Mass Transit is a Bad, Bad, Bad Idea. Here’s a Good One.

MushroomsThey say that if you do something over and over again and expect a different result, you are insane.  Well, it appears that city planners in the US and across the world are insane.  They keep building mass transit projects, expecting them to be built on budget, have full trains and buses, and not cost too much money, both when built and in operation.  What happens instead every time is that they have half-full trains most of the time, the systems hemorrhage money, and residents wonder why their taxes are so high.  There are many reasons that mass transit never, never works:

  1.  Even when somewhat successful, the systems are only under high use for a few hours a day, yet they need to continue to run routes during off hours, even into the night.
  2. Because people tend to be spread out where they live and where they are going, you rarely get enough people going to the same place to fill the trains or buses and make each ride cost effective.
  3. Because there are never enough riders, those who do ride need to be heavily subsidized, because few people would pay $20 each way for a 10 mile train ticket.
  4. If mass transit ever were successful in filling up the trains and buses, those who say they love mass transit now (because they get the cars nearly to themselves) would be unhappy since they would be crammed into a crowded car or bus with a lot of smelly people.
  5. Once you get into the city, you need transportation around, which is usually very inconvenient if it exists at all.
  6. As San Francisco BART riders have discovered, even if you have a fairly successful system, your whole week can be ruined by a strike by the workers (many of whom are making more than many of the people riding the trains).

So if mass transit is a flop and we can’t ever build enough roads, what is the solution?  The answer is to change the model and make it normal to live very close to where you work, and have where we work located in areas where workers can afford to live near their jobs.

For example, if you look at Washington DC (a very, very busy city with awful traffic) when you’re flying in (or on Google maps), you’ll see that just a few miles outside of the beltway there is just miles and miles of open land.  Because people choose to cluster their businesses all in one area (mainly near the politicians so that they can bribe, I mean lobby them with dinners at steak houses that only exist because of lobbyists buying meals for senators), it causes huge traffic jams, a very high cost of housing, and high prices on everything else.  Because costs are high, companies need to pay their employees more, which hurts their profits.

Now if companies would locate in a less populated area, their workers could find places to live within a few minutes of the office, schools, restaurants, and grocery stores.  Their standard of living would improve, they would be happier workers, and therefore be more productive and more loyal to their employer.  There would be no need for mass transit or for building more roads because traffic would be distributed more evenly.  Workers could even bike to work without worrying about being flattened by a mass transit bus.  Really, you wouldn’t need to move very far outside of metro areas to create much more livable environments for employees – just twenty miles or so.

But what if it is important for a business to be located in a major area so that the CEOs can serve on each others’ boards and meet for lunch (Silicon Valley comes to mind).  Well, given that every computer is now connected to that great big LAN we call the internet, there is no reason most workers couldn’t just stay home and telecommute.  That is what many people want anyway.  As an option to having employees stay home, small regional centeers could also be setup where small groups of employees could work, connected to the mother ship.

What about the issue with telework, where employees spend the day in their pajamas and just watch TV and do house work instead of working?  Employers need to get over this impression.  Some employees will abuse the system, but most are mature people who can handle the freedom.  Plus, you will know who is goofing off by what they produce.  If you give an employee a job and he/she doesn’t finish in a reasonable amount of time, fire him/her.  Employees shouldn’t just assume that all of their employees are goofing off because of a few bad actors.  You have plenty of people who spend the day gossiping in the office or calling pointless meetings to pass the day until quitting time.  Your good employees will work and produce.  You don’t need to be looking over their shoulders.

Now this is not to say that there should be some government mandate on where to locate businesses.  There should not even be a tax incentive for businesses to locate in more rural areas.  Instead, I’m hoping that business owners will realize that the quality of life for their employees is important to their bottom line and just start businesses in more rural locations or move existing businesses there (starting with Silicon Valley).  Maybe companies could even start building homes for workers and giving the down payment as a hiring bonus or a yearly bonus to existing employees.  It is in their best interest to be able to attract the best employees by not forcing them to live in sketchy neighborhoods or commute four hours a day, on mass transit or stuck in traffic.

So what do you think?. Please leave in a comment.

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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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