Winners and Losers

I found Elisabeth Rosenthal's recent New York Times article difficult to stomach. The language she uses makes it sound like urban and transportation policy is a zero sum game in which there are drivers and non-drivers. Yes, sometimes policy benefits some and harms others, but it's not always so black and white.

(from John Niedermeyer on Flickr)

It's fairly well established that building and building road and highway infrastructure induces demand and makes life marginally worse for many motorists. But it's counter-intuitive to think that all this spending is bad for the people it purports to benefit, so it's an easy political sell.

A similar point could be made about parking fees and tolls. These are always spun as being anti-motorist, even if they improve efficiency for the people who use them. Nobody wants to pay for something that they could get for free - I get that. Sometimes, though, you just can't get something for nothing.

Ultimately, this comes back to the belief that people subscribe to a single transportation ideology and rarely or never deviates from it. If a local government closes a street and makes it exclusively for pedestrians, that's bad for drivers and great for walkers. But what makes someone a driver or a walker? Does a person who drives most places never walk? Does a person who walks most places never drive?

I often see and hear comments like, "I would walk/bike more if it were safer or easier or more convenient." So it's reasonable to believe there's at least some interest in these things, even among people who literally drive everywhere.

A Landlord's Paradise

In the process of moving from Arlington to DC this past week, I've been able to see the groups of twenty-somethings coming over to look at the house I've been renting for a year. It's also given me the chance to reflect on why the rental market around here can be so frustrating. It's not that rents are high, per se. When it comes to location, you get what you pay for, and I fully appreciate that reality. What kills me is how much leverage landlords have over tenants, and how badly some of them exploit it.

(from freya.gefn on Flickr)

I rented a room in a single family, 4 bedroom, 3 bathroom house along with 3 other twenty-somethings. The location was good, as far as being within walking distance of a Metro station (about .6 miles, depending on which route you took), but the condition of the house itself can best be described as "poor".

The appliances are ancient, the electrical wiring is questionable at best, the garage door never worked quite right, and the house is badly in need of a coat of paint, inside and out. The furnace klunked out in the middle of the winter, as I'm told it has in the past, and the oven died a few months later. The landlord deals with these emergency situations, but doesn't do any other preventative maintenance, or take on any "value added" projects.

We rented the house for $3,500; the landlord is now showing it for $4,000. Potential renters spend an average of 10 minutes looking at the house. They glance around, comment on the size of the bedrooms; but they don't ask hard questions, and maybe that's because they know that there's no point, because if they don't pay $4,000 for this place, somebody else surely will.

What's frustrating about the rental market around here isn't that prices are high, it's that ruthless landlords have little incentive to put any work into their properties. Instead, their financial goal is to bring in as much cash as possible, spend as little of it on the property itself, and eventually dump the house back onto the market to let the new owner clean up the mess.

If our landlord is successful, they'll bring in $48,000 in income on this property next year, virtually none of which will get re-invested into the house. That's what's so hard to swallow.
I've written about Groupon and similar services a few times in the past. I've generally been supportive of them, but my opinion is starting to change. I don't think these services are going to turn out to be outright failures, as some are predicting, but I do think that from the customers' perspective, the best days may be over.

(from wovox on Flickr)

The reason I say this is because I've noticed that the quality of daily deals has taken a dive lately. A lot of them are for "junk services" that I have absolutely no interest in. It also seems like there's been fewer deals for restaurants, and when there are, the deals themselves tend to be worth less. In the past, a lot of $25 for $50 worth of food deals were coming across the wire every morning. Now, $10 for $20 seems to be the more common denomination, and I'm beginning to understand why.

There's a lot of stories starting to surface like this one, which explains how Groupon used excitement and hype to exploit some businesses. The bottom line is that any business that tried Groupon once and got burned is probably never going to do it again. That means that all those "too good to be true" deals probably were, the businesses ate the loss, and customers won't see those sorts of deep discounts anymore.

But that's not the end of the story. Before, the answer to the question "why do businesses use Groupon" could be answered with a hypothetical: "because if it weren't a good deal for them, they wouldn't have done it." In fact, the truth may be exactly the opposite. Rocky Agrawal writes that running a Groupon is akin to taking out a really high interest loan, so a business might run one not because it's making them money, but because it's the only way to temporarily stave off their inevitable failure.

The Groupon model may very well to continue to work for businesses that sell services, like massage parlors and nail salons and yoga studios; but for businesses that sell goods, like retail stores and restaurants, I think the glory days are past.
A few weeks ago I was riding my bike east on M Street NW on way to work, as I do nearly every morning. If you've never been on this road, it's important to establish that, in an attempt to move the maximum number of vehicles in and out of the city as quickly as possible, M Street becomes a six-lane roadway during the morning and evening rush, with traffic signals timed so that motorists can cruise through Georgetown making as few stops as possible.

On this particular morning, I pulled up to the intersection of Wisconsin Avenue NW just as the light was turning red. As I waited, the motorist behind me started honking obnoxiously at me. He wanted to turn right on red, but I was in the way, and he wasn't happy about it.

(from Irish Typepad on Flickr)

I've seen and heard enough anti-bike screeds to know that bicyclists who don't always follow traffic rules usually get placed in the center of the debate. The argument often follows that if bicyclists want to share they road, they need to behave like motorists. And yet, there I was, getting honked at because I wasn't illegally going through the red light on my bike. It was quite perplexing; but needless to say, I didn't budge until the light changed to green.

Back in April I rented a car for a weekend to drive to the Cleveland International Film Fest. It was the first time in a while that I've done a significant amount of driving in a short period of time, and it really reminded me just how stressful of an activity it is. As soon as I got on the road, I could feel myself getting tense and anxious. I felt a sort of anger that I could barely control, and couldn't easily explain either.

The motorist's real enemy isn't simply the bicyclist, it's anyone and anything that gets in the way. It's pedestrians, it's joggers, it's people out walking dogs. And don't forget about buses, taxis stopping to pick up passengers, and of course, other drivers. It's even the police, and it's one of the few contexts when a lot of otherwise law-abiding citizens resent the presence of law enforcement officers.

At the end of the day, bicyclists are easy targets, because a few of them behave badly, and their behavior is easily noticeable. But I do think the real frustration doesn't stem from that behavior itself, but because it's one of the many obstacles that makes driving an activity that isn't especially enjoyable. On the road, motorists probably hate each other more than anything else, but it's hard to articulate that, so someone else needs to be there to take the fall.

Price and Value

Scott McCartney wrote an interesting article in last week's Wall Street Journal about the cost of air travel. Specifically, he notes that Southwest Airlines isn't always the lowest priced carrier on any given route. I think it's a compliment to the marketing folks at Southwest that it's presumed that they always have the lowest fares, but I think it also demonstrates that the concepts of price and value are increasingly becoming disconnected.

(from Ack Ook on Flickr)

I travel somewhat regularly, and I fly on Southwest almost exclusively. I always book early, try to fly on off-peak days, and the fares I find are usually very fair.

McCartney writes that Southwest's rivals sometimes match or even beat their fares. On a dollar for dollar basis, I don't doubt that it's true. Unfortunately, the article barely gets into a discussion of value. Southwest doesn't nickel and dime passengers to check bags, they let you change or cancel a flight without charging a penalty, and they're at least as reliable as any of the other airlines. This is all worth something, but it's not something that you can easily put a price tag on.

It's too bad that some people see price through a narrow lens. A good deal means getting something of value for a low price. Getting something cheap for cheap doesn't necessarily equal a good deal, and the market for air travel is a great example of how price can be deceiving. A lot of airlines have engaged in a race to the bottom by pricing their fares low but offering little value. Fortunately, there are enough people who can see that there's more to it than that.
A few weekends ago I got a change to bike the stretch of abandoned Pennsylvania Turnpike just east of Breezewood. The ride itself wasn't especially scenic, as much of the area is being taken back by nature. The two abandoned tunnels worth seeing, at least once, though I don't know if they're worth revisiting again.

(from tracktwentynine on Flickr)

What's really sobering is the roadway itself, which in many places is crumbling, even though no vehicles have driven on it in decades. People hate road construction because it causes delays and disruptions, but it's foolish to take for granted that road infrastructure will always exist in a usable form. This stuff is expensive to build, and it's expensive to maintain. If we don't, it will crumble right before our eyes.

Hello Washington

A little over a year ago I moved to Arlington, Virginia. My job was in Arlington and I was lucky to find a good house with good people. I appreciated having a relatively short commute to my job without being overly far away from the city. In the past year I've switched jobs, and effectively doubled my commute. When you throw in the fact that I've always wanted to live in the city, you'll understand that it was hard not to grab an opportunity that presented itself. I'll soon be a resident of the ever-changing U Street neighborhood.

(from M.V. Jantzen on Flickr)

I really think that Arlington has done a tremendous job creating walkable, bikeable and livable areas. It's a progressive town where the people and the leadership seem to really understand the value of good urbanism. Yet, at the same time, Arlington doesn't always feel very urban from a design sense; and I think that no matter how well-intentioned Arlington is, it will always feel like retro-fitted suburbia, rather than a city that developed organically.

Pricing Train Fares

Last week Alex commented about the high price of train fares for on the Northeast Corridor, compared to other Amtrak routes, even when accounting for distance. It’s often difficult to understand why things cost what they do, but I think it’s particularly difficult when it comes to train fares.

(from SP8254 - Catching Up on Flickr)

At the end of the day, the price of most goods and services in a market boils down to supply and demand. Even though the Northeast Corridor has a lot more service than other Amtrak routes, so long as the demand for that service outstrips the supply, fares will be higher. The fact that more service exists is one of the drivers of demand, as it makes the service significantly more useful to more people.

But there’s more. Unlike airlines or nonstop bus companies, trains don’t make “nonstop” runs between two markets. There are almost always stops in between, which creates an opportunity cost that must be accounted for.

Consider a hypothetical train traveling from DC to New York. It has 100 seats, and when it leaves DC, every seat has a passenger in it. Half of the passengers are going to New York, 30 are going to Philadelphia, and 20 are getting off in Baltimore. Of course, the people traveling to Baltimore expect to pay less than the people traveling to New York, because the distance they’re covering is a lot shorter. But every person traveling from DC to Baltimore represents one person who can’t travel from DC to New York.

Of course, this is a very simple example. In reality, there will be people who get on and off at different points along the line, and there are a lot more stops between DC and New York than the ones I mentioned. If Amtrak were truly seeking to maximize its revenue, it would price fares such that supply and demand were in check for every city-pair. This might mean that short trips would cost more than longer trips, or that there are quotas so that only a certain number of fares could be purchased between a given city pair – but doing that raises equity questions. Why should someone traveling a longer distance get to pay less? Why wouldn’t people just buy the least expensive ticket and get off the train early?

I can’t say with absolute certainty that this is the exact driver of train fares, and if anyone knows with more certainty, I’m very curious to know.