The 20th century has been ruled by the automobile; the future belongs to urban transit.
Lawrence Solomon
The Next City
September 1, 1995
In 1912, construction workers tunneling through the earth beneath Broadway to build New York City’s first subway beheld an apparition. There, deep under the city streets, lay an underground station, decorated in Victorian finery, a 22-seat subway car, in mint condition, sitting on its tracks. It was no apparition. The entombed station, completed almost a half century earlier, was the creation of Alfred Ely Beach, an inventor whose vision of an underground railway for Manhattan led him to embark on an undercover operation too outlandish for even Ripley to believe: the secret construction of a subway.
By the 1860s, the streets of New York had become so congested and the drivers of the horse-drawn omnibuses so arrogant that the New York Herald observed: “Modern martyrdom may be succinctly defined as riding in a New York omnibus.” Broadway especially teemed, an omnibus passing City Hall every 15 seconds. But various attempts to alleviate the nightmare were immediately blocked by William Marcy (Boss) Tweed, the notorious emperor of Tammany Hall, the corrupt old boy’s network that controlled New York state politics. The omnibus companies didn’t want competition and with Boss Tweed’s help, plans for a subterranean solution were squelched. This despite the success of London’s first underground, a steam-generated subway built in 1863.
Enter Alfred Beach. The creator of the cable railway, the pneumatic tube, and a hydraulic tunneling bore decided to break the omnibus monopoly by going over Boss Tweed’s head to the people. He rented the basement of Devlin’s Clothing store at Broadway and Murray, carted his tunneling device there, and each night, with his son and a corps of construction workers sworn to secrecy, somehow dug out a tunnel 312 feet long under Broadway, from Warren Street to Murray Street, without anyone noticing. On February 26, 1870, $350,000 of his own money later, Beach invited the press and public officials to the clothing store, where, dumbfounded, they gaped at a 120-foot-long waiting room, complete with a flowing water fountain, grand piano, goldfish tank, and fine art gracing the walls, all illuminated by elegant zircon lamps. The gathering then climbed aboard a car whose fittings put contemporary transportation to shame.
The Herald headline proclaimed: “Fashionable Reception Held in the Bowels of the Earth.” The New York Sun reported that “The waiting room is a large and elegantly furnished apartment, cheerful and attractive throughout.” Beach announced that he would extend the subway north five miles to Central Park, but Boss Tweed vowed the subway would go no farther and he made it stick: The state legislature refused to give the subway a go. The glamorous subway, arrived at through a clothing store’s cellar, closed its doors before it ever had a chance to test the marketplace. Beach’s dream of an elegant, entrepreneurial and economical transit system has been buried under the dross of corruption and government regulation for more than a century, but it is not dead. The 20th century has been ruled by the automobile; the future belongs to urban transit.
How the car became king
Sometimes it seems that the automobile manufacturers are trying to drive us crazy. Sedans, station wagons, convertibles and sports cars weren’t enough. Neither were compacts, subcompacts, and hatchbacks. Suddenly minivans appeared out of nowhere, over 20 competing brands vying for less than a tenth of the market.
But the field is becoming more crowded still. Now sports utility vehicles are coming at us. And they’re going upscale, too — Mercedes-Benz, Lincoln, Lexus and Jaguar are among eight luxury automakers producing utility vehicles, and another half dozen may join them.
Bewilderment at the offerings from the purveyors of fine automobiles doesn’t stop once you’ve settled on the vehicle’s make; that’s when the dazzle begins. Here’s a sampling of the goodies and gizmos stuffed over, under and around us in vehicle showrooms today, often as standard fare.
Want safety? Choose dual airbags, halogen headlights, traction control, all-wheel drive, four-wheel anti-lock disc brakes, side-impact protection, even adaptive transmission control that senses downhill driving and slippery roads, handling them like an expert manual driver. To be secure as well as safe, also choose longer and simpler warranties, and engines that last 150,000 kilometres between tune-ups.
Like music? Try an eight-speaker sound system with CD player, or maybe sound systems that provide your choice of listening environment — jazz club, concert hall, cathedral or rock ‘n’ roll settings. Want to finish hearing that song while you’re gathering up the groceries? Buy an accessory power delay that allows the radio to operate for up to 10 minutes after the ignition’s been switched off.
How about security? Cars come with anti-theft alarms, engine-disabling theft deterrents and remote key-fob transmitters that will unlock doors and turn on interior lights before you reach the car.
Sensitive to the weather? You need a seat warmer — just dial the temperature you want. Your passenger to the right needs a separate climate control, and rear passengers need their own heating and air-conditioning vents. You all need charcoal filters to remove pollen, odor and dust. Soon, you’ll need moisture sensors to roll up your windows when you’re home inside, your car’s parked outside, and it’s raining.
Lost your way? Navigation systems, like Oldsmobile’s Guidestar, use global positioning satellites to guide your car to any location programmed into it. A dashboard monitor tracks your progress on a digital map, and a computer voice gives you driver-friendly instructions like “Stay in the left lane till you pass the McDonald’s.” And there are toll-free information and 24-hour roadside assistance numbers.
The list of offerings goes on and on. Side-mounted mirrors tilt down automatically whenever you shift into reverse (the better to see that you’re not about to run over the groceries you forgot to bring in). To reduce squabbles with your spouse, an adaptive memory function “learns” both of your driving styles, and accordingly adjusts seats, mirrors, temperature and those other irksome differences between you. And if you’re really particular, you can get three overhead passenger grab handles, leather seats with up-down and in-out lumbar support, a separately movable shoulder area on the front and rear seat backrests, work gloves in the spare tire compartment to keep hands clean during a change, a parcel net in the trunk, illuminated doors, dual retractable cup or juice-box holders, rear coat hooks that can be expanded to hold a week’s worth of dry cleaning, and a battery-saver system that shuts off forgotten lights.
Not that long ago, options such as power windows and power steering were considered treats, and automatic transmission or air conditioning was considered luxurious. There was a time — in 1914 — that Henry Ford could decide “a customer can have a car painted any color he wants so long as it is black,” and make his decision stick.
Today, interiors and exteriors can come coordinated by designer labels, paints can be custom mixed. Designers care about the feel of window switches, the shape of knobs, the accessibility of cup holders, the opening angle of the glove compartment, the tone and volume of the keyless-entry signal, even the weight of the ignition key. Automakers stop at nothing to try to discern their customers’ wants. They do it partly for love but mostly for money.
It has been this way for the better part of a century. Automakers strive to understand your needs and wants, to pamper, to stroke your ego, to feed your fantasies, to please and to protect, to provide value and extravagance. They have to. If they take their customers for granted, they’ll lose them. About 75 per cent of car customers switch to companies that better figure out what drivers want, whether sensible or silly, and then give it to them. The relentless competition has worked. The market share of the automobile has been climbing steadily over the last century.
Henry Ford, whose any-color-so-long-as-it’s-black Model T dominated the auto industry for 12 years, favored quick-drying black enamel paint because it speeded up his production lines. But his customers had different priorities, which other companies were only too willing to meet. Ford saw red, but kowtowed to the multicolored marketplace.
It didn’t have to work out that way. Had Ford played his cards differently, he might have had the full power of the state behind him, a government-backed monopoly that could force the customer to buy black or not at all. We’d still be driving Model Ts, probably updated every 25 years or so. And many of us would have gotten turned off by the horseless carriages along the way.
But the automobile market wasn’t monopolized, auto use proliferated, and the auto industry has never been more vibrant. The public transit companies were monopolized, however, and they’ve been stumbling ever since, losing customers and market share.
How to stop an industry dead in its tracks
The golden age of the electric transit lasted only a few years. Invented in 1888, trolley systems by 1890 had been ordered by 200 private companies throughout the U.S. In London, 1890 also saw the opening of the world’s first underground electric railway, the first of eight private underground electric railways that soon serviced it. Chicago took the technology above ground with an elevated electric railroad six miles long built for the Chicago World’s Fair of 1893; by 1897, 15 streetcar companies were plying its roads. That year, Boston opened up North America’s first subway, servicing 50 million passengers — five times the first year’s total of London’s electric underground. Glasgow and Budapest already had electric subways, Paris soon would. In the U.S., General Electric was serving 435 electric railway companies running 8,800 trolley cars along 5,000 miles of track. Los Angeles’ 3,000 vehicles provided service on lines radiating out 75 miles from the city’s centre. By 1900, electric trains dominated urban travel in Canada, the U.S. and the U.K. By 1902, a U.S. Street Railway Census showed that investors had poured $2 billion into 22,000 miles of electric railway, carrying five billion passengers a year — seven times the number who rode the steam trains.
Yet the electric railway had its detractors. Some decried the loss of their traditional way of life. Downtown businesses and members of the public feared fires and electrocutions from the hissing overhead trolley lines. Alarmed property owners were convinced the subway tunnels would give way, and their buildings would collapse. But the opposition also resented the colossal wealth amassed by monopoly tycoons, many of whom didn’t shrink from expressing contempt for their customers. William Vanderbilt, when asked by the Chicago Daily News if his railroad would be willing to sustain a loss if the public interest demanded it, replied, “The public be damned!” J.P. Morgan scandalized the nation by stating, “I owe the public nothing.”
Politicians capitalized on public discontent to extract more revenues and commitments from the transit companies. Some, like the Montreal Street Railway Company, paid for half the city’s cost of snow cleaning on its routes plus a share of the fare box receipts. The Toronto Street Railway paid a tax for street paving, and maintained the pavement. Liverpool’s trams paid taxes for the land under the rails. They got off relatively lightly. A Philadelphia trolley line repaved the city’s entire downtown area. In one case, the city took 95 per cent of the fare box. Bribes also became rampant, the cheapest way for private trolley companies to get politicians off their backs.
Politicians also scored points by forcing fares down, and some may have been serving more than the public’s interest. James Couzens, a Detroit mayoralty candidate and passionate advocate of public ownership of transit systems, provoked a riot when he got himself pushed off a streetcar by a frustrated conductor who refused to take his nickel after a fare increase to six cents. Couzens, Henry Ford’s partner and vice-president of the Ford Motor Company, became mayor, and then relentlessly campaigned against the Detroit Urban Railroad until it was forced to sell out. Montreal’s city council resorted to publicity campaigns to shame the Montreal Tramways Company into building unprofitable lines to serve new districts, outside the company’s agreed-on service.
Around the time of the First World War, the Toronto Street Railway, also under pressure to provide unprofitable service, tried to escape the political machinations, and struck a deal with the city’s mayor to sell out for whatever an independent arbitrator thought fair. But city council overruled the deal, knowing it could pick up the railway for less by destroying its value. Although wartime inflation in wages and materials was forcing the Toronto Street Railway’s balance sheet to bleed red ink, although fare increases to cover inflation were being allowed in Vancouver, Winnipeg, Montreal and various U.S. cities, Toronto city council refused to allow fare increases throughout the war and beyond. City council’s strategy succeeded. In 1921, the near-bankrupt company sold out. The city immediately raised fares 50 per cent to bring them into line with those of other jurisdictions.
This once-golden industry was having its goose cooked. And soon there would be no more golden eggs. Electric railways, identified with big-business interests, earned little public sympathy. Turning today’s logic on its head, at the time transit was seen as a private business and the automobile — an individually owned and operated alternative to the hated private rail monopolies — as a public good.
Politicians could dictate terms to the transit companies because transit investments were captive — after sinking fortunes into power plants and other infrastructure, transit operations couldn’t very well move their subway tunnels, tear down their trolley wires, pick up their track and go. But the transit companies could stop playing that game, and did. It would lead to the first great collapse of a North American industry.
By 1905, just two years after Henry Ford started his company and before the auto, which was then viewed as a toy for the rich, was seen as a competitor, the smart money realized that politics would doom the transit industry. Although that year investment would peak, investors who could see the writing on the wall began to flee. By 1910, new capital investment in public transit was down almost 75 per cent, below the level of 1890, when the industry was just gearing up. By 1915, investment had dropped by 95 per cent, and by 1920 the investor panic was in full-force — the industry was disinvesting, letting itself run down. Disinvestment continued unabated for the next generation. Investors never came back.
The automobile had become a formidable competitor. While only one person in 10,000 owned a car at the turn of the century, by 1920 it had become widely accessible and avidly sought: By 1930, there would be one car on the road for every five people (or just about one per family).
Despite the flight of capital, despite the automobile’s phenomenal popularity, demand for public transit kept growing, and as long as systems weren’t too ramshackle, the trains kept rolling. For most passengers, trolleys were a pleasant meeting place as well as a conveyance, where passengers would chat while enjoying the scenery. Through 1900, Sunday had been the heaviest day of patronage; through the 1920s, Saturday. Unlike many of today’s transit systems, which primarily serve rush-hour peaks and little else, the transit business then catered to a varied clientele, selling holiday and excursion fares, serving midday shoppers, providing group travel for outings and commuter services for daily passengers to and from work. London’s subways, catering to all, from aristocrats to common blokes, sold first-class, second-class, and ordinary (third-class) tickets. Utilitarian trolleys carried the mail and other freight, handsome black and silver hearse trolleys carried the dead.
The electric railways had class, too, many being exquisitely appointed. Exteriors were prided on being “lavish in the extreme,” with up to 15 coats of paint producing a high-gloss finish to complement the fancy scrollwork and gilt lettering. Interiors might have window curtains of Russian leather trimmed with silk, solid mahogany door frames, carved seat panels and ceilings depicting landscapes. Stylish streetcars evoked a spirit that sustained them.
Despite the automobile’s inroads, 17 billion passengers still rode subways and streetcars in the late 1920s — an all-time high apart from the Second World War, when public transit use soared with gasoline rationing and civilian vehicle production commandeered for the military. The public wanted both public transit and the private automobile, and had these giants of the road and rail been free to duke it out in a knock-’em-down, drag-’em-out fight, a healthy balance would have resulted.
But the competition between the automobile and the railed vehicles was anything but healthy. While the auto companies paid nothing for the government’s massive roadbuilding program, transit companies not only had to build their own roads but also to pay governments for the privilege. While auto companies had the freedom to price their products to suit the marketplace, transit companies were stuck with regulators who told them how much to charge, where they could travel and how many employees to hire per streetcar (two — a conductor and a motorman).
With these shackles, the industry became demoralized and derelict, and easy prey for the aggressive marketing of the automobile industry, which promoted glamorous coast-to-coast auto races and capitalized on celebrities’ use of the automobile.
“It’s not fair to your children — your wife — or yourself” to ride the trolleys, a Willys-Overland ad in the Ladies’ Home Journal lectured, showing downcast parents and their children boarding a drab, crowded streetcar while on the page opposite a smiling family rode in one of its spanking new open touring cars. Public transit was “wrong,” admonished the ad, they should join “the new order of things” and buy a car.
An industry that once had status slowly became a pariah.
From the New Deal to the Great Society
Despite their uphill battle, most street railway companies hung on, even into the Depression, when commuting plunged, often because they were owned by electricity conglomerates with deep pockets. The U.S. federal government, under a populist new president, Franklin Delano Roosevelt, and his transportation czar, Joseph Eastman, inadvertently put an end to that. Scoffing at Adam Smith’s “invisible hand” that unerringly guided the economy, Eastman, a minister’s son, worshipped “the guiding hand of government control.” New Deal policies soon broke up the electricity conglomerates by forcing them to sell off their transit businesses. Suddenly dozens of streetcar companies glutted the market, virtually all of them in precarious financial straits and highly vulnerable to takeovers.
Even prior to the government creation of this buyer’s market in trains, a group surreptitiously backed by Standard Oil, Firestone Tires, and General Motors, which had by then overtaken Ford as the leading auto manufacturer, was busily buying streetcar franchises. Once bought, the systems were scrapped in favor of GM buses using Firestone tires and fueled by Standard Oil. Among the first was New York’s streetcar network, the world’s largest, which was converted in the space of just 18 months. The $100-million Los Angeles Railway in 1943 was one of the last — 19 of its 25 lines had their tracks torn up, their transmission lines ripped down. By 1949, when the three companies were convicted in Chicago Federal Court of having criminally conspired to replace electric trolleys with gasoline and diesel-fueled buses, in violation of antitrust laws, over 100 systems in 45 U.S. cities had been dismantled.
Buses, which carry fewer people and require more maintenance than electric vehicles, often weren’t up to the job, especially in cities where transit operations had become marginal at best. The difficulty of getting in and out of traffic quickly gave the sluggish diesel an average rush-hour speed of close to 12 miles per hour, or less than the streetcar’s before the turn of the century. The diesel’s noise (30 decibels, or 1,000 times louder than the electric vehicle) and smell (more complaints are registered each year over the diesel exhaust than over any other pollutant) also discouraged passengers. Between 1955 and 1973, over 500 bus companies abandoned operations, leaving many cities with no transportation alternative to the automobile. Remaining companies sputtered along, barely profitable, moving people who, for the most part, had few alternatives.
By 1964, only 61 urban U.S. bus systems with revenues over $1 million each remained. But only 10 were government-operated. Passenger fares still covered 98 cents of every dollar of operating costs plus depreciation, about the same as in 1950. At that point, with concern high over the decimation of America’s inner cities, the architects of the Great Society decided to help out with an infusion of capital from Washington. Replace the aging fleets that were turning off riders, they believed, and customers would flock back.
But a situation that had more or less stabilized by 1965 began to spiral down after Washington’s involvement. The shiny new transit systems, bought with someone else’s money, weren’t proving cheaper to operate. Productivity plummeted, costs soared and private lines started to bail out.
When the federal government in 1975 added operating subsidies to its capital grants, the picture got worse. Transit systems no longer had to scrounge fares from scruffy passengers to survive; fare boxes were in the federal government’s hands, and it was stuffing them with wads of money, making it the systems’ most important customer. Passengers became neglected in record numbers. Easy money also encouraged management and labor inefficiencies along with pay and benefit hikes, especially in larger, transit-dependent cities, where strikes are most dreaded. In all, between 1965 and 1985, the cost of operating a bus (factoring out inflation) nearly doubled. By 1975, riders were covering only 50 cents on the dollar, and by 1985, just 34 cents.
While costs were climbing, service became shoddier: Public transit commuters were spending more time traveling shorter distances, just the opposite of automobile commuters. By 1990, the average car commute of only 10.6 miles was taking roughly 20 minutes, while the average transit commute of 12.6 miles took 50 minutes — an extra hour a day, every day, for the round trip.
Consumer Policy Institute 