Public transport can be profitable if policy is based on profitability and service

Submitted by john on Tue, 17/12/2019 - 12:52
cost estimate

This cost estimate for a pilot aerial podcar route to the airport shows an extraordinary 187% profit/year (606/45 = 1,300%). There are 50 similar routes to the example cost estimate, so revenue might top $30B/year for Melbourne.

Public transport will have picked the low-hanging fruit, so the new $11B rail tunnel project will probably make a loss of $8.6B and deliver a low level of service. Compare that to the podcar estimate that is certain to make a profit, so cost nothing, and delivers service that is six times as fast, reliable and lower cost. That is taking aversion to change to the irresponsible extreme.

It is certain that public transport podcars can make a profit, and be so much better quality, but Sovereign risk as demonstrated with the East-West link project cancellation, must be overcome by government guarantee.

Using Adam Smith’s model, after the costs of operation and profit on the capital have been deducted from the profits, the balance falls as rent to the land owner. A further refinement is to agree to profits of 15%, rents of 5%, and require the balance to be reinvested as capital to extend the network to where it is not as profitable, to provide better service for equity, particularly in rural areas, and as incentives, to raise the capital base for both the investor and the renter.

Requirements: To achieve profitability: 80% of traffic must be attracted out of cars; capacity must be one vehicle per second; and sovereign risk must be overcome by government guarantee.

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