[rayiner]

That's the one example people always trot out, and even that one is questionable: https://la.curbed.com/2017/9/20/16340038/los-angeles-streetc.... The streetcar system was already in dire financial straits when those companies bought it.

> But Bianco points out that this plan wouldn’t have been feasible if the streetcar companies National City Lines purchased weren’t already struggling.

> By the 1930s, LA’s streetcars had become wildly unprofitable and were quickly losing riders. In Transport of Delight, Jonathan Richmond points out that the Pacific Electric company managed to turn a profit in only one year between 1913 and the beginning of World War II.

More importantly, much of the country was developed post-1945, and all followed the same car-dependent model. Atlanta isn't a car-dependent city because of conspiracies. It's because it's unpleasant to do physical activity outside for much of the year between the heat, humidity, and bugs.

[drewcoo]

Social benefit and profit are different things. Profit is actually private benefit, usually at society's expense, both in subsidies and in externalized costs.

And a for-profit system that's not pulling in enough money will let its service, sanitation, and safety degrade, causing a downward spiral of profitability and ridership.

[rayiner]

Public benefit and profit are different, but related. For example, say that it costs Ford $100 make an SUV. They sell it for $200. It generates $10 of negative environmental externalities. And someone buys it for $300.

The benefit generated by the car is $300 - $100 - $10. That amount is split between producer profit and consumer surplus. Note, the more value the buyer gets from the car, the bigger the total surplus, and the greater profit the producer can obtain. Profit and benefit aren’t the same thing, but they generally move in the same direction.

Generally when something is unprofitable, it’s because people don’t value it enough compared to what it costs to produce. Externalities can change that somewhat, but typically not by that much.

Externalized costs for vehicles is extremely well studied: https://www.team-bhp.com/forum/attachments/road-safety/18076.... For example, the externalized costs for my Toyota 4Runner are $0.13-0.21 per mile depending on whether you include crash costs or not. That’s at $50 per ton of CO2, which is probably too low. At $100 per ton that goes up to about $0.25/mile. That’s about $10 for the average 40 mile round trip commute. If you raised gas prices enough to fully internalize that cost, that would be like $200/month. Most 4Runner owners would probably just pay that. Some might get a slightly more fuel efficient car, or live a little closer to home. But those externalities aren’t so big that most people would give up the convenience of personal transit to use public transit instead.

[mike00632]

It should be mentioned that suburban road financing is currently in dire straights.