In developed countries, rail transport is usually provided at financial loss, and needs to be subsidised by governments. In countries who have refused to do so (mostly on the American continent), passenger rail transport has become anecdotal and rail remains used for freight only, while in countries who subsidise their rail network (mostly on the European continent), rail transport has decreased significantly since the 1950s. Government subsidy leads to many problems such as the imposition of cost-saving measures on rail transportation companies, preventing them from doing their job well.
- They are constantly looking for small, less profitable lines to close.
- When it's not the line it's the individual stations that might be considered unprofitable and are closed.
- They reduce the frequency of services, which by itself makes passenger trains much less attractive as the mean time of waiting for the train increases dramatically, which results in fewer passengers and an even less profitable line.
- Even if none of the above happens, transportation companies might be unable to buy new vehicles and may have to maintain their service with old and obsolete vehicles.
However, rail passenger transportation is, from a purely engineering point of view, much more efficient than road transportation (both private vehicles and buses):
- Higher passengers per hour theoretically possible on a given line. A road lane can have a vehicle at most every 2 seconds, so if we assume 1.5 per vehicle (optimistic figure) that's 2700 passengers per hour. Rail can have 500 passengers per train and 8 trains per hour easily, that's 4000 passengers per hour.
- Because rail friction is smaller than that in pneumatic tires, the energy spent to transport each passenger is typically much lower (according to this wikipedia page Passenger transportation by rail requires less than one-tenth of the energy needed to move a person by car or plane)
- Maximum speed much higher: a maximum speed of 115 km/h is usual between villages for regular trains; up to 200-300 km/h is common for high speed trains. In most countries cars can only go up to 80-90km/h between villages and 120-140 km/h on an autobahn, but even then traffic congestion makes such speeds rarely attainable, while traffic is planned in advance for trains and is a much smaller problem. (If, like in some countries, trains are running slower and/or traffic is poorly managed, that's because no effort was made and not an inherent flaw of rail.)
- Much better safety: in Switzerland 2017, there were almost 18,000 people wounded or killed by road, only 57 people wounded or killed by trains (excluding suicides), this makes road 312 times more hazardous than rail.
- Train passengers can perform another activity during the ride, an option which is limited in road transport, even for non-drivers, as the comfort and space available is much lower. (Unfortunately some trains can also be uncomfortable but this is due to bad wagon design and not an inherent flaw of rail transport.)
- Rail transport is resistant to poor weather condition: fog, frost, snow, rain cause fewer problems than with road transportation.
Theoretically, by the mechanisms of economic freedom and concurrence, offer and demand, capitalism automatically finds an optimal solution. This does not seem to work for transportation, as the optimal means of transportation (energetically speaking) is not financially profitable and needs to be government-subsidised, while an extremely sub-optimal solution (road transport) is economically preferable.
What is the capitalist solution to make rail passenger transportation economically profitable again, like it used to be before road transport was a thing?