Review of the California High Speed Rail Business Plan of November 2011 - Ridership
In November 2011 the California High Speed Rail project provided to the public an updated business plan. The plan provided new estimates of the ridership, which will be described here. For details about the route itself and other background information, please refer to my previous article on California High Speed Rail . For details about the cost of the plan, see here . For details about the phasing of the plan, please see here . For an October update of all the American high speed rail corridors under development, please see here .
Perhaps the most controversial section of the California High Speed Rail Business plan is the section the deals with ridership and revenue. The plan estimates that when the entirety of the initial phase is completed between San Francisco and Los Angeles / Anaheim that between 30 and 44 million passengers will ride the train annually. These numbers mean that of the 900 million annual trips between California regions served by the high speed rail project 3% will be via this train network. This mode share does not seem to be unreasonable. Though commentators have ridiculed projections that ridership numbers will be greater than the number of passengers who currently ride Amtrak in the Northeast Corridor and greater even than the number of passengers who ride existing high speed rail lines in France and Spain, it is important to remember that the plan is estimating ridership when the plan is completed in twenty years, not how much the ridership would be if the project opened today. Even if the project were open today, we would expect more people to ride a California high speed rail line because it would serve a population twice the size of France's high speed lines and four times the size of Spain's high speed lines. In any case, even the most conservative people should admit that the world twenty years from now will be much different from today. Three levels of ridership were estimated based on high, medium, and low scenarios. For each scenario, ridership was estimated based on different assumptions in regards to the following four factors: population growth, trip patterns / types of trips taken, gasoline prices and fuel efficiency, and airfares. All scenarios assume that fares will be approximately equal to airfares to day between the individual regions; for example the average round-trip fare between Los Angeles and San Francisco is assumed to be $162 in FY10 dollars. Each factor will be examined in turn.
Depending on the scenario, the business plan assumes that California will have anywhere between 8 and 17 million people more in 2040 than it did in 2010. This assumption is similar to and in some cases lower than population assumptions put out by other government agencies in the state. For sure, the vast majority of any additional Californians would be expected to settle in either the San Francisco Bay area or the Southern California region. However, given that the rate of population increase in the state has slowed down quite a bit in the past few years due to the economy and increased border security, I am not sure if we will see 50 million Californians in 2040.
Trip Patterns / Types of Trips Taken
Further investigation has shown a large decrease in the number of commute-based trips that will take the train, and an increase in non-work based trips. Since commute-based trips tend to be of a regular nature while non-work based trips are irregular, this change in the nature of trips taken has resulted in a lower ridership estimate than previous reports have quoted.
Gasoline Prices and Fuel Efficiencies
All of the scenarios of the business plan assumed that in 30 years the cost of driving will be similar to today. Under this assumption, any increase in the cost of oil (and therefore gasoline) will be cancelled out by an increase in fuel economy caused by the adoption of ever more efficient hybrid technologies or the introduction of non-fossil fuel based propulsion systems such as electric cars. I believe this assumption is incorrect, as we are seeing ever increasing demand for gasoline from rapidly industrializing developing countries; in fact, the highest gasoline prices ever seen are expected to arrive in the spring of 2012. Recently I reviewed a book that predicts $20 per gallon gasoline in the future . Even if production of hybrid cars ramped up to a level where they represented the majority of cars purchased it will take years for the supply to trickle down to lower income residents. Meanwhile, even if electric car technology was perfected the introduction of a state-wide system of charging stations could potentially cost as much as, if not more than, the high speed rail project. In sum, I believe that the cost of operating a car will rise significantly in the future.
Similarly to gasoline prices, the plan assumes that the cost of airfares between destinations served by the high speed rail project will remain constant. I also disagree with this assumption. It is a given that the cost of oil will rise in the future, and while advances in fuel economy will offset some of the cost airplanes, unlike automobiles, will always need to consume oil-related products. In addition, increasing congestion at area airports will limit the addition of flights, increasing the cost of existing flights. Due to widespread resident antipathy towards the ideas, I expect that any suggestions to add additional runways and relax existing flight curfews will not be adopted.
Of the four factors, two are skewed incorrectly towards lower ridership (gasoline prices and airfares); one seems reasonable in suggesting lower ridership (change in types of trips taken); and one could go either way (population growth). Overall, given how these factors affected the ridership estimate, it seems as though the ridership estimate is too low. Of course, offering a low ridership estimate is a time-honored tradition in transit capital projects to ensure the project is considered a success when actual ridership comes in above estimates.