Is Everything ‘Free’ a Success?

Some years back, we had a yard sale. I put all the sundry flotsam and jetsam out front, as people normally do,
and waited for the eager customers to come flocking by. Alas, “flocking” did not prove to be the operative word here. “Trickling” did.

If traffic did not pick up, I realized, I would get stuck putting all that crapola back in the basement. At that point, I decided to revise the mission of my little entrepreneurial operation. The old mission was to generate some spending money. The new mission was to get rid of all the junk.

Working in advertising at the time, I knew the one word that would help me actualize my plan, the most powerful word in marketing history—ah yes: “Free!” (Don’t forget the exclamation point!)

Within a couple hours, all my sale items were gone. The demand was such, in fact, that I found myself leading guided tours of my basement. Without the “Not for Sale” sign on my furnace, my customers might have seized that, too.

So color me skeptical when I read—as I just did in Slate—that the new Kansas City streetcar line has been “a runaway success.” The unexamined euphoria that surrounds the streetcar system has led its proponents to push for an extension of the line, as Buzz Lightyear might have said, to the Country Club Plaza and beyond.

Henry Grabar, the author of the Slate article, is a streetcar booster. That said, Grabar headlines his article, “Did an American City Finally Build a Good Streetcar?” Finally?

In the myriad debates leading up to the authorization of Kansas City’s $100 million exercise in mimicry—if Portland has a streetcar, why shouldn’t we?—voters were led to believe that streetcars were a success wherever they’re implemented.

Apparently not. According to Grabar, the new streetcar systems in Salt Lake City, Tampa, Atlanta, and Wash-ington—among other cities—have proved fairly disastrous. The ridership figures give the game away. In its first three months, Kansas City has been averaging 10 times more riders per day than Tampa and six times more than Salt Lake or Atlanta.

Kansas City’s success surprises Grabar. As he acknow-ledges, there is plenty of parking along the route and not many Downtown dwellers to service. Grabar concedes that the novelty of the streetcars and the summer weather have helped boost Kansas City’s numbers, but there is one other variable that has led to “success.” You guessed it: “The KC Streetcar is free.”

Yes, “free” works. My suspicion is that if Burger King gave its Whoppers away, it would pass McDonald’s in a heartbeat. Hell’s bells, if Town-Topic gave its Bigger Burgers away, it would blow by McDonald’s before the decade was out. People like free stuff.

By not charging anything, the KC Streetcar Authority liberates itself from the cold logic of profit. Not only will the streetcars fail to pay for themselves, but they will never even be expected to pay for themselves, ever.

With revenue out of the equation, the metrics of success become much more elusive. This is not a problem for the boosters. After just three months, they have decided what those metrics should be and have already awarded themselves gold stars in each category.

One measure is sales tax receipts. The KC Streetcar Authority tells us that receipts in the Downtown Transportation Development District “have grown 58 percent since 2014.” This, we are old told, outpaces the citywide growth of just 16 percent.

The fine print confirmed my sus-picions about those numbers. The greatest part of that growth came between 2014 and 2105, and this in spite of the streetcar lines, which at that time were pure obstacle.

A serious analyst would ask why the growth. One answer jumps out at all but the willfully blind: in the summer of 2014, crowds flooded the Power & Light District to watch the World Cup. In the fall of 2014, the Royals played in 15 more playoff games than they had in the previous 20 years combined. “People flocked to the Power & Light District for last year’s World Cup and World Series,” The Star reported in February 2015. The result was a “sales bonanza.”

Of course, it was. In 2015, the Royals played in 16 more playoff games. After the World Series win last November, some 800,000 people maneuvered their way around the half-built streetcar tracks to descend on Downtown and buy lots of stuff, much of it liquid.

The P&L District’s covered “living room” had become a communal celebratory space. To suggest that the streetcar was somehow responsible for the 56 percent sales tax increase between 2014 and 2016 is borderline criminal. I would bet real money—and give odds—that sales tax revenues for October 2016, even with the streetcar in operation, will be less than they were in 2015 or 2014.

In 2012, boosters shared with The Star the real motivation for slapping a streetcar line across Downtown. Their hope was to do “what progressive cities already have done to lure the next generation of young entrepreneurs, workers and hipsters to their downtowns.” To lure all those hipsters, the city would have to build new retail, condos, apartments and the like.

The thinking is that streetcars lure developers. The reality is that what lures developers are the millions of dollars in infrastructure subsidies, tax breaks, and other incentives to build along a streetcar line. As it happens, the same civic leaders pushing for the streetcars are the same ones handing out the subsidies. On this metric, how can the streetcar not succeed?

“Rail boosters in KC don’t want to wait and see if the starter line’s popularity holds,” Grabar writes in Slate. “They’ve already got plans ready for a second phase. Best to strike while the rail is hot.”

Or more accurately, best to strike before they get found out.