Ideas in Motion

"Ideas in Motion" is a forum for the deliberation and discussion of timely, controversial issues related to all modes of transportation. The editors of Transportation Quarterly invite you to express an opinion, respond to an article in a previous issue, or to debate a current policy issue by writing to "Ideas in Motion". The views expressed in this section do not necessarily represent these of the Eno Transportation Foundation or the Transportation Quarterly editorial staff.

Editor's Note: Since the European settlement of North America, the U.S. transportation network has been successively built to connect ports with their hinterlands, farms with towns, and towns with towns. It then was expanded to provide lower cost transportation with inland canals, even lower cost transportation with railroads, circulation within growing urban centers, and all-weather roads for motor vehicles. The network has progressed to the point where it now includes both air transportation and widespread automobile ownership and use.

A New Transportation Paradigm

by A. Scheffer Lang

Note: Published in Transportation Quarterly, 53:4, Fall 1999, pp14-22. Posted with the permission of the author and Transportation Quarterly, Eno Transportation Foundation Inc., Washington, D.C.

The construction of the Interstate Highway System has been the capstone of America's most recent transportation effort--one designed to accommodate the explosive growth in automobile ownership and use. Now it is possible for almost everyone to go from anywhere to everywhere at a reasonable cost of time and money. Highways do virtually all of the transportation work. But, paradoxically, the success in accommodating the market for highway use has caused that market to outstrip our capability to provide the infrastructure it requires. So, among other problems, highway congestion is becoming pandemic. What, then, will we do next?

It is the thesis of this article that most of the conventional responses to our contemporary transportation problems are doomed to be ineffective. We have a body of both theoretical and empirical research on transportation dating back more than 40 years that tells us so. Thus, it seems that we need a new "paradigm".

What Should We Do Next?

Reemphasize transit, as so many would have us do? In the Fall 1998 issue of Transportation Quarterly, Charles Lave explained in his inimitable way why this is manifestly fruitless[1]. The auto genie is long since out of the bottle, and transit has become just a fleabite on our resulting automobile-created problems. To be sure, the transit systems in older, denser U.S. cities are essential to the way those cities function, but those transit systems are not preventing automobile congestion. If highway congestion is becoming intolerable, then we have to do something about how we use automobiles, not whether we use them.

Promote denser urban land use, so as to reduce demand for the urban trips that increasingly clog our highways? This is one of the key aspirations of the anti-auto activist "vanguard" described at length by James A. Dunn Jr. in his recent book, Driving Forces [2]. Ken Orski's discussion of "smart growth" in a recent issue of Innovation Briefs, and reproduced in this issue of Transportation Quarterly, makes it clear that there is no political will in North America or anywhere else for such a strategy [3].

Doubters might also want to read what Mel Webber said years ago about the lessons to be learned from the construction of the BART system [4]. Get freight movements off the highways and back onto the railroads where many would say "they belong"? Forget it. Paul Roberts's work on the economics of freight transportation makes it clear that is not going to happen [5].

Build more highways? We will do some of that in any case, but Anthony Downs has long since explained why that will not fix the congestion problem, let alone have any effect on the sprawl that so many now deplore[6].

Where Are We Today?

It seems that we do have to do something different, but it also seems that we will not get to a new transportation "paradigm" until we shed the outmoded assumptions that underlie the one we seem stuck in. That is, we need to get rid of the myths and confront the realities.

So, forget the "transportation opened up the country" idea. That was another time when the transportation circumstances were very different from those we confront today,

Forget the "better roads will develop our rural economy" idea. The better roads are already there. Nothing we add to them will make any real difference in levels of economic activity, only in the value of rural land for residential development. The attempt to develop the economy of Appalachia by just investing in roads is only one example of this.

Forget the 'Interstate System is what causes urban sprawl" idea. Even if that were once true, it no longer works that way today. All the evidence suggests that new roads have long since begun to follow urban development - not the other way around.

Forget the "transit is more energy efficient" idea. In the United States that is no longer true on average, nor will it ever be true again so long as we think only in terms of conventional bus and rail transit.[7].

Forget the 'if we only had full-cost pricing of auto use" idea. The automobile is now less expensive than conventional transit, even when all of its external costs are considered, and it is steadily getting cheaper [8].

Forget the "transit can help develop denser, more transportation-efficient land use" idea. That is a nice idea, but it does not work, mostly because no one wants their neighborhood to be any more densely developed than it already is.

Forget the 'better transit can get people out of their cars" idea. Again, see Lave's recitation of the history on this one. And see, too, what John Pucher and Christian Lefevre [9] and Genevieve Giuliano [10] have to say about what is happening in European cities.

Look at the numbers and do the math. The U.S. urban passenger transportation system is at least 97% auto-based in all but the largest and oldest cities. Our urban freight transportation system is 100% truck-based. Our intercity passenger transportation system is 80% auto-based; and our intercity freight transportation system is 80% truck-based [11].

Then, look at the economics. In all but our largest and oldest cities, no conventional transit technology can compete with the modern automobile for any significant share of urban passenger trips. No conventional technology of any kind can compete with trucks for urban freight trips. No conventional ground transportation technology can compete with the automobile for any significant share of the intercity passenger trips now being made on the ground. Finally, no conventional freight transportation technologies can compete for more than a fraction of the intercity business now being carried in trucks.

What Are We Doing about Our Problems?

We seem to be clinging to the idea that we can solve our highway problems by throwing public money at conventional transportation alternatives, hoping that will somehow get automobiles and trucks off the road. We're clinging, too, to the idea that somehow we can change the trajectory of urban and rural development by stuffmg the highway genie back into the bottle. Look at the numbers. Look at the economics. (Also, look at the politics.) Then forget it.

We are also tinkering endlessly with our national program for financing a system of high-capacity highways designed to accommodate the explosive growth in highway use following World War II, a system that has now been created. Part of that tinkering involves the diversion of federal gas taxes (since they are so painlessly collected) into other forms of transportation on the mistaken assumption that they will substitute in some meaningful way for cars and trucks. Look at the numbers. Look at the economics. Then forget it.

All of this seems rank foolishness. We are in a different world than we were 40 years ago, and we have different tasks ahead of us. Alan Pisarski, in his 1999 distinguished Transportation Research Board lecture, suggested that the Transportation Equity Act for the 21st Century (TEA-21) is "the last hurrah of a bankrupt program [12]. If there is a role for the federal government in transportation, it is certainly different than it was 40 years ago. The same can be said for state and local government. Surely the time has come for both our policies and programs to move on.

Consider the 30 years of federal investments in intercity rail passenger service. Anyone who believes that Amtrak will somehow turn that business around has not looked at the numbers. In the Winter 1999 issue of Transportation Quarterly, R. R. Resor states, "Nothing in the trends of the last 20 years suggests that Amtrak may expect major changes in patronage or revenues [13]. Anyone who believes a lot of "high-speed" rail systems are just around the corner, moreover, should note the recent decision in Florida to cancel the long-running public-private partnership that was expected to produce the first in a wave of high-speed rail investments. We knew 30 years ago that railroads and other high-speed intercity systems would make little difference in a country that already had superb air and highway systems." We still know it.

Consider, too, our heroic federal investments in conventional urban transit, all made in the vain hope that they would reduce highway congestion, revitalize central cities, and mitigate sprawl. We have clearly been pushing on a rope. It turns out that conventional transit is not a substitute for the automobile, if we did not know that 40 years ago when the federal government started to get into the urban transit business, the more astute observers like Meyer, Kain, and Wohl told us what was coming [16]. Now we know it for sure.

While we have been busy trying to sweep back the tide of personal transportation in our cities with some sort of federal broom, moreover, where is the new urban technology that we really need? Few transportation professionals even remember the brilliant work on new technology done by Jack Irving and his colleagues at the Aerospace Corporation [17]. The federal bureaucracy provided the initial leadership for that work; but politics, which is to say, lobbying by conventional transit interests, killed it in the 1970s and has kept it from reemerging ever since. All the federal bureaucracy seems capable of doing these days is propping up the technological and institutional status quo with lots of taxpayer money, and pandering to the politicians who want to buy votes for themselves with 'demonstration" projects.

In his brilliant new work on government and politics, John Brandl of the University of Minnesota explains why public services provided by government bureaus will be neither efficient nor innovative in the long run [18]. He notes that we need to find ways to ensure that there is competition In the market for public services and how we can use the instrumentality of "mediating communities" to do the public's work where creating markets is problematic. When you finish reading Brandl's book, you have to conclude that much of our present transportation policy is hopelessly inappropriate.

What about a New Paradigm?

What, then, might a new transportation paradigm look like? Let's start with some basics:

These "basics" suggest a dramatically reduced role for the central government and probably for the states as well. They also argue that wherever possible we should use the market rather than government direction to get us where we want to go. Come to think of it, centralized planning and programming did not work well in the U.S.S.R. Why do we expect they would here?

The transportation problems we confront are not simple, yet we still covet simplistic solutions. It used to seem as though there were such solutions: build more urban freeways, "modernize" our transit systems, and build 'high-speed ground transportation systems" that would obviate the need for more and more highways. Now we know better. Look at our experience. Look at the numbers and at the economics. Then, forget those simple solutions.

We need to stop trying to figure out problems that in their detail are too complicated to submit to any sort of centralized direction, let alone to simple solutions. We need to figure out how to create markets that can work and then let those markets sort out the problems.

For example, we need to let the market work on the urban public transportation problems. Instead of giving more and more public money to bureaucracies that earn their living planning and operating bus systems built for the auto-lean world of the 1950s, we should give public money directly to those who really need public transportation. Then we should let them buy the transportation they think they need, rather than the transportation the planners think they ought to use. The monopoly of our publicly owned bus companies has become a cruel joke on most of our transit dependent populations, many of whose trips now have to be made in taxicabs that they cannot really afford.

Then, let those bus commuters who have two or three cars in their garage and now pay perhaps 25% of the cost of their daily bus trip downtown hire the transportation service that suits their needs. If they do not want to pay for commercially provided service, let them drive their car the way most of their co-workers do. If there is not enough parking, let the employees, the employers, and the city worry about that. If there is too much congestion on the highway (which there will ultimately be in any case), then address that problem with busways or other priority schemes, or, better yet, with road pricing.

Centrally planned and operated bus systems are losing market share all over the world. If those systems competed in a real market, they would either perform better or go out of business. Beyond that, these systems are a cruel joke on the taxpayer who thinks they are helping to eliminate both traffic congestion and air pollution--not to say, urban sprawl. In the Twin Cities, for instance, buses--at great public expense, carry a little more than 2% of the trips in a region where daily vehicle miles traveled are growing by about that much each year. The buses have done nothing noticeable to slow that growth, nor is it reasonable to think that they can do so.

So, we should phase out government-provided, taxpayer-subsidized transit service and allow free entry into the public transportation business, including the taxi business [20]. In short order we would begin to see a new and better transportation world in our cities [21].

To be sure, Congress and the federal bureaucracy are reluctant to relinquish the political and occupational perquisites afforded by the present federal programs that subsidize urban transit. Conventional transit interests, both public and private, are also unlikely to step voluntarily off the federal, state, and local gravy trains they are on today. All of those good folks believe in market capitalism, of course, certainly not in state socialism--but seemingly only so long as it does not threaten their present prerogatives or their personal pocketbook, The same can be said as well for most local politicians whose long-cherished dreams and oft-stated claims for conventional transit--funded with tax money that someone else collects--would surely be at risk [22].

When one looks at the interests of the citizenry rather than those of the politicians and the bureaucrats, three words sum up what we ought to be doing: devolution, deregulation, and marketization. The name of the game is to empower the people who use the transportation system to make the decisions. Market capitalism works just because it puts decisions in the hands of those who have the most detailed information about what it makes most sense to do--the customer for the goods or services being consumed. That is, market capitalism decentralizes decision-making. Beyond that, properly regulated markets put decisions in the hands of those for whom the service is intended, rather than in the hands of those with some unrelated agenda.

With these principles and this example of urban public transportation in mind, we can go on to suggest what might best be done with the rest of our transportation policies.

Directions for National Transportation Policy

What about the steadily growing highway congestion that threatens to turn our urban expressways into parking lots? Dare I say--make a market? Put the decisions in the hands of those who use the roads. Because it seems no longer feasible in our steadily enlarging urban regions to "build our way out of congestion," we are left with no practicable choice except to set up a system of road pricing that will allocate whatever highway capacity is available. The allocation of that capacity would then be in the hands of those best suited to make such decisions, the users.

Devolution, Deregulation, and Marketization

In any case, dedicated gas taxes are beginning to look like the wrong way to finance roads. So, in the long run, we either pay for roads out of the general fund, or we find a new way to raise the money that the roads require. "Road pricing" seems the logical choice. The real challenge will be to set up a system that channels the funds so collected into the most effective program of capacity improvement and infrastructure maintenance and to take that day-to-day responsibility out of the hands of government planners and politicians. It is not yet clear how to do that [23].

One thing does seem clear--we should not use that money to finance other forms of transportation the way we have under the Intermodal Surface Transportation Efficiency Act and now TEA-21. Those expenditures should stand on their own feet and not be subsidized off-budget by a tax on some passing price-inelastic market. That injunction is scarcely a new idea, but nothing could be more important to the development of rational transportation policies [24].

We should price the use of roads when and where we use them, and we should get rid of both trust funds and dedicated gas taxes.

As for pollution, we should put the price of pollutants in the road price, differentially pricing on the basis of the type of car and engine being used. That add-on price would provide the incentive for drivers to move to cleaner vehicles and automobile manufacturers to build them. The pricing system could also be structured to provide an incentive for both drivers and automobile manufacturers to move away from fossil fuel engines to ones that use renewable forms of energy. All of this is marketization.

Then we need to create a welcoming market for new urban transportation services and technology. Just getting the federal government and their money out of the urban transportation business would do a lot. No politician wants to invest local tax money in new urban systems if they can get 'free" money from Washington to keep on doing the same old things [25]. Deregulation is also critical to meaningful innovation. We have no innovation in urban public transportation services today, because it is against the law. Bus and taxi systems have legally sanctioned monopolies. How is that for welcoming someone who has a new idea?

The objectives of the Interstate System were simply stated: connect all of the cities in the continental United States that had a population of 50,000 or more. Today, it is not so simple to say what we should do with our highways. Not even state and city governments are able to answer that question, let alone the federal government. What then? Leave it to the market. If there is no market, or if the market is imperfect, then create or fix the market. But leave the decisions to the market. If that means putting operations or even the construction of infrastructure in private hands, then do it.

We should get the federal government out of the highway infrastructure business altogether. They have done their job, and the next set of refinements to our highway system is too complicated to sort out in Washington. We should get the federal government out of the inland waterway business, too. Let the folks who use the waterways and the folks who want the waterways to keep their rail rates down and land values up pay the cost of maintaining whatever waterways it seems economic to maintain. Then, get the federal government out of the urban transportation business. We know now they never should have been in it to begin with. And get the federal government out of the airport business. Every local government knows now how important air senice is to their economy. Let them make airport investment and operating decisions using their own money instead of someone else's. They will make better decisions.

We should get the federal government out of transportation infrastructure programs altogether.

Some would argue that even if we got the federal government out of the infrastructure business, they should still be in the transportation research and development business. Wrong. You cannot effectively research problems that you do not have. The spotty record rung up by most of the direct research efforts of federal agencies (e.g., maglev technology) seems proof enough of that. To the extent that the feds get involved in research henceforth, it should be through "mediating communities" of professionals, not with their own labs or staff. If there are projects too big for one state or one company to take on, consortia are not a new idea. We already know how to create them.

Finally, the time has come to deregulate the rest of the transportation system. Deregulation of intercity commercial air transportation has technology) that. To the transformed that industry, It has brought some new problems, none insolvable, but the resulting improvements in efficiency and passenger choice have been dramatic.

Deregulation of the intercity freight transportation industry has also produced dramatic improvements, Overall, logistics costs have declined from more than 16% to 10% of gross domestic product in less than 20 years [26], in no small part due to the deregulation of air, highway, and rail freight transportation [27].

"Marketization" is a simple concept with enormous power over the complex problems our fast-changing economy throws at us, an economy that changes so fast just because it is largely market-driven. Let the market sort it out. There is no longer good reason to reserve so many of our transportation decisions to governments instead of letting the market sort them out. The time has come to "get with the program." We have already done some of what needs doing, but there is a lot more left to do.


1. Charles Lave. "25 Years of U.S. Energy Policy Successes, Failures and Some General Lessons for Public Policy" Transportation Quarterly ,52: 4 (Fall 1998).

2. James A. Dunn, Jr., Driving Forces: the Automobile, Its Enemies and the Politics of Mobility. Washington, D.C.: Brookings Institution press, 1998.

3. C. Kenneth Orski. "The Politics of Smart Growth." Innovation Briefs 10: 2 (March/April 1999).

4. Melvin M. Webber. "The BART Experience-What Have We Learned?" The Public Interest, 45, (Fall 1976).

5. Paul O. Roberts, Jr.. "Planning for the Future of the U.S. Freight Transportation Industry, Transportation Research News, Anniversary Issue, January 1996).

6. Anthony Downs. Stuck in Traffic. Washington, DC: Brookings Institution Press, 1992. See especially p. 29.

7. Sharon Sarmiento, "Autos Save Energy." Access, no. 8 (Spring 1996).

8. See the work of Mark Delucchi and his colleagues at the University of California at Davis, as well as the earlier work of P. Miller and J. Moffat for the Natural Resources Defense Council.

9. John Pucher and Christian Lefevre. The Urban Transport Crisis in Europe and North America. London: MacMillan Press. 1996.

10. Genevieve Giuliano as cited in Innovation Briefs 10: 2 (March/April 1999).

11. Transportation in America, 1998. Eno Transportation Foundation. Inc.. Washington. DC: 1998.

12.Alan E. Pisarski. "Transportation Planning, Policy and Data: Inextricable Linkages". Lecture delivered at the 1999 annual meeting of the Transportation Research Board.

13. See R. R. Resor, "Should Amtrak Survive as a National Rail System?" Transportation Quarterly, 53:1 (Winter 1999).

14. The work of the Northeast Corridor Transportation Planning Study done in the Office of High-Speed Ground Transportation at the Departments of Commerce and Transportation in the 1960s told us so.

15. John R. Meyer, John F. Kain and Martin Wohl. The Urban Transportation Problem, Cambridge. MA: Harvard University Press, 1965.

16. See, for example, Jonathan E. D. Richmond. New Rail Transit Investments-A Review. Cambridge. MA: John F. Kennedy School, Harvard University. June 1998.

17. See J. H. Irving, H. Bernstein, C. L. Olson, and J. Buyan, Fundamentals of Personal Rapid Transit. Lexington, MA: D. C. Heath. 1978.

18. John E. Brandl. Money and Good Intentions Are Not Enough Washington. DC: Brookings Institution Press, 1998.

19. For more discussion on this, see Brandl, Money and Good Intentions Are Not Enough.

20. This idea has a long and respectable history. See, for example. Meyer, Kain, and Wohl. The Urban Transportation Problem , Jose Gomez-lbanez and John R. Meyer, Going Private: The International Experience with Privatization (Brookings Institution Press, 1993); and Robert Cevero, Paratransit in America (Praeger, 1997). See also Brandl, Money and Good Intentions

21. Many would take these proposals as an attack on the well-paying jobs now enjoyed by unionized public transit employees. Unregulated paratransit services would probably not pay their employees as well as we pay today's unionized employees. While the value of these union jobs should not be denied, it has to be weighted against (1) the unsatisfactory service we now provide for our transit-dependent populations, and (2) the unwarranted public subsidies we now give the above-average income commuters who use so much of the existing transit service.

22. Again see Brandl, Money and Good Intentions Are Not Enough

23. See Gomez-Ibanez, and Meyer. Going Private. See also Reza Navai, "Transportation Financing: A Critical Review of Transportation Pricing." Transportation Quarterly, 21:1.

24. See John F. Kain, "The Urban Transportation Problem: A Reexamination and Update." in Jose Gomez-Ibanez, William B. Tye and Ciifford Winston, eds., Essays in Transportation Economics and Policy. Washington, DC: Brookings Institution Press, 1999.

25. Again see Brandl, Money and Good Intentions Are Not Enough.

26. Cass Information Systems, 9th Annual State of Logistics Report, " presented at the National Press Club, June 1998.

27. See Clifford Winston, "U.S. Industry Adjustment to Economic Deregulation," Journal of Economic Perspectives, 12:3 (Summer 1998).

A. Scheffer Lang is a senior research fellow in the Center for Transportation Studies at the University of Minnesota. He was professor and head of the Transportation Systems Division of the Department of Civil Engineering at M.I.T. He also served as the first federal railroad administrator in the U.S. Department of Transportation and has served as chair of the executive committee of the Transportation Research Board. His s-mail address is: 12 Crocus Hill, St. Paul, MN 55102


Last modified: 16 December, 1999