Chapter 17
The Economics of Our Dualmode System

The cost of the guideway system should not be an item in the national budget and should never be added to our taxes, to the deficit, or to the national debt, because it will be a moneymaker, not another expense.  The guideway system should be financed by investors and amortized by automatically charging every vehicle that uses it (and most vehicles and their owners will use it.)  Those who don’t want the guideways won’t have to help pay for them.  If they later change their minds and use the system, they will be paying their share through guideway use fees. 

A national guideway system in the United States, and in many other countries, will make economic sense because there will be a tremendous demand for it use.  Unlike products where companies create consumer demand through advertising, a huge demand for better transportation already exists.  Present automobile users will be the largest guideway customer group; but the fact that the system will also carry transit, freight, and other commercial vehicles will further increase the profitability of the guideways.  And the services to be offered won’t be just a little better than the transportation we have now; they will provide huge improvement that few travelers and shippers will pass up. 

The guideway system will hopefully be designed, built, and operated as a government-monitored private consortium.  The money to build it will probably come from the sale of guideway bonds and stock.  Most of the bond and stockholders will also become paying users of the system. 

The REV vehicles will not belong to the guideway companies, so they won’t be part of the system cost any more than the cost of the cars on our highways is considered part of the cost of the highway system.  Most people, companies, and governments will buy and own their dualmode cars; but some will rent or lease them. 

Bear in mind that the guideways will be universally used, like our highways are.  If we build a light-rail system or a personal rapid transit system it will almost always have to be heavily subsidized because it will have a relatively low use factor.  But a dualmode guideway system, built at comparable costs per mile, will accommodate all of the cars, buses, and freight, and therefore won’t need subsidies.  Quite the opposite, the private and commercial vehicles on the guideways will pay guideway taxes, just as highway vehicles now do through fuel taxes and vehicle taxes. 

Guideway use will sell itself.  Commuters stuck in highway gridlock who see the adjacent guideway traffic flowing at a constant 60 or 200 miles an hour will most likely start using the guideways, and guideway profits will increase.  If one fruit company now shipping its produce by air or truck sees that its competition is shipping by the guideways and their market share is increasing, the guideways will gain still another customer. 

         How the heck should I know?  The best guesstimates at this early date would be extremely broad-brush and probably way off.  But the enormous total cost of the guideway system will be almost a secondary consideration, since it will be operated as a business, rather than a tax burden.  But if you need numbers, my uneducated guess is that the entire national system will cost several trillion dollars.  So what?  Big projects always cost big money.  Like the enormous railroad and the highway systems, the enormous guideway system will be worth its cost many times over. 

       We read of huge and most discouraging dollar-per-mile figures on some current transportation projects.  Understandably these costs, sometimes way over a hundred million dollars per mile, are especially high in dense city areas.  We will certainly have some similar high costs per mile of REV guideway in dense areas.  And likewise, the lower guideway costs in less dense areas will be comparable to the costs of new rail routes and new highways in these low-density areas.  By mass production of the required guideway and electrical/electronic components, maybe some of the rural-area guideways could be built for twenty million dollars per mile or less.  Don’t quote me. 

But much more important than the total cost of the system is the question, “Can it pay for itself?”  The answer is, “Definitely yes.”  The cost of the guideway system will be amortized by a hundred million or more trip fees daily.  Let us assume that shortly after the completion of the guideways, on the average they are operating at only one tenth of their capacity, and assume that the guideway-use fee for passenger cars is ten-cents per mile on both the 60 and the 200 mph guideways.  As I write, the cost of gasoline is over three dollars per gallon and rising rapidly.  If, by some miracle, it is still only three dollars when the guideways are finished (impossible), your regular automobile would have to get 30 mpg in order to match a $0.10 per mile guideway fee.  Ten-cents a mile on the guideways would be a great bargain since the guideway users won’t have to fight traffic and will get to their destinations much sooner and safer, with little wear on their vehicles. 

        At ten-cents per mile and traffic at one-tenth of capacity, the system would have a gross income of $1,700,000 per mile of 60-mph guideway per year, and $5,808,000 per mile of 200-mph guideway per year.  Many years later, when “everyone is using the guideways” and the population has also increased, we might be approaching system capacity in places.  Running at theoretical full capacity the 200-mph guideways would gross fifty-eight million dollars per mile per year.  Not bad.  Picking numbers out of the air, if there were ten thousand miles of 200-mph guideway and ten thousand miles of 60-mph guideway, all operating at an average of half capacity 24-7, and the guideway fee still at ten cents per mile, the gross income of the total system would be three hundred and seventy-five billion dollars per year.  Big business.  I wonder how much AMTRAK is in the red every year? 

For simplicity the above figures assumed that all of the guideway traffic was passenger cars.  But actually buses, freight, and other commercial vehicles will also generate excellent guideway income.  Dick Scherer, systems analyst, wrote, “The guideway system will not only pay for itself but it will make big money because of the combined people and freight usage.”  (Emphasis by Mr. Scherer).  Bus traffic could also be a moneymaker for the guideways, if we choose to subsidize only disadvantaged riders. 

As to operating costs: The electricity to power the guideways will be the largest expense, but the entire system will be far more efficient than internal-combustion-engine cars.  Few people will be required to operate or control the guideway system, since it will all be automatic, but a large number of employees will be required to design it, develop it, build it, maintain it, and to manage the guideway business. 

Earlier we mentioned “Penny-wise but pound-foolish” mistakes.  We must spend whatever it takes to design and build guideways with the capability to do all of the wonderful things that this concept offers.  All of these uses together will make the most economically sound system.  We must build it right the first time.  Tailoring an old saying: Don’t degrade our vast guideway system by half-vast penny pinching. 

Highways are now heavily loaded most of the time, as are the airlines, while railway traffic is now sparse.  The distance between trains on a railroad track is enormous.  The guideways will carry most of the present highway traffic, and a good percentage of both air traffic and rail traffic.  So, within several years after the guideway system is largely finished, its use factor will be high.  Most of the time the guideways will have a great deal of traffic on them, therefore the income per mile of guideway will be high.  However high use factors normally mean high wear rates and high repair costs.  The cost of maintaining our heavily used highways is great (especially in states that allow studded tires).  But with a maglev guideway system there will be no physical contact between cars and guideway, and therefore no physical wear.  There will still be maintenance costs of other kinds, however. 

In thinking about the economics of the system, remember that one 60-mph dualmode guideway lane is equivalent to 10 highway lanes, and a 200-mph guideway lane will carry the traffic of 33 highway lanes.  We will therefore have a system that will be operating at a small percentage of its capacity in its early years.  As the population continues to increase, the traffic will increase with time, and the profitability of the system will continue to increase. 

         Freight and other vehicles should be offered lower guideway rates at night when there is less traffic on the guideways.  Shifting flexible traffic to the off hours will reduce rush-hour guideway traffic, and delay the need for additional guideway lanes.  It will also reduce peak loads on the power grid.  There will be no premium-pay for night guidetainer or cross-country bus drivers because there won’t be any drivers, night or day.  Some travelers, especially business people, may prefer night trips on the guideways because they can sleep on the way.  Since traffic on the guideways never stops or changes speed, there will be nothing to disturb sleepers other than arrival at their destination.  Provisions will doubtless be made for travelers who “have to get up at night.”

The average cost of private true-dualmode REV cars may be comparable to that of present automobiles.  They will need several subsystems not used in current automobiles, but they won’t need gasoline engines, gasoline tanks, cooling systems, exhaust systems, or transmission systems.  (The electric motors for street mode will probably be built directly into the wheels—four-wheel drive the easy way.) 

When a person is ready he/she will buy a dualmode car instead of another conventional automobile.  The motor companies will be delighted to develop and sell us a couple hundred million dualmode cars as soon as it is evident that there will be a guideway system on which to use them.  Getting the guideway system will be difficult because that will involve many politicians, organizations and governmental agencies; but getting the cars will be easy. 

The cost of building dualmode cars will be high initially.  But early users of the guideway will demonstrate its advantages, then the rush will be on and the economies of mass production will bring the cost of dualmode cars way down.  Dualmode use will explode like the use of automobiles exploded in the mid twentieth century, and like the Internet and e-mail have exploded in the last decade.       

At this point I am reminded of a couple of historical bargains: I wonder how many hours worth of Oklahoma oil it took to buy Oklahoma plus the dozen or more other states that developed out of the Louisiana Purchase?  And how long did Alaskan oil need to flow in order to pay for Alaska, “Seward’s Folly”?

Although our dualmode transportation system will be an enormous and super-expensive project, it will be worth many times its cost.  In the long run it will be less costly than the additional freeway lanes that would otherwise be required.  It is going to take a huge project to solve our huge traffic, environmental, and fuel problems: How many people earlier argued that we couldn’t afford to build the streets and huge highway system that we now have?  Our dualmode system will not increase taxes; it will indirectly lower them, since the guideway income will be taxed. 

“Me don’t no nuttin bout ekonomix.”  In case you haven’t noticed, the author is not an economist.  He has tried to avoid saying things here that would expose his ignorance, but he is sure that he has failed miserably.  He happily leaves the financial part of the proposal to others far more knowledgeable in such matters.  But we are talking about simple supply and demand.  Railroads and transit systems, which were once profitable businesses, have gone bankrupt and are on the dole because there is no longer sufficient demand for their types of services.  On the other hand, the automobile business is brisk because the demand for cars is greater than ever in spite of our present traffic problems and fuel costs.  The demand for REV dualmode cars will be enormous because they will be more useful than today’s automobiles, and the automobiles will be motionless for lack of fuel. 

                Next: CHAPTER 18
It Will Never be Built”


Last modified: August 02, 2006