[grues-dinner]

> In fact, many towns just sprang up around train stations.

And this is how the Japanese system works so well. The trains don't make money, but the massive improvements to land value near stations does and the train companies own that land.

They get to make money, society gets the personal and economic benefits of a functional public transit system.

Passenger trains on their own fundamentally do not make money for the operators in most cases, except perhaps specialty routes like airports: the value is distributed into society, but doesn't all come back as ticket prices. So any system where a train company is just a train company will either need heavy subsidy or will slowly wither away under "efficiency" drives.

What they do have is a huge pile of capital intensive resources that are juicy targets for vampiric extraction and captive markets that are slow to extract themselves when exploited (and slow to come back).

[ant6n]

Long distance (200-800km) passenger rail operators do make money, as long as the infrastructure is at least partially publicly financed.

Which is also true for anything happening on roads.

[grues-dinner]

Well, quite. A fully ticket-funded passenger rail system is a rare, rare thing. There are simply better ways to make money than going solo on building and running a railway and not either diversifying or getting state support.

Yes, it's true for roads, but no-one expects roads to all turn a profit in the way that rail lines have to. Even for place with road use fees for motorways, most people can access the road system for rather less than the cost to construct and maintain it.

Unprofitable roads don't get closed very often.

[throwaway2037]

    > The trains don't make money

This is untrue. From here: https://en.wikipedia.org/wiki/Farebox_recovery_ratio ... look at all the entries in Japan where ratio >= 100%. It is a lot. This one is bonkers to me (JR Central Rail: 245.95%), but easily explained by owning and operating one of the busiest bullet train routes in the world between Tokyo and Osaka.

And, this does not include all of the (profitable) real estate projects these companies use to further increase ridership!

[grues-dinner]

Well, I stand corrected!

However, it may not include the real estate income, but it does include the income from extra ridership created by the real estate being near the station.

[mitthrowaway2]

It's true, the bullet train prints money for JR. But there are also many train companies that are only profitable because of their real estate holdings around the lines, especially smaller private companies like Tokyu.

[throwaway2037]

    > the bullet train prints money for JR

The bullet train in Japan only "prints money" for one JR company: JR Central, thanks to the busiest(?) bullet train route in the world: Tokyo to Osaka. Most other bullet train lines in Japan are break-even or loss making, but supported by the central gov't (for social policy).

    > only profitable because of their real estate holdings around the lines

Again about Tokyu: This is untrue. I could only find stats from 2005, but all train lines in the Tokyo metropolitan area (including Yokohama) have improved farebox recovery ratios in the last 20 years.

Here: https://www.lincolninst.edu/app/uploads/2024/04/2198_1524_LP...

Page 296: Farebox recovery (%), 2005 125.3 (Tokyu Corporation’s entire network)

After the opening of the last Tokyo Metro line (Fukutoshin) -- with direct connection to Tokyu Toyoko line (Shibuya to Yokohama), the farebox recovery is surely much higher. I guess over 150%, but probably closer to 175%. The trains are jammed 8+ hours per day. This means that, excluding real estate development, the Tokyu train lines are profitable by themselves.

    > especially smaller private companies like Tokyu.

About Tokyu: "[S]maller"? Absolutely not. It is surely one of the top 5 largest private rail companies in Japan by revenue/profits. They are huge in the Tokyo area.

EDIT -- Re-org only.