Caltrain and High Speed Rail: what does California need?

Caltrain is a commuter train with service from Gilroy to San Francisco, California.

When I have meetings in San Francisco, I invariably use Caltrain to travel from Silicon Valley to San Francisco and back.  My round-trip fare today from Sunnyvale to San Francisco was $13 plus $3 for parking.  Add $20 for cab fare and my transportation costs were $36.  If I had to do it everyday, I’d probably learn more about bus transportation to cut my daily cost.

As I left the hotel where the event was held, I noticed that valet parking was $15 per hour up to a maximum of $48 per day—no meal or beverage was included with that parking fee. The bell desk informed that their valet parking was a bargain—a nearby hotel charged $65 per day!  I can’t begin to tell you how much better I felt after hearing that!

Caltrain and taxis are a very viable alternative to the hassles and cost of traveling to San Francisco. Yet, Caltrain isn’t succeeding financially—it currently faces a $30 million budget deficit—and is:

o         Cutting variable costs: offer less frequent service during the mid-day and weekends

o         Instituting minor fare increases—increases that usually have a much greater impact on less affluent riders

o         Proposing eliminating service from Gilroy to San Jose and eliminating stops at some 16 stations presently served along the route to save money.  Note: These stations are unattended—ticketing is handled by machine.

These changes are proposed at a time when some experts are predicting gas will rise above $4 per gallon and possibly as high as $5 per gallon by summer of 2011.

Cutting service and eliminating stops is contrary to what is really needed: increases in ridership creating top line revenue growth.

As I rode Caltrain back from the event today, I saw a headline: “California’s High Speed Rail Gets a Boost from V.P. Biden.”  While a huge public works project like high-speed rail would boost jobs in California throughout the construction phase, I wonder how on earth it will be economically viable if we can’t make Caltrain viable today.

The plan has been to provide high-speed rail service the same corridor that Caltrain travels.  Cities are balking at the idea of having this service run through their communities and want the rails put underground.

After living through the “Big Dig” project in Boston—a project to put a freeway underground, I can tell you that what seems simple isn’t.  The original cost estimate for the “Big Dig” was about $3 billion.  When I last heard, that figure had gone over $22 billion (which includes $7 billion interest payments) and took years longer than originally predicted.

The current political climate isn’t to make investments in a “if we build it, they will come” public works project that lacks evidence it will be self-supporting.  Amtrak isn’t self-supporting!  Why would California high-speed rail be self-supporting? Who is demanding this service and why? Why should the public invest in a major infrastructure project like high speed rail if Caltrain isn’t financially viable?

Caltrain: you cannot cost cut your way to prosperity. Caltrain must stimulate top line revenue growth by means other than fare increases, not merely reduce service and the number of stops.  Your current ridership wants this. You have a need for better marketing!

Dave Gardner Gardner & Associates Consulting

© 2011 Gardner & Associates Consulting


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