Sunday, February 26, 2012

Greed, and by Extension the Greedway, is Good

I simply have had enough of the uninformed whining about the tolls on the Dulles Greenway and the misguided attempts to artificially lower them.

Here’s the deal.  The Greenway (not the Dulles Toll Road) is privately owned.  It was built on private land with private money.  No land was condemned by the state to build it, and, in fact, the Greenway pays more than $3 million per year in property taxes to Loudoun County. (The Greenway owners, by the way, are doing a crappy PR job  — there’s some really good info on their site that they need to get out).

As a private entity, and even considering the rather unusual structure by which the owners are repaid and the road turned over to the state, the owners have every reason to maximize revenue. The toll is one factor of that revenue, but the number of paying customers is the other. Thus, to maximize revenue, the owners must price the road according to what the market will bear.  If it’s too high, no one will use it and they’ll lose money.  Simple free enterprise economics.  The relatively high fee is more likely a function of the market (that is, the disastrous state of transportation in northern Virginia) than the greed of the owners.  The owners can charge that rate because they can, and they can because the alternatives stink.

If you don’t like the toll, don’t pay it and suck up the longer commute. Just don’t give me the mindless populist drivel we hear every election season, particularly from supposedly free market Republicans, that localities need to control the rates or that the rates should just be  . . . lower.   We need to encourage creative solutions to our traffic problems, and discouraging future attempts at private roads certainly isn’t helping matters.  Let the free market work, and we’ll all be better off in the long run.

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