There’s been a lot of hype around the hyperloop here in Ohio lately. There are two separate efforts for a regional hyperloop between the Buckeye State and Chicago: in Columbus and in Cleveland. The effort in Cleveland is much further along in the process, having completed a feasibility study, and as a result, it’s getting a lot of attention (in Cleveland, Pittsburgh, and Chicago).
I’m not totally opposed to exploring hyperloop technology, and if Elon Musk and other private corporations want to spend money testing it out, I say, “go for it!”. However, I’m skeptical that the technology will be commercially viable, and for reasons I’ll outline below, I don’t think the state should spend a single dollar on it. At this point, the tech isn’t ready, and it may not be for another 20 years or more. Unfortunately, Cleveland is already investing money in it.
The Cleveland-based hyperloop project, known as the Great Lakes Hyperloop, estimates that it would cost $29.8 billion to build. There are a few route options on the table, but the ‘best’ one would involve tunneling a straight 337 mile vacuum tube between Cleveland and Chicago. Much of this vacuum tube would lie underneath Lake Erie and Lake Michigan. I don’t actually want to dwell on how wild this plan is, but it’s worth repeating:
The Great Lakes Hyperloop plan is to put a 337-mile long vacuum tube under the Lake Erie and Lake Michigan at a cost of $29.8 billion dollars.
I don’t think that’s feasible, and moreover, I’ve had concerns that this plan is just a giant handout to rich people. When I dug into the numbers I was surprised at just how much of a handout it would be.
For argument sake, let’s say it possible to build a straight-line route between Cleveland and Chicago. Let’s imagine that we develop the technology to make the vacuum work and spend the nearly $30 billion to tunnel under two great lakes. Leaders across the region have unveiled the tunnel and cut the ribbons. It’s the first day of operation. What would the fare price be for Ohioans to use the hyperloop? What would my 30-minute trip from Cleveland to Chicago cost me? I’m going to share the some of the the details below, but the short answer is: it’s going to cost a lot, and it’s probably not for you (unless you’re one of the top income earners in the US).
Estimating the Fare Prices
Luckily, we don’t have to dig too far to find estimates for the Hyperloop’s fares. Chapter 5 of the study explores ridership and revenues, including expected ridership levels and fares for three different types of travelers: business, commuter, and other, which is sometimes referred to as “social” in the study. It shares a nice rosy breakdown of the overall fare price and the expected annual ridership:
| Type | Ridership | Optimal Fare | Avg. Trip Length |
| Business | 3.26 million | $1.08 per mile | 240 miles |
| Commuter | 1.28 million | $0.55 per mile | 240 miles |
| Other (social) | 4.63 million | $0.38 per mile | 300 miles |
To calculate the average fare, I multiplied the optimal fare by the average trip length. Here’s what an average trip would cost:
| Type | One-Way Cost | Round Trip Cost |
| Business | $259.20 | $518.40 |
| Commuter | $132.00 | $264.00 |
| Other (social) | $114.00 | $228.00 |
The social trip cost sound great, and I would take a hyperloop for a fun weekend in Chicago for $228 once a year or so, but wait a minute –
Are they expecting folks to pay over $250 for their daily commute?
The average Ohioan spends about $3000.00 annually on their commute. Even if a hyperloop commuter were only going to work 100 times per year, at $264 per day their commute costs would be $26,400, and they would still have commuter-related expenses (presumably) for the remaining 161 workdays. If they’re making the trip every workday (262 days), it would cost a whopping $68,904. That’s over 25% higher than the median household income for Ohioans and over 22 times the average cost of a typical Ohioan’s commute.
To pile on some more, the roughly $70,000 annual personal commute cost does not factor in first and last miles. I’ll go out on a limb and guess that the ultra-rich commuters who have $70,000 per year to spend on hyperloop-commuting are not going to want to live right next to the stations. More likely, they’ll drive from their wealthy, exclusive suburb (probably in a gas-guzzling SUV). They’ll demand parking (which will take up space that could be dedicated to housing). And once they’re at their destination city they’ll want to take an Uber or black car (which will increase congestion) to their office. They’ll reverse the whole process on their way home. So, the typical cost annually will be:
f(annual commute cost) = $68,904 + a + b +c
Where,
a = Cost of 262 trips to and from hyperloop station
b = Cost of 262 days of paying for parking
c = Cost of 262 Uber or black car* to and from the office
*let’s be honest – they won’t walk or take public transit
I don’t know what the exact cost will be, but any way you stack it up, it’s a lot of money for one commuter. At the community-level, giving these super-rich folks access across the region comes with high opportunity costs as well. Unless the hyperloop project included massive investments in other public transit (it doesn’t currently), we would end up building parking for SUVs (instead of housing) and ultimately we’d end up with even more car-based commutes to and from the stations. We’re looking at more sprawl into the suburbs and more demand for car infrastructure in cities. It’s a recipe for leaving cities behind. At the end of the day, cities and the state would pay some serious costs (both real costs and in opportunity costs) to subsidize super-rich commuters being able to live wherever and however they want.
Hyperloop for Whomst?
Does that add up to you? I have a hard time believing that there a lot of people out there who are willing to pay an $70 grand+ per year for their daily commutes in the first place, and I certainly don’t think the state should be subsidizing their lifestyles by spending money on megaprojects for them. We certainly shouldn’t spend $30 billion and give up prime real estate in our cities.
At the end of the day, a hyperloop that’s that expensive to use is not for the average person or even fairly wealthy folks who are in the 75th percentile of earnings. It’s going to be for the ultra-wealthy.
Bottom line: The Great Lakes Hyperloop plan will help super-rich to get where they want to go quickly and easily without having to interact with all the suckers who are stuck on the highway or on the crumbling public transit systems.
I am not interested in spending public dollars on turning the north coast into a playground for millionaires and billionaires. At this point, that’s what it looks like the hyperloop plan would do. Taxpayers have already covered 50% of the cost for the planning – that feasibility study cost over a $1 million to generate, and half of it was paid for with public funds. The implication of the feasibility study is that taxpayers will end up bearing the brunt of the costs for something that most of them will not be able to afford to use. It’s the worst kind of trickle down economics, and it’s absolutely shameful that a single public servant would be willing to partake in it.
What should we do instead?
I’ve already proposed an alternative transportation plan for Ohio that would only cost $9 billion (by my back-of-the-envelope estimation) to build and would provide more access for everyone. It’s certainly a very rough draft, and there’s a lot to improve upon, but I’ll contend that it’s way better than the hyperloop plan. Moreover, for the proposed price of the hyperloop, the three states involved could create their own rail networks that connect to one another.
Imagine if Illinois, Indiana, and Ohio spent $30 billion on a comprehensive region-wide passenger rail network instead. In place of a route that would cover 4 cities, we’d get a network that would cover the entire region, including hundreds of cities and towns. Folks from across the income spectrum would be able to move more easily and cheaply, not just the ultra-wealthy. It could spur development and growth more equitably. Combined with investments in transit-oriented development, busing, and bicycle networks, we could reduce the overall carbon footprint (and personal transportation costs) of millions of people.
We should build it instead of a hyperloop.
We could start building a regional passenger rail network now because rail technology is shovel ready. We don’t have to wait 20 years from now when the hyperloop technology might be ready. A comprehensive rail network would cover much more ground and the average fares would be much more affordable. It could provide access for all Ohioans, Hoosiers, and Illinoisians (is that what people from Illinois call themselves?), not just those who are willing and able to spend $70k per year for their commute.
Building a hyperloop will be very expensive and will probably take a long time before it’s actually operational. Once it’s finally up and running, it would be too expensive for regular folks to use. In short, a hyperloop will only benefit the most wealthy among us, and it won’t solve any of Ohio’s or the midwest’s long-term problems. In contrast, a regional rail network would cost less up front to build, and if we wanted to, we could break ground on it this year rather than waiting 20 years. It would transform the lives of everyone (rich and poor) by opening up jobs, access to education, connections to family, healthcare, and tourism. It would build connections in a region that is sorely in need of them. It would spur growth in hundreds of cities and towns in the entire region.
Let’s stop wasting our time on pipe dreams for super-wealthy elites. Let’s start building something that will actually help folks now. The time has come for a comprehensive passenger rail network. Let’s get to work.