Privately run train companies seem to be a remnant of America’s distant past. But a pair of billionaires — Wes Edens and Richard Branson — are trying to make it a 21st-century reality.
Their firm — Virgin Trains USA LLC — currently operates a rail line between Miami and West Palm Beach, Florida. Bloomberg News says it is "the first major private intercity rail service built in more than a century."
However, their dreams are much bigger. They want to expand their service in Florida to reach Orlando and Tampa. On top of that, they also want to connect Las Vegas and southern California. The company estimates a total of $7.2 billion will be needed for those goals. It hopes to raise the first $500 million of that money in an upcoming initial public offering (IPO).
Why would a 21st-century investor put money into a 19th-century idea?
The company believes it can generate $1.7 billion of annual sales for its passenger train service. However, one analyst noted that seems "very ambitious" given that the company earned just $5 million in sales last year.
While there are many potential challenges to building such a private railroad today, the biggest is the automobile. The railroad won’t get people from Orlando to Miami much faster than they can drive.
With that in mind, it is "reasonable to ask whether Americans can bear to leave their cars behind." And, with the coming of self-driving cars, the challenges to a modern railroad will only increase.
Each weekday, Scott Rasmussen’s Number of the Day explores interesting and newsworthy topics at the intersection of culture, politics, and technology. Columns published on Ballotpedia reflect the views of the author.
Scott Rasmussen is founder and president of the Rasmussen Media Group. He is the author of "Mad as Hell: How the Tea Party Movement Is Fundamentally Remaking Our Two-Party System," "In Search of Self-Governance," and "The People’s Money: How Voters Will Balance the Budget and Eliminate the Federal Debt." Read more reports from Scott Rasmussen — Click Here Now.