Graz, but world minivan production including RHD and LHD BUX is shifting to Windsor, Ontario), the Chevrolet Cadavalier (sold in Japan as the Toyota Cavalier), the ’96-’98 Ford Taurus (offered in Australia as the Taurus Ghia), and Jeep Wranglers and Cherokees. We can go back (much) further and find Chrysler building RHD Darts, Valiants, and bigger passenger cars as well as pickup trucks in North America for export; I don’t have direct knowledge of Ford or GM doing the same but it’d be a safe bet.
No, the reason Americans think it’s difficult is because RHD isn’t the way we do it in America. So obviously it must be wrong, dumb, impractical, difficult, impossible, stupid, etc. Plug in whatever you like: U.S. vs. rest-of-world auto safety regulations, CAFE vs. realistic fuel taxation…it all works the same way: That’s not the way we do it here, so it must be wrong.
As a cyclist and, much less often, a driver, I find it offensive that my money is used to subsidize public transit. I ride my bike; why can’t they either ride, walk, or pay for what they use? Sure, I’m also using the streets, but I’m contributing no more wear than someone walking on the sidewalk, so my property taxes cover that. I also stick to barely-used side streets, so I’m not adversely affecting traffic. Of course, if it can be shown that my cycling is subsidized, I’d gladly pay for it through bicycle licensing if it means an end to other subsidies. If the cost is too high, I’ll use a more efficient mode of transport, live closer to where I need to be, or stay home more often. Each individual would be able to use that information to decide what option is most efficient for his personal situation, saving us all money.
It’s hard to explain why mass transit is so expensive and can’t make a profit. Look, the infrastructure is already in place for the most part, IT can identify areas where riders are more numerous and those that are least used, and if we already have these systems can’t a private company run them better than the government?
A real solution would be to find more ways for people to work at home and not transit in the first place.
It’s hard to explain why mass transit is so expensive and can’t make a profit.
Your own car generates costs and doesn’t produce a profit. Why would you expect a transit system to do any better?
The costs of driving are high, but they are disbursed in a diffuse fashion, which makes it easy for those who dislike transit to ignore them.
If there was one agency that paid for all of the fuel, depreciation, road maintenance, policing, accident investigation, body repair, insurance, EMT and first responders, traffic management, etc., etc., etc., then you’d see very quickly that driving is quite costly. But since the money gets parceled out to numerous parties at various times, it becomes easier to stomach. Then add in the ability of some people to ignore the externalities, such as the time wasted in congestion or pollution, and it becomes even easier to make unequal comparisons.
I would no sooner expect a train to be profitable than I would expect my car to generate a profit. Mobility is a means to an end that facilitates other benefits, but unto itself, it is a cost center.
Pch101,
that’s a somewhat off analogy. Your car generates a profit to its supplier. At least cars used to, and some still do. The one using it, obviously pays something, just as most people would pay for mass transit tickets. The issue with mass transit is that, as opposed to cars, even the supplier loses money. Not that the train ticket itself is not a profitable investment for the passenger.
Of course, the externalities debate is something different altogether. And, as someone pointed out about home prices being higher near DC metro lines, one could expect housing developers to have an interest in providing rail infrastructure to their developments. Which they do, only most of them have figured out they get a better deal by hiring lobbyists than railway workers.
Your car generates a profit to its supplier.
We can presume that the guys who sell railcars and tires and electricity and mops and brooms and Windex to the transit system also make a profit.
The exact same issues apply — the party operating the transit is losing money. In the big picture, transportation costs money. The benefit of transportation comes from what it gives us.
“Just think what these money would do if they were directed at building roads.”
In an urban area, where are these roads supposed to go?
They’re supposed to go where the houses are every 4th block. Removing enough of the rat cages to build a nice 4 lane road would not only help eliminate traffic congestion, it would beautify the urban area AND stimulate new construction elsewhere. For a good example of intelligent urban area design, look at Thousan Oaks, CA.
They’re supposed to go where the houses are every 4th block. Removing enough of the rat cages to build a nice 4 lane road would not only help eliminate traffic congestion, it would beautify the urban area AND stimulate new construction elsewhere…
That was done before…remember a guy named Robert Moses? You know when thousands were made homeless when he built the Cross Bronx Expressway right through a densely populated section of the Bronx…fortunately one man no longer has the ability to influence design that way. One great idea shot down by Moses was light rail that was proposed to parallel the Long Island Expressway. Why? Because he did not like transit, just like he did not like the idea of minorities from the city using “his” beaches, hence the low bridges that were built to prohibit bus travel to Jones Beach.
To this day, countless dollars are wasted yearly because of his biases. I would like to think that we have advanced since then…I guess not everybody has.
That was done before…remember a guy named Robert Moses? You know when thousands were made homeless when he built the Cross Bronx Expressway right through a densely populated section of the Bronx..
Sorry, don’t know road building history of the Bronx. But I was curious about all those “homeless thousands”… So, they all had nice happy homes in the utopian Bronx until the mean bad guy smashed them all with his big D8 cat and left them penniless and living on the streets? Are they still living on the streets? or did they all die off from exposure to “the elements”?
If the fares are too high, urban employees can say goodbye to their workforces, who won’t be able to afford the commute. In the alternative, everyone else can sell hello to inflation as those employers can hike their prices, so that they can pay the wages needed to hire and keep workers who are paying higher prices to commute there. It just isn’t that simple.
Or, option 3, the market reacts to the reality of the high costs associated with extreme density, and labor centers are subsequently relocated. If the costs of mass transit were passed on directly, and in full, to users, the market would adapt, and you would not see many cities with density levels similar to NYC or London. Indeed, the costs, such a commute time and pollution, associated with auto-based cities like LA and Houston frequently lead to people and businesses relocating. It’s not the end of the world.
More generally, the issue with mass transit is that I, as the individual user, have almost zero control over costs. When it comes to taking a car to work, I can spend almost nothing on a homely but reliable used beater, or I can spend 10’s of thousands a year to travel to work in style not unlike that of a Fortune 15 CEO. The choice is mine, and, even at very low wages, there is likely to be an option I can afford.
With mass transit, I pay the average cost, the newish Toyota Camry, if you will, whether I want to spend that much or not. At certain (low) wage levels, I’m better off just staying home and collecting welfare. The solution to this problem, like most in western democracies, is to seize, by means of legal force, the work product of others and use that product to reduce the costs of my preferred means of transportation. It works, but it is by no means the only functional model.
Pch101 : Your own car generates costs and doesn’t produce a profit. Why would you expect a transit system to do any better?
Because my car is a luxury, not a service to others. If my car were a taxi, I’d certainly expect it to be profitable. Currently, my car doesn’t get used enough to be profitable relative to other means of transportation, but there was a time that I did enough highway driving and necessary commuting that it was profitable compared to flying or riding the bus. Of course, much of that was also a luxury that I could not afford if I had to do it any other way. Nor would I have wanted to, as I despise the discomfort and hassle of both flying and riding the bus. I love my car, I love my car stereo, and I love the open road. Likewise, I love the fresh air and exercise I get from riding my bike in the city.
I’ll add that my Nissan Pathfinder was very profitable when I was doing oilfield work!
zaitcev :
August 8th, 2009 at 11:58 am
Just think what these money would do if they were directed at building roads.
———————————————-
Nothing.
$3B isn’t enough to clear even a single block of downtown London (or any other major city).
I agree with John Horner here. The subsidy to roads and cars (C4C, GM bailout) far exceeds that’s given to mass transit and it’s causing more pollution and more congestion.
gossard267 :
August 10th, 2009 at 11:28 am
More generally, the issue with mass transit is that I, as the individual user, have almost zero control over costs. When it comes to taking a car to work, I can spend almost nothing on a homely but reliable used beater, or I can spend 10’s of thousands a year to travel to work in style not unlike that of a Fortune 15 CEO.
———————————————-
Who covers the cost of building and maintaining public roads?
No, you don’t have any control over that. Not any different from a railway, except a railway requires less maintenance.
Pch101:
” We can presume that the guys who sell railcars and tires and electricity and mops and brooms and Windex to the transit system also make a profit.
The exact same issues apply — the party operating the transit is losing money. In the big picture, transportation costs money. The benefit of transportation comes from what it gives us.”
The fact that someone, somewhere along the supply line terminating in a railcar can show a profit, does not imply that provision of transportation by railcar is profitable the same way provision of such by car is.
In the car example, the person given the benefit of transportation, finds this benefit valuable enough so that he is willing to pay the provider of it enough to make it worth vile for the provider to provide the service. In the case of the railcar, this most often seems not to be the case. Whatever ‘profit’ the infrastructure providing transportation benefits by railcar is showing, it is only there due to expropriation of resources from third parties receiving no transportation benefit.
Again, I’m discounting externalities, including road building. Which as some have pointed out, may be much greater that any subsidies rail systems have received or are receiving.
I pay the average cost, the newish Toyota Camry, if you will, whether I want to spend that much or not.
As I noted, what you’re enjoying is the fact that you can punt the externalities to other people and ignore them. The costs are in the system, they’re just not being paid by you.
Because my car is a luxury, not a service to others.
Right, you’re ignoring the externalities, too.
When another car is added to the system, it isn’t free of charge to everyone else. That’s more smog, more law enforcement, more pavement, more collision damage, more time wasted in traffic, more sprawl and all of the other expenses related to driving. The driver ends up being subsidized by others in the system, like it or not.
In the car example, the person given the benefit of transportation, finds this benefit valuable enough so that he is willing to pay the provider of it enough to make it worth vile for the provider to provide the service.
You’re confusing your willingness to pay the cost with the cost itself.
If liver costs $1/lb. and filet mignon costs $5/lb., the filet mignon costs more than the liver. That doesn’t necessarily make you appreciate the taste of liver, but the cost of liver is less, regardless of your opinion of it.
Again, it is really easy to ignore the cost of driving because it is distributed across many things and not presented to you in one tab. Furthermore, you may very well be able a lot of those costs onto others who are kind enough to pay them for you. That contrasts with public transit, which has two primary charges — fares and subsidies.
The externalities associated with driving are substantially higher than they are for transit. That makes it particularly easy to lowball the expense of driving.
In addition, while increased transit usage generally improves its efficiency, increased driving makes it more likely to hit a point of diminishing returns. The most obvious ways to measure those diminishing returns are in the form of gridlock and pollution, although the latter may be easy to ignore with the AC on and the tunes cranked up.
“You’re confusing your willingness to pay the cost with the cost itself.
If liver costs $1/lb. and filet mignon costs $5/lb., the filet mignon costs more than the liver. That doesn’t necessarily make you appreciate the taste of liver, but the cost of liver is less, regardless of your opinion of it.”
??? Now you completely lost me. Look at it formally, as supply and demand curves for transportation:
The higher price a provider can charge per mile, the more miles he will provide. At the same time, the higher the price, the less miles consumers are willing to pay to be transported. At some point, these curves cross (With demand down sloping with rising price, supply up sloping, they’ll inevitably meet somewhere).
Even without overt subsidies, this crossing point between demand for miles driven by car and supply of drivable miles by car, occurs at a fairly high annual number of miles, as observed in the low overt car subsidy world of today.
At the same time, the crossing point between demand for rail miles and supply of rail miles, absent subsidies, does not seem to occur at very many miles driven (or ridden.) If it did, the subsidies would be rather needless. As it is, the only reason you have an intersection at any meaningful number of miles at all, is external subsidies pushing the supply curve, and hence the intersection point with demand, out to higher number of miles provided for any given price. Take the subsidy away, and people would be demanding a lot less rail miles, and at the same time, end up paying a lot more per mile.
You may well be right there are so many subsidies baked into the supply of car miles, that it’s supply curve, in reality, is as distorted by subsidies as the rail one. I honestly don’t know. If so, the difference is merely that rail subsidies are more out in the open, and hence easier to quantify and criticize, while car subsidies are better hidden.
Pch101 : Right, you’re ignoring the externalities, too.
When another car is added to the system, it isn’t free of charge to everyone else. That’s more smog, more law enforcement, more pavement, more collision damage, more time wasted in traffic, more sprawl and all of the other expenses related to driving. The driver ends up being subsidized by others in the system, like it or not.
Smog? Regulate emissions more strictly if it’s a problem that’s primarily attributable to personal automobiles and not industry or heavy transportation. The driver will have to pay the extra expense of the equipment when he buys the car, or be forced into a newer vehicle.
More law enforcement? More tickets.
More pavement? Fuel taxes are supposed to pay for the roads. If they’re not adequate, they should be raised. Do they spend more on roads than is collected in fuel taxes?
More collisions? We pay for that with insurance. Is auto insurance really subsidized?
Time wasted in traffic? If there’s a more efficient way to get around, use it. I use my bike, but not to save time. Driving is the quickest way to get anywhere here.
Sprawl? This is a personal lifestyle choice, not the fault of the automobile (more like the benefit, as I like a large yard and separation from my neighbours). Property owners pay taxes to cover the costs of their homes and properties and people can choose to live in a little apartment closer to downtown if they want to. Do property taxes in suburbs need to be raised too?
Regardless, any costs that can be directly attributable to driving certainly should be charged to the drivers. I just don’t see them.
Quadriga offers intelligent membership as an alternative to car ownership for U.K based residents who reside in London. For instance Quadriga Cars gives you the convenient choice to drive economically around the city in an everyday car that is easy to park and congestion charge registered and parking permit included!
The higher price a provider can charge per mile, the more miles he will provide.
Again, you confuse the consumer’s willingness to pay the price with the actual amount. The point of the liver vs. filet mignon comparison is to illustrate that you’re focusing on will, while I’m focusing on the price tag.
Driving is not cheap, but that is not particularly obvious to most of those who are doing it. And we can see from this thread, they don’t necessarily want to know.
Regulate emissions more strictly if it’s a problem that’s primarily attributable to personal automobiles and not industry or heavy transportation.
Vehicles create pollution because that’s what internal combustion engines do. You can’t pass a law that magically makes pollution disappear.
This is the point of an “externality.” If some kid gets asthma because of your driving, you can afford to be indifferent to the price because the kid is the one who takes it in the shorts, instead of you. The costs are there, but because you can ignore them, you don’t worry about them.
Fuel taxes are supposed to pay for the roads. If they’re not adequate, they should be raised.
Americans are not particularly fond of tax increases. Politically, it’s easier to pull funds from the general fund to help pay for automotive infrastructure and to run deficits than it is to get the revenue directly from the user.
Sprawl? This is a personal lifestyle choice, not the fault of the automobile (more like the benefit, as I like a large yard and separation from my neighbours).
The car obviously makes sprawl possible. Without the car, it wouldn’t exist because people couldn’t physically get to it.
There is a reason why it is a post-war phenomenon and correlates to road construction.
More collisions? We pay for that with insurance. Is auto insurance really subsidized?
Those who don’t have accidents pay more than they would if those who tended to have accidents didn’t drive. No insurance system could function if the costs didn’t burden those who don’t need to make claims.
You also confuse the willingness to pay with the price itself. Driving isn’t particularly cheap, but you happen to like paying for it, especially when you don’t have to account for the costs and when you can impose the externalities onto other people.
One of the problems is that absence of transit or a dramatic increase in the pricing mechanism of transit can make the remaining alternatives worse — remove the transit system or dramatically raise the fares in cities such as New York, Boston or Toronto, and you’ll end up with even more dysfunctional roads and even bigger problems.
We can’t just magically add dozens of lanes and parking or eliminate smog by fiat. We have to deal with the realities of what it takes to facilitate the movement of millions of people and our goods. The car has limitations outside of low density environments, and it makes little sense to ignore them.
Vehicles create pollution because that’s what internal combustion engines do. You can’t pass a law that magically makes pollution disappear.
Disappear? No. But emission laws have drastically reduced tailpipe emissions since the 60’s, and we could do even more if necessary. The buses, trains, and large trucks here don’t abide by anywhere near the same emission laws as my car!
New York actually has the least subsidized mass transit system in the U.S. Passengers pay 68% of the cost there. Would a 50% increase in fares (with a corresponding decrease in taxes) really force users to turn to other transportation options?
Maybe our perspectives are just too different. I’m in Saskatchewan, Canada, in a city of 225k, with the nearest larger city being 350 miles away, where smog is so negligible that it’s legal to remove catalytic converters and is even encouraged by muffler shops when doing exhaust work to improve fuel economy and reduce the chance of future converter failures (and provide them with $30 of precious metals). I’ve never been stuck in a significant traffic jam and the buses drive around almost entirely empty most of the time.
I don’t know what it would take to convince me that subsidization of anything has a positive long-term effect. I think it promotes waste. I do believe in regulation where there’s a clear problem, and I think we all have the same end goal of an efficient and hassle-free lifestyle. I certainly wouldn’t be opposed to a big gas tax increase in order to create funding for better and more efficient roads, with the positive side effect of encouraging the use of more fuel efficient vehicles, less unnecessary driving, and even mass transit, provided that all the money actually goes toward the roads.
Pch101;
at supply and demand equilibrium, the willingness of the marginal consumer to consume equals the price, as it equals the willingness of the marginal supplier to supply. So, miles demanded will equal miles supplied at this specific price.
If willingness to pay exceeded this price, more miles would be demanded, until the two were again in equilibrium. If, instead, the price exceeded willingness to pay, people wouldn’t pay it, forcing suppliers to cut prices until the two again met.
So, at the margin, absent coercion, willingness of the marginal consumer to pay will equal price.