San Francisco / June 12, 2019

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The Mercury News recently released information (link) on a plan titled "Faster Bay Area". Nine counties in the Bay Area would raise $100b in taxes over several decades to create a more developed network of rails, buses, and ferries.

At a high-level, this seems very interesting. Imagine how much better life would be in the Bay Area if we had a public transportation system like the London Underground. Better public transportation would reduce the cost of living and make the region more accessible to people on a wider range of incomes. This should be a priority for the Bay Area. Many of the creative and interesting people are not driven by money or a consumerist lifestyle. If you price out the creative types, life gets very dull.

The Bay Area has the tax base to support a project of this scale. If you could promise the taxpayer that government would successfully execute on building a better network of rails, buses, and ferries, most taxpayers would probably approve Faster Bay Area. But many local taxpayers have seen a long list of failed government initiatives and they are rightfully skeptical. I want to propose a few simple heuristics to guide the project.

First, the planners should try to run small experiments. In the early phases of this initiative, make small promises. Tie tax increases to the successful execution of small projects.

Second, think about giving private firms the opportunity to participate. If you gave a startup the rights to land and authority to build, many startups would jump at the opportunity to build a better network of trains in the Bay Area. The distinctive trait of government in this situation is that it has more control over land and building authorization. Imagine if local government broke Faster Bay Area down into smaller projects and ran auctions to sell the right to build to private firms. Every player in transportation and logistics would think about submitting bids in this process. Uber, Lyft, Google, Amazon, Elon Musk — everyone — would think about bidding in this auction. If you structure the auctions appropriately, the government could minimize what it would have to raise in taxes. Government should try to leverage the strengths of the private sector to increase the chances of success.

Third, get advice from strategists who played significant roles in building public transportation in other cities. Local government should identify the best rail, bus, and ferry systems around the world. Find people who built those projects and include them in Faster Bay Area. Local government should try to minimize the execution risk.

There is a lot of potential to make the Bay Area a better, more affordable, and interesting place to live. A more developed public transportation system would make a significant difference. I hope Faster Bay Area leads to meaningful improvements.