Тег: Khusainov

There are 2 private railway networks in the Bay Area: BART and Caltrain. To transfer from one to the other, you have to buy another ticket. In Europe, however, a different approach is popular: state ownership and a universal ticket, which turns out to be more convenient. So, what happens—did the “free market” suck it dry?

Anonymous question

To start with, of course, I would like to recommend the articles and recordings of speeches by Farid Khusainov – as it happens, I can boast my own “tame” expert on railway topics. He talks extensively and in detail, including the difference in approaches between the American and the continental model of railway organization. But I will approach this from a completely different angle.

Yes, indeed, the state can theoretically make a certain service so profitable for the consumer that any market solutions simply cannot withstand the competition. For example, why shouldn’t the state transport passengers by rail completely for free? After all, it is not absolutely necessary for the state to make a particular service profitable – it will rob profitable private businesses with taxes and invest the money into a loss-making one.
For instance, in Venezuela, gasoline costs pennies due to state subsidies, and many would like to use such a service, but few would want to move to Venezuela for that reason=)

From what I understood from a cursory analysis of the transport situation in the Bay Area, it’s not two transport companies interacting there, but more than two dozen, and so far the market has only decided in favor of a single payment interface, but not a single ticket. It is possible that some intermediary company, having analyzed the sales statistics of all companies, could introduce a single ticket to the market that works for all or most transport companies, and the money from its price would be distributed between the companies in a proportion agreed upon between them. It is possible that such a product would even be successful. But it is also quite likely that it wouldn’t take off.

To summarize, I want to say that the state’s exit from the economy will undoubtedly make people wealthier overall and technological progress faster overall – but in individual sectors that are privileged under interventionism, deterioration is possible when transitioning to a free market. This is the price of eliminating regulatory distortions.