Monday, August 19, 2013

Why Building Hyperloop from SF to LA is a Colossal Waste of Money and Time

Note: Please read the post in its entirety before hating! c:

Elon Musk, famed founder / investor of Paypal, Tesla, and SpaceX, recently revealed his much-hyped concept for an ultra-fast, ultra-cheap technology that would whisk passengers from San Francisco to Los Angeles in all of 35 minutes at speeds of up to 700 miles per hour in an elevated vacuum tube.

The entire system, end to end, would cost $6 billion dollars -- and while that sounds like a large chunk of change, it's less than the $70 billion dollars expected for much-debated California High Speed Rail project, which is beset with delays and cost overruns, and construction hasn't even started yet.

According to Musk, the Hyperloop technology could enable passenger and freight travel over long distances with:
  • incredibly fast speeds
  • a near-perfect safety record
  • low capital and operating costs
  • 100% reliability
  • other statistics that are meant to blow California High Speed Rail out of the water
Honestly, I have no idea whether the Hyperloop will actually fulfill the rather lofty claims set out by Musk and other supporters of Vac-tube technologies. I shall withhold judgment in this case, even though it's likely that the $6 billion price tag doesn't quite capture the full costs associated with complex, prototypical technologies being implemented in novel situations in a highly politicized landscape with incredibly expensive land and extensive permitting process that require decades of work and research. I will still withhold judgment on this point.

What IS, however, a colossal waste of money and time, is the idea that the Hyperloop should be built from San Francisco to Los Angeles. Yes, I understand that the SF-LA corridor is one of the most travelled in the entire country (other than the Northeast Corridor); however, California High Speed Rail is already building in that corridor and has spent millions of dollars in planning, permitting, and design in that specific corridor. Building two competitive services in the same corridor would only be a waste of money. The Hyperloop should be built on a different route instead: maybe San Francisco-Sacramento-Lake Tahoe-Reno, or Seattle-Portland-San Francisco, which are both corridors with comparably high levels of traffic. This way, if both projects succeed, we end up with two separately useful systems, instead of two redundant systems.

And honestly, I think this concept of network-building may have gone over Mr. Musk's head. Transportation, out of all industries, works best with limited competition in a government-subsidized or cooperatively-managed and funded network. If every airline were required to build and maintain its own airports, very few airlines would have the financial resources to fly; and I would think that after a number of years, we would begin to see a monopoly of the airline industry, or some sort of private coalition of airlines that would regulate, maintain, and develop airports much like a public agency would. Likewise, if we required bus companies to build their own roads, we would probably not have any intercity bus services at all.

For simple economic reasons, duplicating capital-intensive infrastructure is a wasteful policy. Whether high-speed rail or a Hyperloop tube, laying down two sets of tracks connecting the same two destinations purely for reasons of creating competition (i.e. not because demand is so high that one track does not have enough capacity --) is wasteful beyond any point of economic rationality.

Mr. Musk (or whoever decides to build this technology, eventually...), please take note.


  1. This comment has been removed by the author.

  2. Agree with two points:
    1) Unnecessary competition is wasteful
    2) Government control of public goods/services is more efficient

    Consider the following:
    1) In a strong economy with excess capital or low cost of debt, large public infrastructure projects are a good long-term investment. For political or economic reasons, it may be more feasible to build a second line in the same spot (more traffic, people, money, etc.) than to build a new line to a less used location.
    2) Population solves most of this problem, as China has large and extensive rail networks everywhere, while it is hard to justify upgrading the Canadian Pacific Railway to high speed because of the vast distances and sparse population. Likewise, Van-Seattle and Toronto-NYC are more likely to happen.
    3) SF-LA has one state government backing the project, while SF-Portland-Seattle requires three states cooperating, each with different economies and population sizes. Likewise, SF-LA has the largest municipal government backings. If the railway were a federal issue, such as when PM Macdonald built the Canadian Pacific Railway to unify the country, there would be less politics involved, but the East and South wouldn't pay for that. Likewise, it seems more cost-effective to build Van-Seattle and Toronto-NYC cross-border because of the traffic than to build cross-nation. As for Alberta, oil is more effectively and safely shipped through a pipeline than railway.

  3. By and large I agree with your points of consideration, and my responses:

    1) I agree that public infrastructure projects are, generally, a sound long-term investment in stabilized economies. I would argue that in most cases the relative benefit from branching is exponentially higher than that of doubling capacity along a corridor, especially when the cost of the physical infrastructure (concrete and steel) is roughly parallel. Granted, the absolute capital requirement will be higher due to the need for land right of way acquisition and political cooperation, but my own gut feeling (unsubstantiated, I know) is that the benefits of branching systems, when well-planned, outweigh the costs. You know that as the number of destinations increases, the number of possible destination pairs exponentially increases, and thus the probability of a destination pair being convenient for a particular traveller also exponentially increases.

    2) The population density of the SF-LA route is optimal, but I would argue that the population density of Van-Sea-Portland is strong enough (roughly 10 million people living along the line) to merit consideration of a high-speed public transport project. And Bay Area - Sacramento - Tahoe - Reno would see a lot of use as well, moreso than would a second SF-LA route. I'm not entirely sure if that was the issue you were addressing... correct me if I'm misreading your point.

    3) A Bay Area to Tahoe route would arguably be politically easier and faster to build than the SF-LA route because of the more progressive nature of the counties contained within the route. Right now Cal High Speed Rail is mostly bogged down in politics on the county/municipal level. I believe three different municipalities are currently suing the Cal HSR authority.

    As for a SFBA - Vancouver route, I would imagine that at the state / provincial level it would be very highly supported, seeing as the governments in the PNW are more progressive, generally, than many California counties. As a culture that highly supports public transport, I actually think that a Vancouver - Bay Area route would be easier to gain political support and generally more favorably looked upon by the population.

  4. Additions:
    4) Europe also has extensive rail networks due to large population and small size, like China.
    5) Population in Canada and US can be increased through immigration reform.

  5. 1) Yes, just considering the railway itself, it is better to branch out. However, one must also build new roads, towns, governments, schools, farms, factories, commercial centres/businesses, airports, tourist hotspots as well. For the most part, people stick to ones that exist, and it requires mass migration for a distant town to aggregate. Again this can be done through immigration and business incentives to develop in new areas. The main industries would be natural resources (agriculture, mining, energy) for BC at least.
    2) Yes I agree with your point. I was saying that a Pacific Rail Corridor is more likely than upgrading the TransCanada to high speed. Obviously the best is to just build it everywhere all across North America (and Mexico, NAFTA) but there will need to be wide political and financial backing.
    3) Yes there seems to be a large incentive for multinational businesses to evade taxes (like Apple and Google, no matter how much I support their products) and instead they have their own employee buses and systems. Of course they must remember that their buyers (consumers as well as the next generation) rely on tax funding for infrastructure and schools so this needs to be fixed. It probably contributes to the California budget issues.

    6) On federal levels, US and Canada are both largely in debt to China and Japan. Given the high population densities in China/Japan as well as lower quality of living (likely due to overpopulation), a good solution is immigration reform, which will also provide the labour for construction projects. Of course, language and culture becomes the issue there.