The Tragedy of the Train

I had heard that traveling Europe by train is expensive.  There are some ways to lower this cost by booking well in advance (I’d rather be flexible) or by being young (I’m thrilled to not be an awkward teenager.)  So, neither of those two options are in play.

This really hit home in Belgium.  I’d taken the Eurostar from London in a straight shot to Brussels.  I shopped around for the best price and paid just over €110.  I hung out with a group of med students from Manchester who flew in the same day.  The paid €25 to fly in on EasyJet.  No wonder they could afford the Belgian waffles with the extra ice cream.

It’s fascinating but sad to see such differences.  I always wonder what the “true cost” of flying would be if the higher carbon emmissons were priced in.  Business is a game between balancing volume with profit margins as it is.  A teeter totter where lower volume will result in higher prices.  If more people were on the train they’d hopefully be more affordable.  But perhaps the biggest reason is competition and flexibility.  A discount airline can shop for the cheapest airports, usually fringe, cut costs in a variety of ways and manage its variable cost.  I.e., pay by weight baggage.  It seems fair — if you cause more fuel to be burned, you ought to pay more.  I’m fascinated that Air Samoa has put in place a pay-by-your-weight system.  Of course it would not benefit me, or anyone in eyesight  — the Dutch are the tallest people in the world — but it is fair.   Anyway, fixed rail assets are inherently inflexible and don’t seem to be that sophisticated in their pricing schemes.

 

teeter-totter cost volumePhoto credit.

 

It’s really unfortunate that this is the case.  Airport security is a nightmare.  Previously I pitched an update to How to Win Friends and Influence People.  Airports, in my mind, would be the Tenth Level is Dante’s Inferno was re-written.  Truly, just an awful place to be. Granted some of the misery it is caused by international customs which are unavoidable regardless of what method of travel is used.  I had to go through secutiy, x-ray bags and clear customs in London.  I had totally forgotten about this.  Sadness crept in — I had imaged losing my Swiss Army Knife, Leatherman, nail clippers and overpriced bottle of water.  After all, there is no ‘check bags’ on a train.  It turns out they seem to prioritize just real threats.  It was awesome to just breeze through, the way us bomb-free folks ought to.  Customs was a very relaxed too.  Yesterday I was disapointed to read about instances of people being treated poorly at customs in Canada.  That’s the first face you see in a country so it ought to be welcoming and Canada ought to be doing a better job.

 

I am biased however.  I’ve always like the concept of trains and train stations.  The iconic photo of the light coming into NYC’s Grand Central Terminal is such an amazing photo.

grand central

I was excited to get to visit.  My photography however… is not so iconic.

my grand central

Yet, I did find a nearly empty corner which was cool.

IMAG0317

When I left Brussels I checked out the train rates.  My best fare was about €85 for the two hour trip.  The only appealing aspect of this was that I knew where the station was, so there was less adventure in going to find the bus terminal.

In the end, I went with the adventure of finding the bus stop.  I got a fare from Megabus for €12.  It was one extra hour and was in an amazing bus that even had WiFi.  I bought it the day-of too — which should be the cheapest.  The marginal cost of filling the seat is virtually zero for the operator, so they really need to get a body into it.  This is unlike the seemingly economically-illiterate train operators that drive up prizes closer to the departure date.  It is rather bizarre.

The Megabus fare, in context, is unbelievable.  My favorite buses in Argentina and Chile, with the catering and seats that recline to 180 degrees, were about $5 Canadian per hour of travel.  This is about what I paid in Brussels and a stark contrast to the $50 per travel hour of the European trains.

The bus was not catered of course, but it had the next best thing — stopping at a Dutch McDonald’s.  It’s refreshing to see things in the skyline that are actually taller than a freeway McD’s sign.  Welcome to the windy Netherlands.

dutch mcdonalds

The trains are expensive yet still unprofitable.  Poorly run yet scenic.  But there is still a role for them.  I’d like to see the much maligned Alberta high speed rail go through.  It will lose a pile of money — there are only 2.2 M people in the corridor.  I think that it should lose money — set the price at $2 a ride or something nominal.  The value is strictly big-picture.  There is so much duplication of services and infrastructure in the two cities.  Connect them in just over an hour, downtown to downtown, and this changes.  Suddenly you have an integrated economic area.  Two cities of a million people each are consequential.  But a hyphenated city, Edmonton-Calgary suddenly becomes a bigger player than Vancouver.  There are lot of positive ramifications that could stem from this.  Or, it could be an unmitigated disaster.  Regardless, infrastructure is a very valid investment for an oil-rich province.  Much better than things like a flat tax and giving citizens random cheques.  What a stupid, errr I mean unfortunate, way to spend $1.4 billion of the proceeds of a non-renewable resource.  But the political process is very slanted towards immediacy, low taxes and growth in Alberta.  This shows in cutting the University of Alberta’s funding by 7.2% this year.

 

The best description of how that went down is by Petros Kesmu in the Gateway.  When faced with a deficit from an undiversified economy, becoming even less diversified by stifling innovation does not seem prudent.

 

 

petros

 

The tragedy of the trains becomes the tragedy of Alberta.  With so much value provided by the University ($12.3 billion in a study done by to excellent professors at the Alberta School of Business) the cuts are shortsighted.  With so much oil wealth the opposite is prudent — ignore the temporary budget deficit.  They are short-term anyways as they are driven by variable royalties schemes that let firms recoup their investment before paying much for the oil.  In a word, it’s temporary.

 

The goal should be to take a run at the University of Toronto.  Position your public institution as the best university in Canada.  This is all a money game — lure the top talent and build swishy building for them to research in.  I have no illusions that the U of A can surpass Harvard or Oxford, but it could — and should — be in the top 10 in the world.  It could be a mantra.  First we take Toronto, then we take Colombia.  Not quite as catchy as Leonard Cohen’s First We Take Manhattan, but it’s a motto nonetheless.  And is sort of apt — after all my next stop is Berlin.

 

Anything less would just be tragic.

 

 

 

 

 

 

 

 

 

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