September 16, 2003

Why can't anybody make any money out of transport?

Patrick Crozier | Transport General

The news that Ford is in big trouble got me thinking. They're not exactly alone in the car sector with Rover and Fiat in rather worse predicaments and with BMW and Porsche facing a worrying future. And the sector generally doesn't make a lot of money, or, at least, so I've heard.

But it's not just cars. Historically, railways made very little money at all. The London Underground was permanently teetering on the brink with Lord Ashfield trying to sell it to the government almost as soon as it had been built. The only exception seems to be the Japanese but even there they have suffered the financial disaster of the Shinkansen. And as for airlines, whatever happened to PanAm, TWA, Braniff, PeopleJet (correct name?), Sabena, Swiss Airlines? As I understand it, with the exception of the budget carriers again, almost no one is making any money. And then there's Concorde...

Are these financial woes related? Is there something to do with moving people around the place that is inherently marginal? Or is it related to the fact that every boy wants to design a car, build a railway or pilot a jumbo?

Or is just coincidence, with maybe the car and airline industry suffering from too many nationalistic bailouts and the rail industry never quite getting into its head the importance of property development?

Or is it just that the transport industry is like any other and that bankruptcy is simply a sign of healthy competition?

Trackbacks

Comments

Interesting post, and sorry for changing the subject somewhat.

I see that you link to a timesonline story here, and for me it worked fine.

You commented on my Education Blog about me not linking to timesonline stuff. Perry de Havilland says that the trouble is that after a few days, foreigners (not UKers) can start to get problems with some stories, demanding registration, payment etc. Not with all stories, but it's unpredictable.

So he doesn't link to timesonline stuff from Samizdata, which of course intends to take over the entire world, so keeping the foreigner happy is very important there.

I followed the same rule without knowing why, but feeling the same way about the world as Perry, I will stick with this rule.

I hope that helps.

Posted by Brian Micklethwait on September 16, 2003

And getting back to transport, I reckon your "toys for boys" explanation is a lot of what's going on here. People just love trains and planes and automobiles, and making them is the ultimate thrill.

It's a bit like the way people love to do show business. A few lucky ones make zillions, but most operate at a terrible loss, and I bet if you add it all up, the story is financially not good. I know, people have more fun failing to be actors than succeeding being accountants, but my point is: they pay for all that fun.

Posted by Brian Micklethwait on September 16, 2003

Here's one bit of transport that tends to make money, taxis. I once met a man in the business of lending to new immigrants. There were only two businesses he'd lend on, laundromats and taxis because both, (in NYC) were proven money makers.

Posted by TM Lutas on September 16, 2003

Random taxi thought: I remember reading years ago that the best index for the standard of living in any part of the world was the length of time a taxi driver had to work to be able to afford a McDonald's hamburger.

On the "boy's toys" subject, about a year ago I applied for a IT position for EWS in Doncaster, and I'm sure I would have been prepared to take the job at a lower salary than a similar IT position in some boring financial services company.

Unfortunately EWS put a freeze on recruiting before I got interviewed :(

Posted by Tim Hall on September 16, 2003

On the Times Online question, at least one of the problems is that in Ben Webster, the Times has one of the best transport correspondents around.

But you raise an issue which I have alluded to before. Indeed I think you alluded to my allusion.

Coincidentally, the issue of micro-payments has resurfaced again and somewhere (I can't remember where) someone did suggest that they are doomed because even with very small payments there is always a psychological barrier to be crossed.

For what it is worth I think the future lies in one payment that allows you to read as much as you like with payments being made on a proportional basis. Incidentally, I think if that ever happens it may well spell the death knell of traditional newspapers (if it is possible for journalists to make enough money from online journalism they'll soon dispense with the dead trees.

Posted by Patrick Crozier on September 16, 2003

Just to hand in information about Times Online: This is what I see if I try your link.
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The section you are trying to access is behind subscription.

If you are an existing subscriber please log in below.
By subscribing to this service you will be able to read The Times E-paper daily from 05:00 GMT, as well as access the Times Online website and full headline lists within the Newspaper Edition section.
This product is only available to those overseas. UK and ROI residents can still visit Times Online for free. If you are not overseas, please click the 'Are you located in the UK or ROI?' button below.
For a demonstration of the service, please click on the Demo button on the right. To subscribe please Register below.
---------------------------------------
After trying FAQs and Subscriber terms I now know I have to subscribe for a minimum of one month. I wasn't interested enough to look for prices ...

Posted by Rike on September 21, 2003

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