OK, Then, How About a Yugo For Everybody? Doing the Math on Public Transit

You've probably heard someone say, in a debate over rail transit, that these systems are so expensive and poorly patronized, it'd be cheaper to give every passenger a free car instead. Humorist P.J. O'Rourke made that claim recently in a Wall Street Journal column. O'Rourke's target: Minneapolis' new $700 million light-rail line, which he said was so extravagant, the city "could have leased a BMW X-5 SUV for (every) commuter at about the same price." But is that right? One reader ran the numbers. 

Saying that he recognized O'Rourke was trying to be funny (although other, more serious writers have made similar claims), Janek Kozlowski suggested taking O'Rourke's offer at face value. Would taxpayers have been better served by giving every one of Minneapolis' 15,500 transit riders a BMW SUV? Well, said Kozlowski. leases for that many BMWs would cost $44 million a year, with leasers paying another $2,800 a year in gas, maintenance and so on. But, of course, that gets you only a car in the driveway. To get to work, Kozlowski said, the displaced commuters would have to drive on a highway. Highways cost about $20.6 million per mile to build, with interchanges averaging $100 million apiece. To replace the Minneapolis rail line, then, figure 12 miles of new freeway and two interchanges, which comes out to $440 million, not including annual maintenance, he said. 

But that's not all. The commuters need a place to park their Bimmers when they get to work. If all 15,500 could park on cheap surface lots, the lots would cost someone (businesses, the city) another $31 million to build. That's bad, but worse is the impact on the city treasury, since parking lots generate a fraction of the tax revenues of a commercial building ($3 a year per square foot vs., conservatively, $50 for office space). Results of turning over nearly 2 million square feet of downtown land to surface parking: The city would lose $91 million a year in revenues.

So how do the two options compare when all the costs are taken into consideration? Assume that the BMWs, freeway and parking lots would last 50 years each (as rail lines do, on average). Assume, too, that you could amortize their capital costs over that period. Then add in the operating costs for the BMWs and maintenance for the freeway and parking lots (and keep in mind that fares provide nearly $10 million of the $13 million it costs to run Minneapolis' rail line each year). Finally figure everything at present-day costs (not including inflation). Ka-ching: Transit costs taxpayers a little more than $17 million a year. And what the Bimmers, highway and parking lots? "Taxpayers would have to dish out $166 million per year," Kozlowski concluded.

Footnote: So who is Janek Kozlowski? He's a military officer and engineer with a master’s in business administration, who managed the engineering for all ground-force logistics for the 2003 invasion of Iraq. Posted 4/15/2005