Private Roads

I often hear arguments from skeptics of capitalism about roads being a “natural” monopoly, so I decided to write up a fictional account of how a private road system might function. Needless to say, this is just one potential scenario that markets might create. It is impossible to say what arrangement entrepreneurs would actually organize.

Several major transportation investment firms pay hundreds of road-building contractors to build a web of speedways covering the country. The speedways function as rapid transit hubs and provide access to traditional flattop as well as maglev and airborne routes concentrated in and around urban areas. To save costs, the road-building ventures sign deals with property owners which offer them various transportation rights. These contracts usually end up on the “road rights” market until purchased by a community that desires access to the interstate network. Just as with data networks, the speedways inevitably find it profitable to provide free interconnects to their competitors. One or more integrated scanners provided by several national firms are located at every exit and entrance of a speedway to read travel passes (radio tags) that provide a given user’s account information. It is common for long-distance travelers to switch among several travel tokens just as they would with credit cards (some credit cards also function as travel tokens) to take advantage of benefits, discounts, free miles, or for privacy reasons.

Common sense once dictated that roads were a monopoly business because of the difficulty of acquiring lengthy tracts of land from stubborn property owners and building competing roads in the same area. Nowadays, entrepreneurs and courts have found a number of creating a competitive marketplace.  Competing road builders can build around, under, and even over other roads and properties – usually after getting judicial insurance to back up their claims. More often than not, the insurance guarantee is sufficient evidence for the property owner to negotiate a compromise rather than miss a profit opportunity. The most common strategy however, is the traditional purchase option contract, which can be obtained prior to construction of a roadway or as part of a contract inherited by the property owner when he first purchases his land.

The market for transportation within cities and communities is highly complex and specialized. In large urban areas, a city corporation owned by residents and investors is charged with providing a few basic services, such as trunk city roads, speedway off-ramps, firehouses, and emergency services. Smaller communities tend to provide a greater variety of services, as the stock prices of citycorps tend to vary inversely with the number of industries they attempt to manage. Within the many residential townships of a given city, subdivision roads are owned by a combination of investors and lot owners, depending on their age and wealth of the township. Smaller communities pay the city to manage their roads while larger ones contract with road maintenance outfits on their own. The city itself contracts with road builders, maintainers, highway patrols, insurers, and other services necessary to provide these services. Within commercial sectors, transportation is provided by the real-estate moguls or corporations that own or prospect that sector or specialized commercial management services.

The creation of both commercial sectors and residential complexes follows a similar pattern: after a property development company has prospected a sector for development, it will seek out the purchase and contracts options necessary to develop it. Options with speedways, city trunk lines, utilities, communications providers, and security firms are prepared and invoked once development begins. The sector is sold to individual investors who agree to the building and land use codes established by the developer. Once a sector is commercially viable, the developer will lease or sell management contracts to a sector management service, a citycorp, or individual subdivisions.