Monday, February 16, 2015

To Save Money on Building Rail, Spend Money on Marketing Buses

In cities all across the United States, millions of dollars are being spent on new railway projects to supposedly facilitate better, faster public transit. However, most of these same cities already have adequate bus systems to provide consumers with the transportation they need. The problem is that there's often a stigma attached to riding the bus; it's seen by many as a symbol of the lower class and something to be a bit ashamed of. I can definitely see this in the area we live, and perhaps it's because a majority of us have ready  access to a car, or because of convenient new products like Uber, but I don't know many people--child or adult--who ride the bus. 

There's a lesson in economics that can be taken away from this interesting article: the transit agencies described in the article are exhibiting economic inefficiency. They're failing to maximize their output based on their input by attempting to create alternative systems of transit when a viable solution exists in the form of putting more resources into advertising the existing bus systems. In this example, the consumers (commuters) would still be provided with their economic service (transportation to a certain location) if more money was spent on changing the image of buses, and thus the system would be more efficient.

Questions:
How successful do you think advertising would be at encouraging consumers to ride the buses instead of sleek but costly trains? Does this article change your opinion on public transit systems at all? Can you think of any other examples of economic inefficiency that you see in society?

2 comments:

Miranda Brinkley said...

I think you've made a really good point here about not being able to maximize output because of all the different types of substitutions. I, for one, seem to know more individuals that use Uber as a means of transportation if they don't have a car, possibly because the service can take you to an exact location, rather than a general bus stop. However, I'm not sure the rail projects are really stealing all that much business from the bus companies because (this may be totally off) but from my general understanding most of the railways are intended to traverse long distances, such as the high speed rail train from San Francisco to Los Angeles.
I'm not sure how effective advertising would be, because in my opinion, the majority of people already make the choice that's the most economic for them. Generally, if people have their own cars they take them because it's simply more convinient, unless they know ahead of time that parking is going to be difficult to find (ie a baseball game or concert) and thus instead take public transportation to avoid that hassle.

Karen Chow said...

From my own personal experience, I would only take the train when traveling long distances and the bus to get to local places. This could be a factor that the study failed to consider, because I think it would probably show an increased preference for bus transit (compared to the original results), at least for those who do not regularly travel far.
I agree with Miranda that more advertising for bus transit would likely not make too big of an impact on the general population, especially since most people own cars. The promotion of buses would see more success in large cities and the suburbs however, compared to the same techniques used in smaller towns or rural areas. I think marketing its benefits (lesser cost for local routes, more convenient and accessible locations of stops) could definitely influence more individuals travelling locally. The image of a train just implies "fast" compared to a bus, and providing information to the public that it can be a misconception is necessary to increase the number of bus riders. I would support the use of marketing to encourage bus transit; it'd benefit the city and its citizens more economically and environmentally.