How Hong Kong Built the World's Best Transit ?

 Every day of the week, 5.9 million people take Hong Kong public transport.

 Among them, 5.894 million, or 99.9% arrive on time. It's so efficient, so clean and so convenient that virtually everyone uses it. If the United States, with 800 cars per thousand people, has a car culture, Hong Kong, which has only 92, has a culture of public transport. With the exception of the outer islands, there is an easy way to go almost anywhere on the territory…

On Hong Kong Island, the iconic and only fully double-decker tram system in the world costs only 2.3 Hong Kong dollars, or 30 US cents. Nearby, the Peak Tram takes you at most spectacular city view in just 7 minutes - a steep climb of 370 meters or 12,000 feet it would otherwise take a whole hour. You can move to Kowloon to relax 120 year old Star Ferry. And when you leave Hong Kong, there is no need to take your luggage to the airport. You can drop them off in the city, then shop, eat, explore and they will automatically be sent to the airport, loaded onto your plane, and be there to wait wherever you are arrival. There are buses, cable cars, helicopters, and the longest outdoor covered escalator in the world. Finally, the Mass Transit with 12 lines and 93 stations The railway, or M-T-R, is responsible for moving most of the city's seven and a half million people.

Photo by Florian Wehde on Unsplash


 A special Mickey Mouse themed line goes to Disneyland, another racehorse on event days, and yet another crosses the continent China. It's no wonder that more people are taking the MTR every day that the entire population from Norway or Singapore. But unlike almost every other place in the world, Hong Kong public transport pays himself. It's so profitable that it actually subsidizes government - not the other way around. And its unique business model is unexpected window on the demonstrations underway in the city. In most cities of the world, transit is considered a public good. Like building roads or hitting coins, buses and trains should not be profitable. And although it is economically useful to obtain people to and from where they can do and spend money, there is less incentive to earn it's clean, fast or comfortable. The problem is, especially in America, users of public transport is disproportionately young and poor.

 That is to say not politically useful. In Tucson, Arizona, for example, a third the driver of public transport is in poverty, against 13% in the general population. For this reason, it is treated as a social network well-being - mainly for the poor and subsidized by all. The easy way to measure how much money a system loses is to calculate its Farebox Payback ratio - that is, the total amount number of rides divided by the cost of the ride he. The lowest cities, that is to say the least profitable are almost all in the United States: Detroit is at 20%, Dallas is 14 and Santa Clara County is 10! In other words, tickets only pay for a tenth of his expenses. The remaining 90% are subsidized, reluctantly, by local, state and federal governments. An example of a high ratio is that of San Francisco Bay Area Rapid Transit, 70% - approx like Berlin, Beijing or Amsterdam. But there is also the Hong Kong MTR. Tariffs pay 185% of its operating expenses, the highest in the world.

 In 2017, it generated 21.4 billion Hong Kong Profit dollars. 

And yet, one way or another, it's still extremely affordable. To get from one side of Hong Kong Island to the other - from Chai Wan to the town of Kennedy - costs only 10.7 HKD or 1.3 US dollar. To go from the border with the mainland China to the center costs 50.5 or 6.4 US dollars. It's about half that of children, students, the elderly and disabled.

There are obvious reasons why Hong Kong such a great advantage of transportation. 

First, as one of the densest places in the world, with, for example, 57,250 people per square kilometer, or 22,104 per square mile in the Kwun Tong District. Second, its infrastructure is relatively young. The London Underground opened in 1863, the New York subway in 1904 and Hong Kong MTR in 1979. But there is another secret ingredient for his success. The MTR is so profitable despite being affordable by selling businesses its largest asset: access to 90% of Hong Kong population taking the train. The real product of MTR is its ability to decide almost unilaterally where the Hong Kong people go. Here is how it works: First, before construction, the The government of the Hong Kong SAR grants the company development rights around new stations. The MTR pays for the land, but at "greenfield" price - that is, its value before the station is built.

Then he builds the new line or station, which, due to the ubiquity of MTR, instantly makes the earth in and around it much more valuable. Finally, he sells or rents this space to real estate agents. More than 1,400 stores are rented in stations, and the areas above and around them are often partly owned by or in a profit-sharing agreement with the MTR. This includes the first and second largest buildings in Hong Kong, the Four Seasons hotel, the Ritz Carlton and about 50 others. It also connects MTR branded shopping centers to stations. There is even an apartment with 50 towers and 21,000 apartments, MTR district called LOHAS park. For this reason, it is quite possible to spend your whole day sleeping without knowing it, eat, shop, watch a movie - without technically leaving public transport. This is called the Rail + Property strategy and, as expected, it is very profitable. In 2018, the company made HKD 8.2 billion transit operations - i.e. tariffs - but 12.7 real estate development, rental and business case.

He then returns some of that money, like stock dividends, to the government - which owns 75% of the business. By not depending on government funding, the MTR can maintain and develop its operations quickly, as an efficient and market-based company. The government, meanwhile, does not see the transit like an insatiable financial pit but a significant source of income that is actively encouraged improve. For example, the MTR is legally required to report any delay of more than 8 minutes to the government. And a 31 minute delay results in a million HKD fine. Trains are quiet and clean - with a no food or beverage policy. They happen so often that there is no need for a calendar. The Octopus card makes payment as easy as just one tap - and it also works conveniently shops, supermarkets, restaurants, distributors machines, washing machines, even parking meters. Finally, 75% of the population lives in one kilometer from a station.

As great as it is, however, there is a catch. Looking at a map, Hong Kong looks like a tiny room for 7.5 million people. But, behind the rows of skyscrapers, visible from almost anywhere in the territory, are lush, green and undeveloped mountains. Hong Kong is very dense, but the problem is not a lack of space, Almost three quarters of its land is green space. Only 25% is even developed and a tiny 7% is Residential. Of course, part of this land is mountainous and simply cannot be developed but a the portion is unused or underused. For example, the sprawling 420-acre Fanling the golf course is surrounded by rows of 40-storey residential buildings. There is a simple economic reason for housing is so rare. To attract business, Hong Kong has one of the the lowest income tax rates in the world. Instead, he earns money from land leases.

Apart from the Saint-Jean cathedral in the center which is a private property of the Church of England, and a few 999 year leases like the US Consulate, all land in Hong Kong is government owned and leased - typically for 50 years. 27% of public revenue comes from the land sales, which means he has little reason to flood the market with more supply, despite the intense need. Instead, it limits the offer by slowly auctioning above ground as house prices continue to rise to skyrocket. A small 200 square foot studio can cost 4 or 5 million HKD or 600,000 US dollars. The median annual salary is around 12 square feet. In this way, the MTR company and the government, with their perverse incentives to restrict land rights and rising prices are, in part responsible for a housing crisis in which Hong Kong people sometimes live in tiny and dirty houses the size of the coffins.

So one way or another, Hong Kong people pay for their world-class transit. 

Not just in the form of inaccessible housing but also in control they inadvertently grant the MTR and, by extension, the government, to decide where and when they can travel. Although fast, cheap and efficient public transport allowed millions of Hong Kong people to fight for their freedom it became more recently a tool to hinder them. Stations in and around events are regularly closed on weekends, effectively cutting most of the population arrive and conveniently blame the protesters for interruptions. It's an edifying tale of the indisputable quality technology can easily be co-opted into the wrong hands. The solution, however, is better technology. When government forces spy on protesters' apps use to communicate, the solution is to build a better, more secure and encrypted system. To protect ourselves from facial recognition, we need to better understand how their neurons networks and machine learning algorithms work.

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