How We Prioritize Our Cities

In a market driven system, what is promoted the most effectively tends to win. The best and most powerful marketeer wins, not necessarily the best product. Certainly in terms of pure  advertising, car industry out spends all other alternatives by a factor 100 or more, even if we include public service announcements for mass transit and bicycling. But what about the non-commercial incentives, the infrastructure provisions, how do they favour modality choice?

The interesting fact is that transport systems inhibit the (by marketeers) much coveted characteristics of increasing returns, which means the more who use a certain product or service (modality in this case), the higher the return in terms of societal benefit increases, exponentially!
This eventually leads to almost unbreakable monopolies, as is the case of cars in the US and maybe most accentuated in the Arabic Emirate of Dubai. Standard wars and increasing returns originated with railroads and the first telephone companies, the more who use the system, the greater the benefit, if ten people owns a telephone, it is of little use, if everybody owns one, its of much more benefit. Even more so if everybody own a mobile phone, enabling you to connect with not only the select ten, but virtually anybody around the clock, around the globe.
The externality of a monpoly in a given sector was first highlighted when the US broke the AT&T monopoly into the baby bells in one of the very few antitrust cases of magnitude in the US. A break up fueled by abuse of the obvious pricing schemes of a market absent of competitors.

Later the case of Betamax vs. VHS highlighted how a winning format could lock the market into a lesser product format (VHS), as the format with the larger marketshare became more and more attractive, not because of its intrinsic qualities, but due to a winners takes all dynamic, initially the VHS format was better at signing distribution deals for video rental. Most outlets provided VHS only, or a least a much wider catalogue, in stead of carrying all titles on both VHS and beta. Whereas Betamax was praised for its superior picture quality, smaller tapes etc.

This is essentially what has driven cars to dominate the transport system. The network effects are strengthened even further by most politicians and even some transport professors like DTU´s Mogens Fosgerau(1) believe everybody prefers to drive a car. This paradigm has governs traffic planning, commonly referred to as predict and provide (car ownership), a growth rate of car ownership is tied to the growth in BNP, 20-30 years a head. This predicted need for more freeways and parking is consolidated into infrastructure investments and zoning codes. No predict and provide is made for bicycling and mass transit, as only cars are perceived to be a growth transport modality.
In best case bicycling investments are “If the come, we will try to provide”, or “if to many die, we will provide”. Copenhagen decided some years ago on the 50% bicycling modality target in 2015, yet never made any plan or even just analysed, what it would take in terms of infrastructure, to meet the mark.

Once a critical mass change modality from train to car, the rail-line which is dependant on a high volume of passengers, starts to run a loss, at some points the train line will be converted to a less comfortable bus line, which runs less frequently and less reliably, sending even more commuters into their own cars.
As a consequence the car roads becomes congested, the time savings of the car drivers makes increasing road width economic beneficial as more cars drive the road, so converting the rail line to a bus does not save the society money, but sends the cost from rail to both buses and increased investments in roads for private cars.
The increased cars and roads, increases the need for parking, again increasing transport cost. The increased space used for car roads and parking creates urban sprawl, which increase travel distances and the need for motorised transport options. The increased cars, also greatly restricts freedom of movement of pedestrians and bicyclists, sending more into cars again.

One would think this spiral would be closely monitored by states and cities, to keep a balanced mix of transport modalities, which did not tip to and end, which would be prohibitively expensive to remedy. One might especially suspect the administration, would  be concerned as the the winning modality is the least space efficient of all, has sucked all remaining capacity out of the transport system. Not so, in Copenhagen, some 95% of investments is directed towards predicting future growth of car traffic and trying to provide it, the most expensive scheme of which is building a mini-metro which does not reach into the suburbs, and essentially only covers distances, which could easily be supplemented by light rail and bicycling.

We cross referenced key traffic measures to reveal how politicians favour the least responsible traffic option for small distances in dense urban environments.

Sources at City Hall has revealed that a bicycle-predict-and-provide approach would cost DKK 2 billion, a far cry from the DKK 66 bill. The Lord Mayor and a majority at City Hall wants to funnel into new tunnels for mini metro and a harbour tunnel freeway, which according to the Ministry of Transport will increase car traffic in local residential and neighbourhood streets up to 200%
The DKK 2 billion investment in bike infrastructure would eliminate the need for investing in both new car and mini metro infrastructure, saving  taxpayers DKK 64 Bill. That is a lot in Copenhagen, a city where total annual taxes amount to DKK 48 bill.
A Metro-Region mass transit plan developed by DTU suggesting upgrading the lousy bus service to being served by a backbone of 7 light rails lines reaching far into the subburbs, would however still be a great addition.

Graphics by:

Graphics by: Stratetast Design – http://www.stratentastdesign.com/

 

Footnote:

(1) »Når folk køber biler, vil de jo også bruge dem, og det betyder altså, at det her ønske om at få bilerne ud af byerne og få folk til at bruge offentlig transport, det vil gå i den modsatte retning. Den her stigning viser jo, at det er en meget hård målsætning at forsøge af få bilerne ud af byerne, fordi vi alle sammen synes, det er praktisk at have en bil,« siger Mogens Fosgerau. (http://www.b.dk/nationalt/udsigt-til-laengere-myldretid-og-faerre-parkeringspladser )

 

References on Increasing returns, standard wars and externalities

Arthur 1994, W. Brian Arthur, Increasing returns and path dependence in the economy , University of Michigan Press, Ann Arbor, MI., 1994 Gladwell 2000, –

Malcolm Gladwell – The Tipping Point – Back Bay Books/Time Warner – NY, NT 2000

Liebowitz 2002, Stan J. Liebowitz, Re-Thinking the Network Economy, Amacom, NY, NY 2002

Cowan & Gunby 1996, Robin Cowan & Philip Gunby Sprayed to Death: Path Dependence Lock-In and Pest Control Strategies, The Economic Journal, May 1996, Blackwell Publishers, Cambridge, MA, 1996 pp. 521-542

Cusumano, Mylonadis et al 1992, Cusumano, Michael A., Yiorgos Mylonadis, and Richard S. Rosenbloom. Strategic Maneuvering and Mass-Market Dynamics: The Triumph of VHS over Beta., Business History Review 66: 51-94. 1992.

Ferguson & Morris 1993, Morris, Charles R., and Charles H. Ferguson. “How Architecture Wins Technology Wars.” Harvard Business Review (March-April): pp 86-96. 1993.

Shapiro & Varian, 1999b, Carl Shapiro & Hal R. Varian, The art of Standard Wars, California Management Review, vol. 41, no 2, Winther 1999

Windrum 2003, Paul Windrum, Leveraging technological externalities in complex technologies: Microsoft’s exploitation of standards in the browser wars, Department of Business Information Technology, Metropolitan University of Manchester Business School/ www.sciencedirect.com, 2003

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