Understanding Hong Kong's Transit system and the limited comparability to the US

Matt Yglesias has a piece, "Great Mass Transit Doesn't Have to Cost a Fortune," in Slate about his trip to Asia (I'm jealous) and his experience with transit there, comparing the mass transit system in the Washington Metro to Hong Kong.

While I think he is absolutely right that the way we do system development and contracting in the USA ends up making transit of all types very expensive (a point made very well by Steven Smith in a couple of Forbes pieces I think, or at least one, "NYC Officials Take Notice of Astronomical Subway Construction Costs") there are some key differences that make the systems structurally different in ways that make comparison not so easy. 

1.  The Hong Kong transit system (MTR) only runs the heavy rail system (supplemented with a small feeder bus network) not the surface transit system (trams and buses), and doesn't have to provide paratransit services, which are required by the US Federal Transit Administration, and are increasingly costly for most US transit agencies.

Image of an MTR platform during rush hour in Hong Kong, from Half an ABC blog.

2.  The system covers a dense city and enjoys high ridership, with "crush densities"--the willingness of riders to ride packed in/in close proximity almost double compared to the US, making it much more profitable to carry riders than it is in the US.  (This is a similar issue with comparisons of BRT system success in South America vs. North America--the average transit vehicle in such systems in South America carry double the number of riders than systems here, using the same types of vehicles.)

3.  The Hong Kong heavy rail system is an active developer of station sites, retaining the property that increases in value because of transit adjacency, developing this property, actively managing the property, and getting the lease revenue that results ("A glance at Hong Kong MTR’s retail results," West North).

My understanding is that half the revenue of the system comes from property lease revenue.

By contrast, in the US, most of the financial benefit of transit adjacency ends up being reaped by the private sector ("The Unique Genius of Hong Kong's Public Transportation System," The Atlantic).


The real lesson is that in a dense city where driving a motor vehicle is very difficult, an extensive heavy rail transit system can be run profitably.  In the US, most city regions are sprawled out and residential and commercial areas are widely dispersed, making the provision of profitable transit almost impossible.

That being said, the MTR system is managed much better than most systems in the US, although it is newer than the biggest systems in the US and therefore less costly to operate, aided by not having to pay US wages.

For more on MTR, see this blog entry, "Exporting success from Hong Kong's MTR," from City Block.

Note that it isn't that the situations aren't comparable, but the structural conditions are significantly different, which explains why transit can be profitable in Hong Kong and a loss leader in most North American cities.