Competition & free market give Hawaii affordable transportation

by Eric Shierman

Hawaii is a US state but also due to its distance and history remains somewhat foreign at the same time. Last week I wrote about my observations of today’s Marine Corps, having been given an exclusive tour of the Third Marine Regiment and its unique base on the northern shore of Oahu. There are two other observations of mine regarding transportation policy worth sharing with you.

First, I flew on my favorite carrier, Hawaiian Airlines. Browsing their in-flight magazine I discovered they are aggressively adding new Asia/Pacific destinations. As I wrote about last fall, there is absolutely no reason for the Port of Portland to be subsidizing international flights to Asia when we have always had a premier gateway across the Pacific with Hawaiian Airlines via its Honolulu hub. With a brief stop along the way, Hawaiian offers Portland travelers comfortable service on wide bodied aircraft to Honolulu every morning 7 days a week, which connects Portland travelers to a number of Pacific destinations.

I managed to get a nice shot of one of their recently acquired A330s.


This particular one was going to Osaka, one of several Japanese cities Hawaiian services beyond the usual Tokyo destination of most American carriers.


Of course we’re talking about more than just multiple destinations in Japan here. With generously portioned complimentary coach meals that include free glasses of wine, you would be surprised to know for example that Hawaiian offers Oregonians the cheapest option to the Philippines, Tahiti, and American Samoa. These formerly expensive routs are now more affordable than you would think and all without subsidy.

hawaiian map

Second, Hawaii has remarkably good bus service for being so rural and sparsely populated. One of the secrets to their success is that much of this transit capacity is taken up by very affordable and reliable private, for-profit competition at no expense to Hawaiian taxpayers. They operate cute, trolley looking buses whose schedules are very adaptive to actual rider demand.

hawaiian bus

This private competition with public transit stands out as such a success even on the thinly populated big island, that I had to ask the world’s leading expert on public transportation, Randal O’Toole, all about it. Yes only a geek would send out an inquiring email about transportation policy in the middle of his vacation, but I guess that’s just who I am. O’Toole tells me that Takako Satoh, the owner of one of Hawaii’s largest taxi companies, holds free market principles that prevent him from doing what his counterparts in other cities like Portland are so successful in doing, lobbying to ban private bus business.

Honolulu does have a public bus system, but not a total government monopoly. The existence of private competition not only adds capacity, but it also brings out a level of quality in its public sector counterpart that the monopoly model we know in the Portland metro area cannot deliver. The ability of Hawaii to serve its most remote small towns better than TriMet serves even larger populations in Estacada and Forrest Grove is made even sweeter than a Hawaiian pineapple by the fact it does so with less tax dollars, demonstrating in vivid terms the kind of reform Portland’s regional transit needs.

Honolulu is not the only city in America without a full government monopoly on bus service. O’Toole wrote an excellent paper comparing them with cities that do which you can read here.

For many reasons, most things in Hawaii are far more expensive than they are Oregon. The cheapest I saw a gallon of milk for example was $5, but for some reason air transportation through Hawaii is cheaper and public transportation within Hawaii is cheaper too. In both cases, the entrepreneurship of the private sector is making this happen. They did build that.

Eric Shierman lives in southwest Portland and is the author of A Brief History of Political Cultural Change. He also writes for the Oregonian’s My Oregon blog. 

  • Hawaii Resident

    Waikiki is not Hawaii and competition and affordability are the two things most sorely lacking in Hawaii transportation. What you saw is the tourist experience where transit costs are kept competitive (for tourists) in order to enhance tourist spending elsewhere.

    • It would be a serious mistake to analytically separate Waikiki where there is the greatest demand for public transportation as not being part of Hawaii simply because there are tourist there. Southern California also hosts a large tourist population and the lack of private bus competition shows. To get a feel for what it is like to ride a bus along Malibu beach compared to Hawaii, we can simply look at Honolulu’s #22 bus which goes down the strip and then heads off to Hanauma Bay. This is one of the few destinations where private buses are not allowed to service. As expected the 22 only goes every 30 minutes and packs riders into a standing room only situation that few people will tolerate more than once. It also fills up so fast that riders can be left stranded, unable to board full buses as they wait in line in addition to waiting for the next departure. This is rational monopolistic behavior common to several routs in east Multnomah County.

      What I found remarkable however, was the frequency of bus service in remote rural areas when the private buses were given legal access. I saw those private buses running on the big island too, which amounts to having a bus service in eastern Oregon.

      You are going to have to forgive the sweeping title of this article which the fine folks at the Oregon Catalyst gave me. The scope of my two observations is limited to air travel and private bus service. No doubt buying, owning, and driving a car is much more expensive, and there are likely restrictions on Taxi service as there are everywhere else. The presence of private bus competition however is both rare and its positive externalities quite obvious.

  • valley person

    Randall O’Toole is the “world’s leading expert on public transportation?” Eric, unless you say you were joking, i think you just ruined your credibility for life.

    • Steve Buckstein

      valley, you misunderstood.
      Eric, didn’t say Randall O’Toole is the world’s leading expert on public transportation. The expert he refers to has only one “l” in his first name. Re-read the piece. Of course the title “world’s leading expert” is somewhat subjective, but Randal (one “l”) is right up there in my book also.

      • 3H

        Eric does refer to Forrest Grove… which must be right next to Forrest Gump?

        But, it’s pretty much par for the course. Make a point of pointing out VP’s error (and why get so snarky — slow day at CPI?) while ignoring Eric’s even more embarrassing error? Perhaps you didn’t notice. Too busy parsing the posts of people who dare criticize Eric?

  • ardbeg

    Eric, sounds like you had a good time. My family and I were there a couple of months ago. We opted to forgo the public trans and rent a convertible 2012 Camaro. “the heartbeat of America!” Total fun! Overall, I think your simplifying the economy of a “Vegas” or a “Waikiki”. Could a Helena Montana or Moscow Idaho operate a private bus system as the one in Hawaii?

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