Comment by svara
1 day ago
As far as DB goes, I'm pretty sure it's mostly an issue of systemic technical and consequently social collapse.
The system runs beyond its limits and consequently the culture collapses because the people inside learn they have no agency.
The German rail network is quite good on paper, with dense and high frequency connections even to relatively remote locations.
But keeping that functional (particularly with constantly rising demand) requires far more investment than it receives.
All the examples of great rail systems (France, Switzerland, Japan) are both simpler in network structure and invest more relative to their passenger load.
The privatization of the train system in Germany was a particularly insane disaster that is only now, 30 years later, being undone/repaired.
If you look at an org chart of the DB these days, the most fascinating part is that DB consists of almost 600 separate corporate entities that are all supposed to invoice each other.
Speaking with insiders, it appears that when the privatization happened, the new corporate structure took what was essentially every mid-size branch of the org chart and created a separate corporate entity, with cross-invoicing for what would normally normal intra-company cooperation. I think the (misguided) goal was to obtain some form of accountability inside a large organisation that had been state-funded and not good at internal accounting.
This fragmentation lead to insane inflexibility, as each of the 600 entities has a separate PnL and is loathe to do anything that doesn’t look good on their books.
Add to this a history of incompetent leadership (Mehdorn, who also ran AirBerlin into the ground, and who was also responsible for the disastrous BER airport build-out), repeated rounds of cost-cutting that prioritized “efficiency” over “resiliency of the network” etc. etc.
DB is currently undergoing a massive corporate restructuring to simplify the 600+ entity structure, but there has been a massive loss of expertise, underinvestment in infrastructure, poor IT (if you see a job ad for a Windows NT4 admin, it’s likely DB), etc. etc. — it’ll take a decade or more to dig the org out of the hole it is in.
It was a privatization in name only. The German state held 100% of its shares since the beginning. As such, it might have no longer been subject to the state specific demands of hiring etc. - but instead found itself in an uneasy tension as the only supplier of services to an entity that was something between a customer and a shareholder.
Which brings up an interesting question: How do you structure something with a large piece of infrastructure like a rail network in a way that could benefit from the market forces of competition and innovation?
> Which brings up an interesting question: How do you structure something with a large piece of infrastructure like a rail network in a way that could benefit from the market forces of competition and innovation?
A rail network is near to a natural monopoly. You can build overlapping rail networks, but it's complex and interconnecting instead of overlapping would usually offer better transportation outcomes and there's a lot less gauge diversity so interconnection is more likely than overlap.
All that to say, you can't really get market forces on the rails. Rails compete with other modes of transit, but roads and oceans and rivers and air aren't driven by market forces either.
Transit by rail does compete in the market for transit across modes. You can have multiple transportation companies running on the same rails, and have some market forces, but capacity constraints make it difficult to have significant competition.
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> It was a privatization in name only.
Not, that "insight" again. Yes it was privatized and yes it is still completely owned by the state. "Privatization" is a term of art (in German) that refers to the corporate structure not the ownership. There are also public corporations in Germany, that are fully owned by random people: e.V. = registered association.
I believe modern economists are studying how ownership should be assigned. The thinking is that contracts and rules handle the majority of situations but emergencies and edge cases require an owner who has authority and whose interests align with the thing they control. And you want a mechanism to reassign ownership when the previous owner is incompetent.
In the case of a national train system, you may want to create a national entity to develop, coordinate, and make the physical trains and support technologies. You would create regional or metro entities to control the train network for their local area including the train stations. They coordinate with each other via negotiated contracts. Any edge cases or emergency falls under the purview of the owning entity. For example, the national entity controls the switch from diesel locomotives to the newest engine. The local authority is responsible for repairing the lines after a natural disaster.
If an entity is egregiously incompetent or failing, the national regulatory authority, with support of the majority of all the different train entities, takes control and reforms it.
keep the rails as a state-owned monopoly, let different train operators run on it. Basically we have that for airplanes, and it works well enough.
You can’t. Every attempt at privatizing rail is a failure with worse performance, higher prices, and an inevitable level of special treatment by the state due to the monopolistic utility-like nature of rail infrastructure. Not everything needs to or should be privatized.
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>invest more relative to their passenger load.
For Switzerland does this account for the almost double salaries or only absolute spending?
If you spend 1€ in Switzerland I imagine you get much less work output than for 1€ in Germany.
Raw investment numbers don't necessarily matter, but the productivity of said number. Even if things are more expensive in Switzerland, if they make efficient use of said investment, then it can work out ok (or even better).
I have no idea if this is actually the case, but you have to take that into account or Switzerland would not be as successful as it is. Higher incomes have historically been a symptom of productivity (and while median incomes and productivity have decoupled, especially in the angosphere, it is still usually correlated).
>Higher incomes have historically been a symptom of productivity
If I go to Zürich I get a burger for 30Fr that I can get in Southern Germany for 15€ and in Berlin for 8€. That is with roughly the same quality.
I'd say past productivity leads to network effects and investments in one area that boost local salaries and decouples them quite strongly from current productivity.
My previous company had a per-dollar extremely unproductive location in silicon valley. The people there weren't at fault. You don't magically become more productive because you live next to SF.
That's the crux: we must invest in trains instead of planes.
I have no idea how planes are the dominant form of transport for relatively short routes (like within the bounds of a large country or to an adjacent one) and how even in Europe the train networks can be a bit of a mess.
Like surely it’s easier to run a railway network when compared to the insane complexity to safely operate an airport and all the work that goes into plane maintenance and pilot training and so on.
You need a lot of infrastructure for trains (and a lot of it isn't even used all that much -- it's not like all rails have a train passing by every 5 minutes). You also can't get much use out of your rolling stock because the speeds are fairly slow. You also don't have the same flexibility as planes have regarding routes.
The upshot is that trains are a lot costlier than most believe think and most railway routes require state subsidies (with goods transport usually being an exception), whereas air traffic works so well it can be taxed heavily.
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Why?
Planes are faster, and there is actual competition keeping prices down. There is no competition on railroads, no accountability, no nothing. More importantly, railroads have to be managed centrally to work. And this makes them overwhelmingly complex, resulting in an ever-growing bureaucracy.
Air travel is decentralized, and while individual airports (cue: BER) can get screwed up, it doesn't cascade through the whole system.
We just need to add a bit of carbon pricing to reflect the true price of flights.
No amount of money will overcome the fundamental issue: monopoly.
Airlines are subject to market competition since any competitor around the globe can spot a poorly run route and buy their planes into those slots. If they can execute more efficiently than you, they can afford to lower prices (or increase the level of service) more than you, and thus put you out of business.
Trains do not work this way. No amount of investment can overcome the cushy institutional-rot, laziness, and demotivation that inevitably results from being a monopoly, as most train routes are not subject to competitive forces due to the real world constraints of the infrastructure needed.
France, Italy, Austria (and probably others) don't have monopoly on long distance train. For instance, you can take a DB/Renfe/Trenitalia train on french high speed line, or in Austria take a Westbahn train instead of ÖBB.
That said personally I much prefer the mostly fixed pricing (and no reservation required) of swiss network than the dynamic one of other countries.
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China and Switzerland seem to do fine with trains.
The German rails network went downhill when they decided to socialize the losses and privatize the profit. Failure is blamed on the grunt workers, which are absolutely not interested in taking responsibility as a result of this. The fact that there are rotting railways everywhere and the DB waits until it gets so bad for cities to step in and take over part of the cost is a wonderful example of this. The new ICE's speed is actually lower than previous generations.
I have seen this systemic problem in other domains I worked in. The problems are very similar, and at the end of the day I can somewhat relate to the workers attitude of "why should I lean out of the window if I get punished anyway". But in some cases the workers are unfireable and oftentimes it is exactly that attitude that let the management get away with the terrible working conditions (most of the times more psychological than physical abuse) so it feeds into each other.
Just an aside, as a railway-nerd:
> The new ICE's speed is actually lower than previous generations.
While not the fastest ICE, the new ICE-L (assuming you refer to it) with a top speed of 230km/h, is not actually slower than what it is supposed to replace on most routes: InterCity trains, topping out at 200km/h.
ICE-L, btw, was planned to be a IC train, but just like before with IC-T/ICE-T (same top speed of 230km/h), and IC X (ICE 4), DB management has a tendency to decide next-to-last minute, that new vehicles must earn money and thus get rebranded ICE, which is both more prestigious and (at least in a fictional world without "Sparpreis") pricey.
TL;DR: This would be outrageous if ICE-L was to replace ICE 3 (neo; 320km/h +) services - but it is not.
Yeah, I didn't feel like looking up the exact details, so thank you for adding that. I didn't know that it was rebranded like that, I was just baffled at the outcome. Our mechanical engineering professor was responsible for the ICE breaking system a long time ago and those guys were all extremely good.
The other aspect is that there is a whole host of periphery issues, one of which is track maintenance, making it so for a lot of segments the ICE will not reach its top speed.
Add to that the transport buisness beeing marginal to the company who is mainly a immo speculation company trying to sell the strips of inner city land they hold.
Immo being real estate (Immobilien), for the curious.
Could be. It used to be that to get phone service in Germany could take up to a month after putting in the order, that’s when it was state controlled. After the reforms installations were quicker.
So to me, there doesn’t seem to be a panacea except to hold the services accountable in some way.
That's a different situation / scenario and addressed a different problem.
The government is the most efficient and effective at big capital spending and with what I would call static operations. Competitive private entities are the best at delivering value on the front-end.
Monopolist/cartel private entites combine the rapacious nature of rent seeking with the lazy inefficiency of bureaucracy to great a giant ball of failure. Effective privatization requires either creating a framework for a robust competitive landscape OR tight, effective regulatory control. There's no universal correct answer.
If competition is in place and companies can win or lose, they will move mountains to yield marginal gain. If you let them get fat & lazy, you will need to move a mountain to do anthing -- even make more money!
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> After the reforms installations were quicker.
And everybody has the same "market" price.
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