Where Rail Transit Works, and Why

Published October 1, 2003

From Seattle to Atlanta to Sioux City, federal largesse has generated an intense debate about whether urban rail “works.”

For those who believe the standard should be traffic reduction, the answer is a clear “no.” To the “railigious,” however, it seems sufficient that the new trains operate–their mere moving from station to station is enough.

There is little debate with respect to some systems. There is so much auto-competitive rail service to Manhattan and Chicago’s Loop, for example, that the automobile is a second or even third choice. Never mind that operating and capital costs are far higher than necessary, and that use of competitive solutions would make even more services available. And, of course, there is a dearth of transit service between suburban locations, such that few suburban commuters who own cars use transit.

Profitable Japanese Systems

There are two places in the world where rail’s success is not accompanied by excess costs and is felt throughout the urban area: Tokyo (Tokyo-Yokohama) and Osaka (Osaka-Kobe-Kyoto).

Violating the old transit myth that there are no profitable systems, data from the Union of International Public Transport (the international equivalent of the American Public Transportation Association) indicate both systems earn annual profits of approximately 30 percent over operating and capital expense.

In both urban areas, most service is provided by historic private suburban rail (commuter rail) companies that operate their own lines and share tracks with municipally owned subway systems. In addition, privatized units of Japanese National Railways (JNR) provide a large share of the travel. The municipally owned urban bus, rail, and monorail systems receive small subsidies, sometimes only for capital.

In Tokyo, with 33 million people (1.5 times metropolitan New York), 57 percent of travel is on public transit, with more than 80 percent of travel on the private railways (historic suburban and JNR East). Total travel is approximately 2.5 times total U.S. transit travel.

Smaller Osaka is just as impressive. The area’s 17 million residents (approximately the same number as in metropolitan Los Angeles) use transit for 60 percent of their travel. Total transit travel is 1.3 times that of all transit in the United States combined. Again, more than 80 percent of travel is on the private railroads (historic suburban and JNR West).

By comparison, New York has the nation’s highest transit market share at under 10 percent. Chicago is under 4 percent, Portland and Los Angeles are under 2 percent, and Dallas and Phoenix are below 1 percent.

Costly, Slow Japanese Auto Travel

Why is transit so much more successful in Japan than in the United States? There are a number of factors.

  • Historically, much lower personal income in Japan kept automobile ownership at lower levels, so transit demand is higher.
  • Unlike U.S. and Western European transit systems, profitability makes the transit systems of Japan sustainable. Westerners have yet to learn that massive subsidies are not the path to larger transit market shares.
  • Urban expressways in Japan require heavy tolls–something generally not found either in the United States or Western Europe.
  • The suburban rail systems in Japan also operate thousands of buses (more than 10,000 in Tokyo and 2,500 in Osaka), which circulate through neighborhoods and deliver people to the rail stations.
  • Downtown employment in the Japanese cities is far greater than in the U.S. The Tokyo Yamanote Loop has double the employment of Manhattan, while the Osaka Loop has three times the employment of Chicago’s.
  • The suburban rail systems of Japan were built concurrently with or ahead of the suburban sprawl (both Tokyo and Osaka sprawl extensively), and system upgrades were made to maintain their superior speeds. The dense mesh of service provided by these systems is simply not to be found in the West.

All of these factors have played an important role in the success of Japanese transit. But the principal reason for the success of the Tokyo and Osaka systems is their competitiveness with the automobile.

Average transit speeds in Tokyo and Osaka are 1.5 times that of the automobile. In both places, traffic intensities are well above that of Los Angeles, the worst in the U.S. Neither Japanese urban area has the high-quality roadway system of Los Angeles to handle the demand (though the Japanese roadways do compare well with Atlanta).

Even if the necessary trillions of dollars could be found to superimpose the Japanese transit systems on U.S. urban areas, they would be far less automobile-competitive here than they are in Japan. On average, urban traffic speeds in the U.S. are at least double that of Tokyo and Osaka.

Profit Motive Cushions Falling Market Share

Japan’s third largest metropolitan area, Nagoya, has nearly 10 million people (similar in size to Chicago). Its transit system is similar to those in Tokyo and Osaka–extensive and profitable. Since 1975, public transit’s market share in Nagoya has fallen 45 percent, to approximately 25 percent, comparable to Western European rates.

Smaller market share losses, but losses nonetheless, have been reported in Tokyo (16 percent) and Osaka (19 percent). Still, the large Japanese systems are not likely to experience the hemorrhaging losses that have accompanied the private monopoly systems of the United States, principally because the profit motive makes the Japanese systems inherently sustainable.

The bottom line is that rail can be successful throughout an urban area where the conditions are right, as they are in Tokyo and Osaka. But Phoenix, Portland, Perth, and Paris are neither Tokyo nor Osaka … and they never will be.

Wendell Cox is a senior fellow of The Heartland Institute; a consultant to public and private public policy, planning and transportation organizations; and a visiting professor at a French national university. His email address is [email protected].