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Comment by JDDunn9 | Hacker News Reader

Mass transportation has always lost money. Most of the original railroads in America went bankrupt. Today, ~90% of the cost of building railroads are subsidized by the government. In Japan, they over-invested in trains and it produced a huge drag on the economy.

Most experts I've heard say the hyperloop would cost far more than the estimated $6 billion. Doing things for the first time means you're likely to go way over-budget. After someone builds a hyperloop though, and works out all the kinks, there will be investors for the 2nd one. It's a case of "the second mouse gets the cheese".

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> Mass transportation has always lost money

Most passenger rail in Japan is private, and profitable, including both capital and operating expenses.

In the years leading up to WWII, and during it, the Japanese government nationalized many rail lines (although many stayed private as well) to form JNR, and JNR proved to be too inefficient, and built up a lot of debt. That then of course lead to the privatization of JNR in the 1980s (which included transferring JNR's debt to the new private JR companies), which was highly successful.

> In Japan, they over-invested in trains and it produced a huge drag on the economy

Japan has invested a lot in rail, but it certainly isn't a "drag on the economy". Indeed, it's arguably a boon to the economy as it's a much more efficient transit system than private vehicles on roads, and given the business model of Japanese railroads (which builds retail and housing around railroad nodes, and builds railroads to support new retail and housing), directly contributes to much more efficient urban organization.

The rail lines in Japan that lose money are rural ones in sparsely populated areas. However these account for a very small proportion of rail usage.

"Pettis likens it to the US railroad boom in late the 1800s. “Most of it was very, very wasteful and the companies eventually went bankrupt. The railroads shifted to new owners who bought at a significant discount. That meant they could lower prices immediately,” he tells Quartz. “That’s painful, but it’s economically very efficient.” That never happened in Japan. In fact, this is why Japan’s GDP appears not to have grown in so long, says Pettis—wasteful government spending in the 1980s meant GDP “was significantly overstated.”"

http://qz.com/94692/abenomics-will-fail-if-japan-doesnt-addr...

Japan has many issues... but its railroads are not one of them. Indeed, note that your article points to the JNR privatization as the model to follow...

As a matter of fact, mass transport is financially viable enough that JR Tokai plans to finance their 9 trillion JPY Chuo Shinkansen maglev line without government money [1].

[1]　http://www.japantimes.co.jp/news/2013/09/30/reference/maglev...

You should check out Mass Transit Railway from HK - code MTR in the HK stock exchange. They make tonnes of money.

Westerners have been monetizing mass transport system incorrectly. You don't make money from fares. You make money from real estate + advertising. The real estate prices around areas with MTR spikes a significant amount.

Real-estate, retail, etc, are important parts of "the model"... but note that many Japanese private railroads do not cross-subsidize, and their rail divisions are profitable on their own. [I do not know about the HK MTR.]

In that sense, the various divisions in this model are more like symbiotic organisms, with each changing the environment in ways that allow the others to be more efficient: convenient rail transit makes nearby retail and real-estate (much) more attractive, and the traffic from popular real-estate and retail increases rail usage (significantly).

The MTR runs metros and other mass transportation system around the world. And most of those are subsidised.

>After someone builds a hyperloop though, and works out all the kinks, there will be investors for the 2nd one. It's a case of "the second mouse gets the cheese".

Isn't this the exact situation patents were intended to prevent?

The hyperloop is open source though. Even if it wasn't, 20 years isn't a huge head start to work out all the bugs and build very many lines given the cost/time to build 1.

So then how did railroads do... ohhh.

How exactly is it open source?

The design is open source, anyone can build it. As opposed to the et3 concept, which requires a 5% royalty if you build it.

What method does the government use to subsidize NS or UP when they decide to build new tracks somewhere? The only thing I could think is eminent domain but I don't believe that's anywhere close to 90% of the cost in most areas that they build in.

All mass transportation is heavily directly subsidized by the government.

"Much is made of the $30 billion spent on Amtrak over the last 30 years, but in that same period the federal government spent $1.89 TRILLION on air and highway modes, according to the New York Times and Washington Post."

http://trainweb.org/moksrail/advocacy/resources/subsidies/tr...

You do realize that Amtrak is not the only railroad in the nation? While mass transit is subsidized, the movement of goods via rail, which is what the focus of our rail system is, tends not to be. Also I don't believe Amtrak has laid any new rail in well, I'm not sure it ever has to be honest.

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