Quote:
Originally Posted by iheartthed
Rail transit systems don't get valuations, but they are pretty valuable assets. Recently, I was thinking about how ridership of major transit systems resembles that of some large transportation startups. In 2019, for instance, the NYC subway had about 1.7 billion passengers, and the same year Uber had about 7 billion passengers. Today, Uber has a market cap in the neighborhood of $100 billion, so is it fair to value the NYC subway around $25 billion? That seems very low.
Another way to look at it is the cost of building the same system in modern costs. $25 billion wouldn't be enough to rebuild the NYC subway from scratch today, and a big part of that is because of how successful the subway has been in making New York real estate so valuable. The Second Avenue subway cost roughly $2 billion per mile in 2017 dollars, and the entire subway system has 248 miles. So, you could use that estimate to say it's worth roughly $500 billion.
What would some other transit systems be worth using either of these methods? Also, what are some other ways to value transit systems?
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I agree, $25 billion seems very low, bc you're comparing a system that occupies physical space, infrastructure, real estate, tunnels, rail, subway cars, employees to Uber, a system if you will that has very little overhead, independent contractors, doesn't own the fleet of cars, roads, infrastructure or real estate.