North Carolina’s Light Rail System a New Poster Boy for Cronyism

Say you need to get from point A to point B. Taking the shortest distance between the two is typically the one most traveled and most desired. Google Maps tends to think so too, though the app does sometimes offer nonsensical routes. Sometimes I find myself asking Google Maps, “Why would you ask me to drive 30 min out of my way?” Perhaps you have done the same. Which is the reason you and I should be asking the North Carolina legislature why they want to waste our time and money by suggesting slower alternate means of transportation. Unlike Google simply suggesting other routes, the legislature is subsidizing slower routes while preventing faster routes from even existing.

North Carolinians’ taxes are subsidizing “light rail” — billion-dollar alternate routes in CharlotteDurham, and Chapel Hill. The legislature is embracing mass-transit subsidies while at the same time pushing new rules to charge ride-sharing companies such as Uber $5,000 annual fees just to operate.

The contrast is striking: legislators on one hand force taxpayers to subsidize wildly expensive and inefficient light rail lines while imposing charges on wildly popular, affordable, and efficient transportation alternatives developed by free-market entrepreneurs.

Last year, the lawmakers quietly pushed through a bill that codified practices already implemented by the ride sharing industry. Yes, it is exactly as it sounds: North Carolina’s legislators decided to pass laws mandating the same things the free market was already doing. Along with the needless regulations comes the arbitrary $5,000 annual fee. The reason for the fee was never explained, but the obvious effect is to discourage competition.

Unlike Google simply suggesting other routes, the legislature is subsidizing slower routes while preventing faster routes from even existing

Standing alone, the law severely limits innovation and creativity for new ride sharing opportunities. It slows, if not prevents start-up competition from entering the market that would otherwise challenge the status quo of Uber and Lyft. Should the two companies ever become just another taxi service through government regulation — which looks more and more to be the case — consumers deserve the opportunity for startups to fill the void. Adding a $5,000 price tag to start a business from scratch eliminates many potential opportunities.

When the ride sharing restrictions are coupled with the state’s insistence on spending billions of dollars on slower, less efficient and more centralized sources of transportation, it is evident that lobbying, cronyism and corruption are involved.

Just last week, a story out of Charlotte highlighted how consumers are choosing ride sharing over light rail due to speed, affordability, and convenience. It should come as no surprise that a service offering freedom from walking along dangerous routes, waiting in the rain, figuring out connectors, and finding your stop is outperforming a behemoth billion-dollar state project that provides none of that.

Charlotte’s light rail service chief executive John Lewis actually advises riders to use Uber as a way to bring people to their light rail stop to wait for the train, then hopping back into an Uber at their final stop to get where they wanted to go all along.

The sad part about this story is that women and families in low-income neighborhoods could benefit directly from the very ride sharing opportunities the government penalizes. These are the same people allegedly helped by light rail, but in reality are shoved out through gentrification. Wherever light rail stations go up, families who depend upon affordable rental homes near their work or schools are displaced further and further away due to rising real estate prices.

Women and families in low-income neighborhoods could benefit directly from the very ride sharing opportunities the government penalize

Light rail benefits politicians, well-connected developers and construction companies by using billions of taxpayer dollars on feel-good projects. These “businesses” and “jobs created” by light rail would more than likely have been created elsewhere if left to the voluntary choices of consumers and producers.

If light rail were capable of providing a valuable service for commuters at an affordable price, private sector entrepreneurs would invest in the projects. The fact that light rail relies so heavily on taxpayer subsidies tells us that society values light rail services far less than the actual costs of providing the services. Jobs and other scarce resources wasted in building light rail projects should and could have been directed elsewhere by productive businesses and entrepreneurs who provide better value to society than light rail does.

If our state were serious about transportation, it wouldn’t spend tax dollars on billion dollar projects benefiting only the rich. And it would eliminate barriers to affordable and direct transportation North Carolinians are already choosing in spite of government.

To learn more about the history of North Carolina transportation policy dating back to 1985, check out the Civitas Institute’s public policy guide series here.

Greg Pulscher is a contributor for Opportunity Lives. Hear more from Greg on his weekly podcast Free to Brew. Available on Stitcher and iTunes.