This article examines the transportation market that is changing due to an ever changing global economy. Model A- private transportation depicts a decrease in demand shown as (D1) based on substitute goods available thus the resulting Model B- mass transportation depicts an increase in customer demand (D1) based on price sensitivity of consumers and the rise of complementary goods prices, such as fuel, insurance, maintenance, vehicle taxes and other costs that are required by customer’s to buy to operate for private transportation vehicles. There are many non-monetary effects of owning private transportation and explained within the body of this paper as well.
One of the major factors for the decrease in demand is related to complementary goods that private transportation requires customers to purchase. With private transportation fuel is necessary to operate and at the present time the costs are rising at an enormous rate and have customers looking for substitutes for transportation. The other economic conditions that are rising and act as complementary goods for private transportation are insurance, maintenance, vehicle taxes and loan payments. Most of these costs are monthly and are causing customers monthly budget problems.
Mass transportation provided by government entities are becoming more of a substitute over private transportation for citizens in most large cities. The cost of initial implementation of mass transportation is very costly, but the long-term effects are favorable over private transportation. The limitation of mass transportation is that most just operate within a city’s geographical area where private transportation can take citizens anywhere they want to go. Citizens usually have to pay a modest monthly fare fee to ride mass transportation, which is small compared to what private transportation requires along with all the complementary goods on a monthly basis.
Governments build mass transportation infrastructure to reduce crowded highways and to reduce pollution. With private transportation highways become congested daily and vehicles’ idling creates all kinds of pollution. Mass transportation doesn’t damage a cities infrastructure as much as private transportation where roads and bridges are damaged and has government departments scrambling to find funds to improve or expand infrastructures in cities. Another impact of mass transportation over private vehicles is that buses and trains can carry hundreds more citizens compared to private vehicles.
Mass transportation overall is more advantageous than owing a private vehicle with all the substitutes that are available for citizens to choose. Mass transportation reduces pollution, encourages economic development and reduces the strain on transportation infrastructure such as highways, land and bridges. The complementary goods associated with private transportation will continue to rise and citizens that are considered poor and middle class will have no other options than to ride mass transportation because it will come down to deciding to pay high monthly payments for a private vehicle or letting another necessity not get paid. Mass transportation is a great substitute over private vehicles in another overlooked condition such as health benefits. Citizens that ride mass transportation get exercise by walking to and from the bus station or train station where as private transportation citizens are either stuck in traffic or parking close to where they have to go.
In conclusion, the future outlooks points to more mass transportation options for citizens versus private transportation because of the rising costs of complementary goods and the price sensitivity of citizens in an every-changing global economy. The global economy has really stretched resources and created a higher demand along with rising costs on fuel, which is the number one complementary good for private transportation. With private transportation there are many substitutes available, but as long as fuel is a complementary good prices will continue to rise. With mass transportation there are few substitutes available, the main modes of mass transportation are buses and trains so the real substitute would have to be a private vehicle where costs associated with owing one would deplete monthly income very fast. Another interesting phenomenon that’s happening is more and more citizens are moving to cities from rural areas to look for work and are looking for mass transportation to get them where they need to go.
The future looks bright for mass transportation versus private transportation because mass transit is efficient, inexpensive and faster than private transportation in cities that have mass transit in place. I predict the future for companies that produce mass transportation vehicles will see an explosive growth in demand as governments try for the most part to help citizens deal with transportation demands since the private transportation is so dependent upon oil, which is used to make fuel the number one complement good for private transportation. The hybrid type private vehicles are another substitute from traditional private fuel driven vehicles, but really offer no economic incentives either since those vehicles are still dependent upon fuel and must have the same complements as do all private transportation. At least with mass transportation they can carry hundreds of people for the same amount that it costs a private transportation vehicle to carry two people.