Detail of artwork at Soto Station by Nobuho Nagasawa
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Categories: Metro Art
Reasonable Discourse,
So let’s look at the numbers of the HKMTR investor report listed there.
Revenue from Hong Kong transport operations for FY2012 was 14523 while their expense total for 2012 was 7829
14523 / 7829 = 1.855 or 186% farebox recovery ratio, something that any US transit agency would drool over. That is just looking at “revenue from transit operations” alone, meaning, the revenues earned straight from the farebox only.
The rest of the revenues earned by real estate revenues are reported separately.
If you add up all the revenues (farebox + real estate ventures + etc), the sum of all revenues is 35739.
35739 / 7829 = 4.56 or 456% pure profit.
So why is Hong Kong MTR able to make profit just on an astonishing 186% farebox recovery ratio just from the farebox alone (and don’t BS me that because everyone in HK takes mass transit, the vast majority of NYC residents take public transit yet NYMTA barely recovers 50% farebox recovery ratio) plus even more revenue from real estate ventures that when totaled up, makes them earn 456% pure profit over transit operation costs?
You want to look at how profitable private mass transit works all the while keeping fares low for everybody through distance fares, Hong Kong is a great example of it working.
Reasonable Discourse,
“Farebox recovery ratio” is defined as “a passenger transportation system is the fraction of operating expenses which are met by the fares paid by passengers. It is computed by dividing the system’s total fare revenue by its total operating expenses.”
http://en.wikipedia.org/wiki/Farebox_recovery_ratio
Overseas transit agencies being real estate developers has nothing to do with it. Those revenues are separate from the farebox recovery ratio. Farebox recovery ratio only looks at what is recovered from the farebox.
http://www.alexblock.net/blog/?p=3356
“Popular myth holds that MTR is only profitable due to real estate investment, but that is easily dispatched with a quick glance at a financial statement shows operating profits on transit operations (the aforementioned 186% farebox recovery ratio) as well as real state.”
http://www.mtr.com.hk/eng/investrelation/2012frpt_e/E130.pdf
Privatize Metro,
Part of the reason why transit agencies overseas are able to achieve a >100% farebox recovery ratio is due to a unique added-value property tax proposition that essentially asks business and property owners surrounding transit stops to pay for the benefits that transit access has, in part, brought to them.
Such an arrangement would never fly in America, as it would be likely to face hostile political opposition. So a critical part of funding that is available to overseas transit agencies is, in fact, unavailable to US agencies such as Metro.
Get_Real,
Yes, yes, yes, we’ve all heard about the Great American Streetcar scandal. So what?
For all the things that you say, I can easily say this:
Over in Asia you have free enterprise mass transit going on where multiple private mass transit operators compete with each other, fares are low through a fairly priced distance based fare scheme and it works perfectly fine for profit. They expand into real estate endeavors like making train stations into department stores and such they actually make over 100% farebox recovery ratios, able to run on their own without any form of government assistance.
Public mass transit does not work. Private mass transit works. The failure of the Pacific Electric Lines was they were unable figure out how to profiting from mass transit like the Asians did. And that’s why they got bought out by National City Lines.
Let Metro privatize. This time, don’t sell it to GM or automakers (we live in a different world today where a simple Google search can figure out who’s behind what), but sell it to private mass transit operators in Asia who already have a proven track record of operating a world class mass transit system for profit, all the while maintaining fares that are fair for everyone.
And besides, we don’t want people selling food on our lovely transit system! Have you seen the subway in New York? It’s full of rats and foul. It is also much larger, but I think METRO is working on that? Oh that’s right, they are, except NIMBY’s and people who lack foresight don’t want an expanded system. Beverly Hills (w/r/t Purple Line) puts on a show and Santa Monica whines and moans (w/r/t Expo Line). All the while, the Crenshaw/LAX line – which people in the neighborhood (how is this neighborhood different from SM/BH? Hm…) were BEGGING to have constructed – was up against a bureaucratic funding wall. At least things are finally underway. Hopefully the Regional Connector will get an added funding boost in 2016 from a new tax measure (crossing fingers) and be finished before 2019 and maybe the Purple Line could be finished before 2035. One can dream. A day when getting from Pasadena to Santa Monica is effortless. Or from Santa Monica to Downtown. Or from Downtown to UCLA. Or anywhere to anywhere. Without sitting in traffic.
That has to be the most ridiculous argument against public artwork.
And if you will recall, the LA metro system used to be much more expansive and was run by private corporations (Pacific Electric, etc). But remember what happened? Other private corporations (GM, Firestone, etc) put an end to a great source of publicly accessible transit by purchasing all of the rail lines and converting them into bus lines. Except that they never really offered bus service and the corporations which purchased them were really just fronts (funded by GM, Firestone and others) for dismantling the transit (streetcar) system. So there is a great lesson in “free market entrepreneurship”. Buy all the public transit agencies and then shut down public transit! Then people will have to buy your products! How can you not see through this?
A city that is purely functional and considers art and public beautification as secondary… is a city I’d rather not live in.
Not to mention that the fare increase is basically an increase in name only. Free transfers are a good thing.
Yes, let’s spend of millions of tax dollars in using our stations as places for artwork which bring nothing to the Metro revenue stream, all the while banning free market entrepreneurship and not legalizing merchant and retailer activities at these stations which would help create new jobs, bring in rent income to Metro, and additional sales taxes from goods sold.
And this is coming from an agency who wants to raises fares!
Make money first, then add art later when you have the money, not the other way around!