The Importance of Tangibles
I’m writing this post on a train to Copenhagen. So many things about this trip are just wrong: the air conditioning in the car where we reserved seats is broken so we had to find somewhere else to sit, the train is delayed, there was a 10-minute stop at the border for Danish cops to check the IDs of some riders (with racial profiling). Even the booking was a bit jank: the Deutsche Bahn website easily sells one-ways and roundtrips, but this is a multi-city trip and we had to book it as two nested roundtrips. Those are the sort of intangibles that people who ride intercity trains a lot more than I do constantly complain about, usually when they travel to France and find that the TGV system does really poorly on all the metrics that the economic analysis papers looking at speed do not look at. And yet, those intangibles at the end of the day really are either just a matter of speed (like the 10-minute delay at the border) or not that important. But to get why it’s easy for rail users to overlook them, it’s important to understand the distinction between voice and exit.
Voice and exit strategies
The disgruntled customer, employee, or resident can respond in one of two ways. The traditional way as understood within economics is exit: switch to a competing product (or stop buying), quit, or emigrate. Voice means communicating one’s unhappiness to authority, which may include exercising political power if one has any; organizing a union is a voice strategy.
These two strategies are not at all mutually exclusive. Exit threat can enhance voice: Wikipedia in the link above gives the example of East Germany, where the constant emigration threat of the common citizenry amplified the protests of the late 1980s, but two more examples include union organizing and the history of Sweden. With unions, the use of voice (through organizing and engaging in industrial action) is stronger when there is an exit threat (through better employment opportunities elsewhere); it’s well-known that unions have an easier time negotiating better wages, benefits, and work conditions during times of low unemployment than during times of high unemployment. And with Sweden, the turn-of-the-century union movement used the threat of emigration to the United States to extract concessions from employers, to the point of holding English classes for workers.
Conversely, voice can amplify exit. To keep going with the example of unions, unions sometimes engage in coordinated boycotts to show strength – and they request that allies engage in boycotts when, and only when, the union publicly calls for them; wildcat boycotts, in which consumers stop using a product when there is a labor dispute without any union coordination, do not enhance the union’s negotiating position, and may even make management panic thinking the company is having an unrelated slump and propose layoffs.
The upshot is that constantly complaining about poor service is a voice strategy. It’s precise, and clearly communicates what the problem is. However, the sort of people who engage in such public complaints are usually still going to ride the trains. I’m not going to drive if the train is bad; I’d have to learn how to drive, for one. In my case, poor rail service means I’m going to take fewer trips – I probably would have done multiple weekend trips to each of Munich and Cologne this summer if the trains took 2.5 hours each way and not 4-4.5. In the case of more frequent travelers than me, especially railfans, it may not even mean that.
The trip not taken
On this very trip, we were trying to meet up in Hamburg with a friend who lives in Bonn, and who, like us, wants to see Hamburg. And then the friend tried booking the trip and realized that it was 4.5 hours Hbf-to-Hbf, and more than five hours door-to-door; we had both guessed it would be three hours; a high-speed rail network would do the trip in 2:15. The friend is not a railfan or much of a user of social media; to Deutsche Bahn, the revenue loss is noticeable, but not the voice.
And that’s where actually measuring passenger usage becomes so important. People who complain are not a representative cross-section of society: they use the system intensively, to the point that they’re unlikely to be the marginal users the railroad needs to attract away from driving or to induce to make the trip; they are familiar with navigating the red tape, to the point of being used to jank that turns away less experienced users; they tend to be more politically powerful (whereas my friend is an immigrant with about A2 German) and therefore already have a disproportionate impact on what the railroad does. Complaints can be a useful pilot, but they’re never a substitute for counting trips and revenue.
The issue is that the main threat to Deutsche Bahn, as to any other public railroad, is loss of passengers and the consequent loss of revenue. If the loss of revenue comes from a deliberate decision to subsidize service, then that’s a testament to its political power, as is the case for various regional and local public transport subsidy scheme like the Deutschlandticket and many more like it at the regional level in other countries. But if it comes from loss of passenger revenue, or even stagnation while other modes such as flying surge, then it means the opposite.
This is, if anything, more true of a public-sector rail operator than a private-sector one. A private-sector firm can shrink but maintain a healthy margin and survive as a small player, like so many Class II and III freight rail operators in the United States. But a national railway is, in a capitalist democracy, under constant threat of privatization. The threat is always larger when ridership is poor and when the mode is in decline; thus, British Rail was privatized near its nadir, and Japan National Railways was privatized while, Shinkansen or no Shinkansen, it was losing large amounts of money, in a country where the expectation was that rail should be profitable. Germany threatened to do the same to Deutsche Bahn in the 1990s and 2000s, leading to deferred maintenance, but the process was so slow that by the time it could happen, during the 12 years of CSU control of the Ministry of Transport, ridership was healthy enough there were no longer any demands for such privatization. The stagnant SNCF of the 2010s has had to accept outside reforms (“Société Anonyme”), stopping short of privatization and yet making it easier to do so in the future should a more right-wing government than that of Macron choose to proceed.
The path forward
Rail activists should recognize that the most important determinant of ridership is not the intangibles that irk people who plan complex multi-legged regional rail trips, but the basics: speed, reliability, fares, some degree of frequency (but the odd three-hour wait on a peripheral intercity connection, while bad, is not the end of the world).
On the train I’m on, the most important investment is already under construction: the Fehmarn Belt tunnel is already under construction, and is supposed to open in six years. The construction cost, 10 billion € for 18 km, is rather high, setting records in both countries. The project is said to stand to shorten the Hamburg-Copenhagen trip time, currently 4:40 on paper with an average delay of 21 minutes and a 0% on-time performance in the last month, to 2.5 hours. If Germany bothers to build high-speed approaches, and Denmark bothers to complete its own high-speed approaches and rate them at 300 km/h and not 200-250, the trip could be done in 1.5 hours.
Domestically, and across borders that involve regular overland high-speed rail rather than undersea tunnels, construction of fast trains proceeds at a sluggish pace. German rail advocates, unfortunately, want to see less high-speed rail rather than more, due to a combination of NIMBYism, the good-enough phenomenon, and constant sneering at France and Southern Europe.
But it’s important to keep focusing on a network of fast rail links between major cities. That’s the source of intercity rail ridership at scale. People love complaining about the lack of good rail for niche town pairs involving regional connections at both ends, but those town pairs are never going to get rail service that can beat the car for the great majority of potential riders who own a car and aren’t environmental martyrs. In contrast, the 2.5- and three-hour connection at long intercity distances reliably gets the sort of riders who are more marginal to the system and respond to seeing a five-hour trip with exit rather than voice.



