Why the best public transport in the world was NOT developed by private companies.
Is it any coincidence that most of the best public transport systems in the world have been developed by the state and not by private enterprise? The New York subway, the London Underground, Melbourne trams, Paris Metro, French railway network, Japanese bullet trains and anything that moves in Switzerland.
The reason is simple. So many of the benefits from a world class public transport system accrue to those who do not use it. Clean air, less traffic congestion, greater productivity for business, etc. How could a corporation accrue those benefits to their bottom line? They cannot. Therefore the traditional Return on Investment calculation will never stack up. That is why public transport should always be state owned.
posted by TheJollyGreenCapitalist at
8:55 PM
3 Comments:
Similarly, electricity and lotteries should be state owned. By selling them to private corporations with a shareholder expectation of growth you in effect encourage more energy consumption and/or higher energy prices and more gambling.
February 14, 2011 at 1:06 AM
Ridiculous...
I think you'd find that many of these are actually private owned. Japan for example. And Singapore and Hong Kong's subway system - two of the best in the world.
The reason is simple - providing a reliable and timely service means people will use your service, and be profitable to your company. They don't need to accrue those benefits - those benefits are accrued by others, while they affect the companies' bottom line.
Simple...
March 14, 2011 at 9:49 AM
Sorry anonymous, but the rail networks in Japan, Singapore and Hong Kong were developed by the state, not by the private sector. The private sector took them over in the last decade or so. When profit is the only motive the private sector will only expand any public transport where they can be profitable based, primarily, on fares received. The benefits that accrue to the rest of society from improved public transport cannot be monetised to their balance sheet. This then leads to 'unprofitable' lines being closed.
March 27, 2011 at 7:08 PM
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