Court says railway can make patrons pay through the nose

March 29th, 2013 by Philip Brasor & Masako Tsubuku

Inzai Makinohara Station

Inzai Makinohara Station

We live on the Hokuso Line, which connects Takasago in eastern Tokyo to the Nihon University Medical Center in northern Chiba, a distance of 32.3 kilometers. The Hokuso Line has been called the most expensive train line in Japan. From one end to the other it costs ¥780, and for us to get from our station, Inzai Makinohara, to its neighbor to the west, Chiba New Town Chuo, it costs ¥290. Many people who live on the line and use it have complained to the relevant authorities and demanded that fares be reduced. In fact, five local residents sued the central government, demanding that the court rescind the state’s approval of the Hokuso Railway’s plan to lease its tracks to another railway company and claiming that the plan did not benefit users. On Mar. 26 the Tokyo District Court rejected the suit, saying that the government authorization did not damage the welfare of the railway’s users in any way.

The plaintiffs said they didn’t understand the judge’s reasoning. One, a 19-year-old man, told an Asahi Shimbun reporter that when he was a high school student he spent ¥90,000 on a six-month pass, which, on average, is about four times what it costs for a comparable student pass on any other line. Now that he’s graduated and going to a prep school he no longer qualifies for the student discount, and has to pay ¥170,000 for half-a-year. Single-station fares on the Hokuso are about twice as much as they are on other lines. The Hokuso Line is part of the Keisei Dentetsu Group, whose average fare for 32 kilometers is about ¥470, so the Hokuso fares are 70 percent higher than fares on other lines even within the same railway group. The reason for the high fares has been explained in this blog before, but in a nutshell, the line was designed to serve the Chiba New Town development project, which began in 1969. Planners envisioned 340,000 people eventually moving into the New Town area, which encompasses portions of three cities, but in the end only about 93,000 actually did. The main problem for the Hokuso Railway Co. was the cost of construction, in particular the cost of land. Purchases were made at the height of the bubble era, when land prices were sky high and so were interest rates. The debt currently stands at ¥90 billion, and the railway pays ¥5 billion on the note every year. But the Chiba New Town authority, which the railway belongs to, also has to pay shareholders, many of whom are farmers who sold it the land in the first place. You can see their huge houses, built with the money they made and are still making, all over the region that lies alongside the Hokuso Line. Since opening for business in 1991, the railway has raised its fares nine times, though it also cut a few, but only by ¥10.

The kernel of the court case is a leasing deal that the Hokuso Line made with Keisei Dentetsu, which wanted to use the Hokuso tracks for its Skyliner and Sky Access express trains to Narita Airport. Regular users of the Hokuso Line were under the impression that the deal would increase patronage on the Hokuso Line and thus help bring down fares, but there was no change at all after the new service went into effect in 2010. The plaintiffs argue that the rent which Hokuso charges its parent company is “too low,” and thus the government shouldn’t have authorized the deal. The court found nothing untoward about the arrangement and, in any event, said that “fares apply to all users of the Hokuso Line” and not just to those who feel inconvenienced by the expense. In other words, everybody pays through the nose equally, so it would be improper for the court to decide in favor of only a portion of those users. The irony is that Japanese law doesn’t provide for class action suits. According to the judge’s logic, the only way the court could accept the plaintiffs’ suit would be if every single user joined in it. However, the judge did say that “patrons have the right to sue over fares,” a decision that the plaintiffs’ lawyers, obviously trying to snatch something positive from the ordeal, hailed as an important precedent, because there have been many cases in the past of railway users suing over high fares and losing on the grounds that they are not qualified to bring such a suit since the central government is supposedly acting in their interest by authorizing fares. This small victory was cold comfort for the plaintiffs, who, nevertheless, say they will appeal.

It isn’t the only Hokuso-related lawsuit to be decided recently. Thirteen citizens of Shiroi, one of the cities serviced by the Hokuso Line, sued their mayor for unilaterally authorizing ¥24 million in subsidies for the railway after the city assembly refused to approve it. The outlay resulted in a mere ¥10 fare decrease between certain stations within the city, so the citizens felt it was a waste of their tax money, but the court rejected that suit, too. Shiroi is one of the stockholders in the Chiba New Town project and thus has a stake in the railway, too. The plaintiffs in this case said that they were thinking of the welfare of the city, since they believe if the fare is reduced significanly more people will move in and thus improve the economic viability of Shiroi and, in turn, help the Hokuso Line achieve profitability. That sounds like a stretch. The main problem with user opposition to fare schedules is that most salaried employees are reimbursed for their commuting expenses, so a good portion of the people who ride the Hokuso Line regularly don’t feel inconvenienced by the expense. This fact of economic life gives rise to a paradoxical situation with regard to public transportation in Japan, which is basically authorized by private enterprise and supported by the government, meaning users pay twice, once through taxes and a second time through fares. After all, the various JR lines belonged to Japan National Railways before they were privatized in the late 80s, and thus were all built with taxpayer money, though citizens are not shareholders in any JR company by virtue of being taxpayers. The Hokuso Line is expensive due to poor planning and bad management of the Chiba New Town project, which was carried out by a combination of private developers and the government housing authority. The plaintiffs in the Shiroi case also said during the trial that many residents have moved away from the area due to high fares, an assertion that is impossible to prove but very easy to believe. The only solution to the problem would be a classically capitalist one — competition. But nobody’s going to wait thirty years for another train line to be built.

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3 Responses

  1. Philip,

    Thank you very much for this. After 6 years of living in Inzai I can finally know why my Teiki is so expensive. Right now my 6 month pass from Inzaimakinohara to Asakusabashi station costs a mind breaking 244,320 JPY. Just like you state in your article here, my company pays for the expense to get to work so I don’t feel the impact so much as others do. Our other option is to use the Narita Line that has just one set of rails and very limited service. Hopefully, my daughter won’t mind using that line once she gets to high school age.

  2. Very interesting entry but I am afraid. I will live in Shiroi from april and I wanted to buy a pass to Tokyo to look for work. Now I don’t think I will. When I think I am angry when the price of the subway ticket in Paris is raised each year!

  3. This is pretty much the same situation as in the UK except that the astronomically high prices are much more widespread and it’s only getting more expensive now that the government has started to stop subsidising the cost of private rail companies.

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