Why doesn't the United States have high-speed rail like Europe and Asia?
It's about the economics, not the technology
First, let me state that I am a huge fan of high-speed rail. My first experience with high-speed rail was on Taiwan’s high-speed rail line in 2008 which shortened the time it took to traverse the island from five hours to two. My second was on my honeymoon when my wife and I traversed continental Europe on its clean and efficient high-speed rail network.
It kills me to think that for the amount of money and resources we have spent on the second Iraq war, we could have built the backbone of a nationwide high-speed rail network and subsidized its use for a number of years while it ramped up to optimal capacity. If that is not a lesson in the opportunity cost of war – and why we should take going to war and sending our young men into harm's way very seriously – I don’t know what is.
However, I am also a student of Economics and I am fully aware of the realities that make the economics of high-speed rail far less attractive than they are in Europe and East Asia. These include:
Population density or lack thereof
Our unique model of urban and suburban development
The strength of our property rights
Car culture, or America’s lingering obsession with the automobile
The lasting power of network effects
An existing rail network is geared towards long-haul commercial freight traffic
Last but not least, I am a natural optimist and I believe that America will ultimately figure out how to utilize certain emerging technologies to overcome the obstacles to implementing efficient, environmentally friendly and safe transportation for the masses. I do believe high-speed rail in some form will ultimately be part of this solution.
Complex issues like high-speed rail cannot be solved by looking at anecdotes — we need to look at and analyze more comprehensive data sets. As such I put together a list of all the high-speed railway lines in the world and then added a select group of countries that did not have high-speed rail for comparative purposes. I then appended data across a number of metrics and ordered them from top to bottom in terms of “high speed rail intensity”, my own metric that is simply based on the length of HSR lines per million inhabitants:
My conclusions on the prevalence of high-speed rail systems in Europe and East Asia, and the lack of such systems in the United States today are largely based on this set of data.
Population density
When you fly across the United States, look down on a non-cloudy day and you'll quickly realize how empty and different it is compared to when you fly across most Asian and European countries. And even our denser cities are more “suburban sprawl” than the concentrated type of urban living you see in Asia and Europe. For instance, Dallas (our 4th-largest metropolitan area) has lower population density than Hebei Province and Hebei is not even considered a particularly dense Chinese province. This is probably the largest single factor making the economics of high-speed commuter rail very difficult.
Suburban sprawl vs. Town squares
Most Americans live in suburbs which are dominated by single-family homes sitting on single tracts of land extending for miles (i.e. “suburban sprawl”). This contrasts sharply with the way towns were developed in the pre-automobile era, which is when most European towns and villages first came into existence — these were designed around the primary mode of transportation of the era, a.k.a. “your feet”. One consequence of this is the greater use of mixed-use development strategies where commercial and residential interests are located in close proximity i.e. the traditional European village/town square.
Furthermore, in the U.S., even if you arrive at your destination via train, you still need a car because most cities don’t have convenient metro systems in place that can comfortably ferry people around to the places they need to go.
Property rights
One of the most expensive parts of building new rail lines these days is securing land along a relatively straight path (you can't run trains at high speeds along too sharp a curve). The U.S. has strong property rights which makes securing land exceedingly expensive. Back when it was cheap to secure land, the U.S. had no problem building train tracks across the country.
In China, land is still largely controlled by the State which makes it much easier to secure, although every once in a while, you end up with this:
Car Culture
The automobile is deeply ingrained into the core fabric of American culture. Watch American Graffiti or its modern-day counterpart and you will start to get a sense of why:
Even though this might be changing over time due to concerns about things like carbon footprint and the environment, our transportation future will most likely still revolve around cars. Case in point — our most celebrated entrepreneur at the moment is a guy that runs a car company:
The investment of hundreds of billions of dollars into the Interstate Highway System also reinforces the critical role of the Automobile in American culture. Much of the suburban sprawl-type development discussed above was a direct offshoot of this massive investment.
Unlike the U.S. most other countries are far more willing to place heavy taxes on vehicles in an effort to curb demand. For example, in Singapore car buyers must pay an additional 150% on top of the price of the car in excise and registration duties. In Taiwan, taxes are not as high but still more than doubles the effective price of this beaut:
This all results in car ownership rates that are much higher compared to almost every other major country (as you can see in the data table above). Lower car ownership rates create greater demand for alternative transportation options and makes high-speed rail a much more attractive proposition in those countries.
Network effects
Another important facet of high-speed rail is the value of network effects. It is a far more attractive proposition to build a HSR system that looks more like a web instead of a point-to-point line. This is because webs tend to result in much higher utilization than point-to-point systems. And utilization is the most important determinant behind the economics of high fixed-cost businesses like high-speed rail.
For example, look at the HSR rail map of Europe:
That’s one tangled and messy spider web and is surely one contributor to the more favorable economics behind high-speed rail in Europe.
Now let's look at China:
Again — especially if you factor in the gray lines, many of which are candidates to be upgraded to high-speed rail lines — this is a pretty intricate web of cities, and once again supports the economics of high-speed rail. Now you will notice a few lines (such as the ones extending out across the Silk Road to Urumqi or towards Lhasa) that are more point-to-point in nature. But these lines are probably subsidized to a large extent by the much more highly utilized lines in the Eastern half of the country.
Finally, let’s look at the United States:
Much less web-like, for sure. I can probably count on two hands the amount of demand for a 1,000 mile rail trip from Omaha to Salt Lake City that cannot be served better by existing options. I simply cannot see how many of these proposed routes — especially in the middle of the country — can sustain the minimum economics needed to justify the tens of billions per year necessary upkeep and operating costs let alone the hundreds of billions of dollars needed to build those lines in the first place.
The densest regions of the United States are located along the Eastern Seaboard. Based on this, running a single line from Boston down through New York and onto Washington D.C. makes the most economic sense. Indeed, this is where our limited high-speed lines exist as well as our most highly utilized regular passenger rail lines. However, I believe one of the limiting factors behind the economics of passenger rail in the United States is simply that we cannot take advantage of the network effects conveyed by web-like networks you see in Europe and China.
Commercial freight network
The U.S. rail system today is primarily used for long-haul shipping of bulk goods that are not as time-sensitive. These would be commodities like crude oil, coal, timber etc. Over the years, this system has become very efficient at moving large quantities of goods over long distances very efficiently. Warren Buffett explained his purchase of the remaining stake in the Burlington Northern Santa Fe (BNSF) Railway that he did not already own by citing the fact that these trains could move a ton of goods 470 miles on a single gallon of diesel gasoline.
However, as everyone whose seen these big freight trains lumber by knows, these trains are slow and therefore unsuitable for passenger traffic. What this means is that one of the costs of having an efficient freight railway network is that you cannot have a strong passenger traffic network (absent building a completely separate network of course). This is also one major reason why European's commercial freight service is far less efficient than America’s.
But I’d rather be an optimist
They say economics is the “dismal science”. But I am a natural optimist. And I think one of the great strengths about America is our optimism.
So even though I see many obstacles to high-speed rail — or more broadly, inexpensive, efficient and environmentally friendly mass transportation — today, I also see how improvements in technology and forward progress in other areas can work to reduce many of these obstacles.
Autonomous driving. One of the big issues I highlighted above was how “suburban sprawl” limits the attractiveness of high-speed rail. One of the main reasons for this is that the only way to get people in the suburbs to train stations is by driving. As a result, the typical setup is a massive parking lot sitting next to the train station. You still have not addressed the fundamental issue which is that you still need cars to get around after you pull into the train station.
Autonomous driving can help solve this issue by reducing the need for large parking lots. Smart entrepreneurs will surely figure out a way to build apps that connect train stations to a roving army of autonomous and semi-autonomous cars that can safely and efficiently ferry passengers on and off the trains as well as provide the necessary link to the suburbs. Local residents can drive their car to the train station to commute and then have the car drive itself back home so that it doesn't need to take up a parking space.
Once we reduce the size of parking lots, we also open the door to more mixed-use development around the train station. This will make the area a destination in and of itself and attract residents and businesses that are attracted to that sort of lifestyle. Our suburbs and towns will start to look more like European cities but because of autonomous driving we can still retain all the benefits of having access to the option of individualized transport.
Perhaps autonomous driving is the way we can mitigate the more negative effects (as they relate to other forms of transportation) from our love affair with the automobile. I for one wouldn't mind having both.
Breakthrough technologies. With entrepreneurs like Elon Musk out there, I am confident that one day we will see new technologies that we can scarcely fathom today. These could reduce obstacles such as our strong heritage of property rights (a heritage many of us would like to keep) by creating new places to place our transportation (e.g. up above or down below). Perhaps new tunneling techniques and machinery will arise which allows us to less expensively build underground tunnels in places where it is simply too hard to secure long, continuous tracts of land. In fact, new technologies could very well have nothing to do with traditional rail technology. Perhaps autonomously driven individual transport pods could leverage our existing highway network but be driven together in long dynamically-positioned “trains”.
“Keep on Keepin’ On”. As we continue to become a wealthier and more productive society, we should look forward to someday being so wealthy and productive that we can easily allocate significant resources to solving our transportation issues while maintaining our very high standard of life elsewhere. I often dream about a world where we have finally made certain resources that were scarce in the past — like electricity — virtually unlimited. With the strides that have been made in solar and photovoltaic technology, this does seem within the realm of possibility sometime in the future. In such a future, having access to a virtually limitless pool of resources may completely change the rules of traditional economics.
So even though there are some barriers that might hold us back from implementing these shiny new high-speed rail systems that we see many other places in the developed world, let's also remember that we also hold perhaps the most important card of all — our optimism and ability to invent new technologies to continue pushing our country (and the world) forward.
This was originally published on Quora in February 2016. Also published in Forbes.
Fairly prescient, as we are now on the verge of genuine autonomously driving (Tesla FSD V14.1.3 is incredibly good) and the Boring Company is able to "less expensively build underground tunnels in places where it is simply too hard to secure long, continuous tracts of land" e.g. Vegas, Nashville.