Michael Schrage would rather invest in a counterpart of Ryanair, than in fixed track locations: “It may work for Asia and Europe, but people are closer together, the city densities are different, the lifestyles are different, the cultures are different.”

Question: How viable are high-speed trains?

Michael Schrage:  Speaking as somebody who will probably be taking the Acela some time this week, it would be nice if we had higher speed trains, let alone high-speed trains. I think that when you do back of the envelope, capital internal rate of return calculations and the number of people moved and the value of these things, it really doesn't work out very well.  I am not an optimist on light rail or high-speed rail.  I think I would rather invest in a counterpart of Ryanair, than in fixed track locations.  I think it may work for Asia and Europe, but people are closer together, the city densities are different, the lifestyles are different, the cultures are different.  And I'm one of these old fashioned people who take culture and lifestyle differences very seriously.

I believe that regions and states and cities should be doing experimentation.  But it's been my unfortunate observation that a lot of what people call experiments are really ways of throwing money at a problem.  One would think that California would have all manner of dedicated, faster rail.  But you look at the economic success that Bart is not in the Bay area, despite the fact that there are good population densities, despite the fact that there's a variety of different ways to create complements between the rail and the car, and they haven't managed to pull it off.  And I don't think people in California are stupid, so there must be other reasons.

Question: How viable is shared mobility?

Michael Schrage:  Yeah, people are doing the Zip car thing, they're doing the bike thing.  I know that they've tried this in Paris and have discovered that sometimes people aren't as well behaved or as altruistic or as nice as they should be. 

Let me say something politically incorrect and I'm going to argue that some communities will do the shared thing very, very well.  If you held a gun to my head, I think that many of these things will go over well in Denmark and parts of Sweden, rather than in parts of Paris. 

I think shared mobility is a perfect example of something that technologically we could do with a snap of our fingers.  The problem ain't the technology, it's--altogether now--the value and the politics, it's the differences in lifestyles.  Do I think shared mobility will do gangbusters in Tokyo and Kyoto and large parts of Shanghai and Beijing?  You betcha!

By the way, the reason why it's going to do really well in Beijing and Shanghai?  Is if you don't share nicely, they're going to put you in jail.  That's just not going to happen in America.  No matter how much certain people want it.

Recorded on January 22, 2010