Caltrain's Bogus Ridership Numbers

On May 15, 2025, SFGate published an article on Caltrain ridership: Bay Area train is red-hot with riders, but trouble lies ahead which claims that Caltrain ridership is way up:

According to new numbers provided to SFGATE, in April 2025, ridership jumped 60% compared with the same month a year prior. That follows a similar spike in ridership in October, when Caltrain reported its weekday ridership grew 54% compared with the same month in 2023.

But the numbers in the article do not support the headline. More from the story:

During April 2019, average daily ridership was nearly 1.6 million people. ... the April 2025 ridership reached 925,000 people.

Commuters riding the train frequently tend to purchase the monthly pass, and Caltrain announced that it had changed how those riders are tallied starting this year. Instead of estimating that each pass represented 26 trips per month, Caltrain is now counting 37 trips. [emphasis mine] The agency said it made the change based on feedback from a 2024 rider survey.

So Caltrain has now boosted the ride count of the 59% of all riders who have Go or monthly passes by 42%! This is a fraudulent tactic to obscure the severity of the ridership decline. Without that adjustment comparable April 2025 ridership would be 741,000 - less than half of the 2019 level. And this ridership falloff comes after spending $2,440,000,000 to electrify the system. In my opinion, the adjustment is unreasonable. Work-from-home has increased from 2019 to 2025. An adjustment  is in order, but in the other direction.

Caltrain officials said at the rate it’s going, the annual deficit would grow to at least $60 million a year starting in 2027.

This "deficit" number isn't the total subsidy needed by Caltrain - it's the amount needed in addition to current subsidies of around $200 million per year. In 2024, Caltrain earned $50 million from fares, parking, and advertising sales. The system cost $194 million to operate plus $58 million in depreciation - $252 million in operating expenses - for a loss of $200 million (made up through subsidies). Subsidies are currently 4X ticket revenues and still aren't enough. 

But that's not the whole story. Caltrain doesn't pay real estate tax, personal property tax, or fuel tax - unlike Uber or Lyft or Waymo. And the traffic disruptions caused by the system cost automobile and truck drivers time and fuel.

The system is in place and working. We might as well ride it to take advantage of the sunk costs and low marginal cost. But it's a drain on the local economy to the tune of hundreds of millions of dollars per year.

Urban commuter rail is an 18th century technology that benefits politicians (who sell control station location, movement of people, and patronage jobs). We need a 21st century transportation system, with cars, jitneys, and buses that are flexible and redundant. We need transportation systems that take people from where they are to where they want to go, when they want to travel. That's not Caltrain.

Heat pump water heater math

My conventional natural gas water heater is 24 years old, and with increasing regulation on the horizon I have been looking into a replacement. My local utility is offering substantial subsidies to convert to a heat pump water heater (HPWH), so I delved into the numbers.

I have two natural gas powered appliances - my home furnace (forced hot air) and water heater (40 gallon tank). So my summertime natural gas usage is exclusively for hot water heating. Over the past four years my summer usage has averaged 5 therms per month. I pay $1.60 per therm of natural gas. That's the sum of Commodity, Distribution, Transport, CO₂ offset, and Cap & Trade. I'm not including the fixed connection charge. Thus a rough estimate of my cost to heat water with natural gas - including offset cost to make my gas usage CO₂-neutral - is $8/month.

My next step is to estimate how much it will cost me to run a HPWH.

The principal argument for modern heat pump water heaters is that they need less energy to produce hot water because they "pump" heat rather than generating it. Specifically, the claim is that a quality HPWH will have a "COP" (coefficient of performance) of 3.

1 therm of energy is approximately equal to 29.3kWh of electricity, so my current gas water heating (which consumes 5 therms of gas) is the energy equivalent, roughly, of 5 * 29.3 ≈ 150 kWh/month. A COP of 3 means that instead of requiring 150 kWh of energy per month, the HPWH will need only 150/3 = 50 kWh/month. My ex ante electrical use roughly fills electrical rate "tier 1" so my marginal electricity rate is 23¢ per kWh. 50 kWh/month means 50 * 0.23 = $11.50/month expected cost for hot water from a HPWH. (Using an average electricity rate of 21.5¢/kWh means $10.75/month). I conclude that a HPWH will cause an inconsequential increase on my monthly cost to heat water.

I don't think I'll need electrical work done - the HPWH consumes 440W on average and so can probably share the 120V circuit that serves my furnace. But the purchase price is far greater than a gas heater - $2000 vs $500-$700 - so there is no chance I will break even over its lifetime, even at a zero discount rate.

I live in a high density suburb and have underground utilities, so my electrical service is generally reliable. Outages are unlikely to affect hot water availability. Again, natural gas gets an inconsequential advantage for reliability.

Two "environmental" arguments are made in favor of HPWH. One is a "climate" claim which puts a negative value on CO₂ emission. But my utility imposes mandatory CO₂ offset and cap & trade fees, so my natural gas CO₂ emissions are fully offset. Furthermore, the extra CO₂ emissions involved in manufacturing the HPWH (which weighs 80 lbs more than the gas heater and includes a compressor and heat exchanger will never be offset by the emissions reductions from operation - if indeed there is any reduction. If I was genuinely concerned about minimizing CO₂ emissions, a far more effective use of my funds would be to purchase CO₂ offsets.

The second environmental argument is air pollution from burning natural gas. That argument is not persuasive either. Most of my hot water usage is in the evening when my electricity is produced by natural gas turbines. A gas turbine electrical generation facility may run cleaner than my hot water heater, but generation and transmission losses probably make the net difference minuscule.

The question I'm left with is - why is the City subsidizing this conversion?

Everett / Middlefield Improvements

A post I wrote for the local neighborhood group - 29 July 2014

Jonathan Seder from Fulton Street

A large number of collisions shows that dangerous conditions exist at the Everett Avenue / Middlefield Road intersection in Palo Alto. Several changes have been proposed over the years to improve these conditions. The following list incorporates suggestions from replies below:

1. Four-way stop: This is inexpensive to install but the colossal backups it would cause on Middlefield Road make it a non-starter.
   
   
2. Traffic signal: These are very expensive to install and to maintain, and the City is very reluctant to install them. From a neighborhood point of view, they increase noise and congestion and air pollution, and actually will encourage cut-through traffic. Traffic signal synchronization on two-way streets is generally impossible, and closely spaced signals on two-way streets totally disrupt traffic flow and increase congestion - think of the areas around Ikea, and Redwood City Costco, and indeed Middlefield between Homer and Lytton. We do not want to do that to this stretch of Middlefield Road.
   
   
3. Turn restrictions: Allow only right turns from Everett Avenue onto Middlefield Road. This is inexpensive and would have several benefits: it would smooth traffic flow on Middlefield, reducing noise and air pollution in our neighborhood; it would discourage if not eliminate cut-through traffic. There are a couple of disadvantages: drivers not aware would have to weave through the neighborhood to get back on track; and local residents will have to detour, probably to Lytton Avenue. If this option is implemented only with signage, it will require random police enforcement.
   
   
4. Turn restrictions enforced with tubular reflective channelizing devices installed down the centerline of Middlefield Road. This would also block left turns from Middlefield onto Everett Ave. It would be more effective than III but require more detours by residents.
   
   
5. Completely block Everett Avenue on the southwest (Stanford) side of the intersection with a permanent barrier (possibly located at Byron or Webster). This will greatly reduce cut-through traffic on Everett. Downtown North drivers will have a shorter detour via Hawthorne. This change will have complicated effects, not necessarily improving matters overall. [Thanks Dan]
   
   
6. Completely block Everett Avenue on the northeast (101) side of the intersection. This will require long detours by residents, and would tend to shift traffic onto Palo Alto Avenue. A significant number of motorists will continue to attempt the dangerous left turn from downtown North onto Middlefield. [Thanks Dan]
   
   
7. Middlefield Road currently narrows to one northwest-bound lane near Palo Alto Avenue. If that narrowing was shifted upstream to the Lytton/Everett block, turning traffic would have to negotiate only three lanes of traffic rather than the present four. This might offer minor improvements at Everett, but would exacerbate congestion generally on the Middlefield corridor.
   
   
8. Other traffic calming measures, such as speed tables, speed bumps, islands at Fulton / Everett and Fulton / Guinda, four-way stop at Fulton/Everett, radar speed indicator on Middlefield Road, and calming in Downtown North to reduce Everett cut-through traffic.
   
   

The City Council is most likely to fund an alternative that has broad neighborhood support and is acceptable to the City staff. Can we all get behind one option? Thoughts?

Legal Victories

I got a surprise in the mail today - notice of a settlement in a class action lawsuit about Bank of America's flood insurance policies for the years 2008-2013.

I bought my home in 1997 with a loan from Bank of America. A few years later - around 2000 - FEMA created a "special flood hazard area" (SFHA) which included my property, and because I had a Federally-insured home loan I was required to carry flood insurance. For the first few years, my premiums were very modest. But as they climbed, Bank of America's requirement that I carry the maximum coverage available became quite expensive. Starting in 2005 I argued in complaints to the bank that 12 CFR §339.3(a) required insurance coverage only in the lesser of the loan balance and the maximum amount available. Bank of America, however, asserted that they could require me to carry the maximum coverage amount regardless of the loan balance, and wouldn't budge from that position.

The bank said that this language in my loan papers allowed them require any insurance they wanted:

Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by... any other hazards, including floods or flooding, for which Lender requires insurance. ... This insurance shall be maintained in the amounts and for the periods that Lender requires. ...

They backed up that threat by saying that if I didn't buy it (for $335 on the open market), they'd buy it for me and charge me $2,087.50!

I filed a complaint with the Comptroller of the Currency, but they declined to intervene.

In 2010, the underwriter for the insurance company finally noticed that my home was in an SFHA and my premium jumped from $335 to $1,555. I paid that, and paid $1,633 in 2011 and 2012, and $1710 in 2013. Late in 2013 when the premium hit $1,820 I paid off my mortgage (even though the rate was only 2.25%) and canceled my flood insurance.

In today's settlement notice, Bank of America agreed to pay $31 million to settle claims for abuses related to flood insurance. Two-thirds of that amount will be divided among people who had exorbitantly overpriced insurance forced on them, and people who (like me) were compelled to buy more insurance than they wished.

I hope to get something out of this personally. But mostly I am discouraged. Bank of America was once a great company with a real consumer focus. A. P. Giannini made retail banking part of the average consumer's life. By building a large branch network, introducing MICR check automation, and developing the modern credit card Bank of America brought great benefits to many people. But in this area, at least, the company seems to have lost its way.

This was one of just two times in recent decades I was treated poorly in a business dispute. The other incident involved PayPal.

I used PayPal to buy a $58 bicycle trunk bag. That and two other items were left at my front door one day. Two of the three items were stolen. (A spray bottle of raccoon repellent was left behind.) One package was purchased with a credit card and delivered by UPS; that vendor immediately shipped a replacement. The other package was purchased with PayPal funded with a checking account and shipped via the US Postal Service. Because USPS delivered the parcel, the vendor refused to offer any replacement and wouldn't budge. The vendor hadn't offered me the option of buying postal insurance - but in any case postal insurance protects the shipper, who pays for it and makes any claims for loss.

I did a little research and learned that under the Uniform Commercial Code, when a merchant sells to another merchant, title passes when the goods are delivered. But when a merchant sells to a consumer, title passes when the consumer "takes possession." On this basis - and also under PayPal's satisfaction guarantee which promises the same benefits as a credit card purchase, I filed a complaint. PayPal denied it.

I sent my complaint along to the Santa Clara County Consumer Protection Unit, part of the District Attorney's office. A few weeks later I got a telephone call from a staff lawyer there who said that she believed that I was in the right legally. She had argued the case on my behalf with PayPal but they refused to budge. She said that I could try in small claims court, but the dollar amount probably didn't justify the time and effort. Surprised and grateful for her help, I thanked her -- and removed my checking account as a PayPal funding source.

To my great surprise, several years later I received notice of a class action suit for cases where PayPal's protections did not match those of credit cards. I filled out the paperwork and to my greater surprise eventually received a check for $86!

So two times I have been frustrated in pursuing modest claims against big businesses and in both cases my arguments were eventually vindicated through class action lawsuits. Perhaps businesses should take my complaints and arguments more seriously - they'd save a lot of money in legal fees and settlements.

We'll see what happens with my new Whirlpool refrigerator, which after three service calls still doesn't get cold.

Eligible for a "catastrophic" plan?

I read last night that the twenty million people whose individual health insurance plans terminated because they didn't meet ACA requirements for a "comprehensive" health plan can now qualify for a "catastrophic" health plan - if they are "having trouble paying for a new plan".

Previously there were twelve criteria for "catastrophic coverage" eligibility listed at https://www.healthcare.gov/exemptions/:

1. You were homeless.
2. You were evicted in the past 6 months or were facing eviction or foreclosure.
3. You received a shut-off notice from a utility company.
4. You recently experienced domestic violence.
5. You recently experienced the death of a close family member.
6. You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.
7. You filed for bankruptcy in the last 6 months.
8. You had medical expenses you couldn't pay in the last 24 months.
9. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.
10. You expect to claim a child as a tax dependent who's been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you do not have the pay the penalty for the child.
11. As a result of an eligibility appeals decision, you're eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren't enrolled in a QHP through the Marketplace.
12. You were determined ineligible for Medicaid because your state didn't expand eligibility for Medicaid under the Affordable Care Act.

These criteria are bizarre! Note that some of them might be due to carelessness (utility shut-off notice) or not involve actual financial stress ("increases in necessary expenses").

But the new announcement adds a thirteenth and most bizarre criterion - bizarre because it acknowledges that ACA itself can create hardship from which only ACA exemptions can grant relief, and because the exemption hinges on an individual's belief:
    13. Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.

"You believe other plans are unaffordable"? The ACA has turned into a faith-based initiative? Are thought police going to investigate beliefs?

My Kaiser coverage terminates at the end of the year because it doesn't meet ACA standards. I signed up for a new plan with Anthem Blue Cross and just mailed the check for my first premium. But I emphatically believe that Marketplace plans are unaffordable. I also think they are poorly designed and provide perverse incentives. But how can I block the plan I just paid for and switch to a "catastrophic" plan?

And just who is running this show, and how on earth do they think they can arrange things this way?

Update: I just received an e-mail from Representative Anna Eshoo trumpeting this latest enhancement to ACA. She included a link to the Hardship Exemption Form.

This form has somewhat different langugage: "You may qualify for a hardship exemption if you experienced one of the following:" ... "13. You received a notice saying that your current health insurance plan is being cancelled, and you consider the other plans available unaffordable." "Consider" rather than "believe." What kind of criterion is that for granting an exemption?

Predictably this form asks you to identify yourself as Hispanic/Latino (Mexican, Mexican American, Chicano/a, Puerto Rican, Cuban, or Other) or White, American Indian or Alaska Native, Filipino, Vietnamese, Guamanian or Chamorro, Black or African American, Japanese, Other Asian, Samoan, Asian Indian, Korean, Native Hawaiian, Other Pacific Islander, Chinese, or Other. This is beyond offensive! What does this have to do with deserving a hardship exemption?
 

Letter to my Representative about the Affordable Care Act

270 Fulton Street
Palo Alto, California 94301
November 13, 2013

The Honorable Anna G. Eshoo
698 Emerson St
Palo Alto, California  94301-1609

Dear Representative Eshoo,

Thank you for your letter of November 8 and your e-mail of November 11, 2013. I am impressed by your emotional commitment to the Affordable Care Act, but I repeat my observation that it is an economic and medical disaster.

The new "comprehensive" plan I am now required to purchase costs $4100 per year more than my old plan, which had a maximum annual out-of-pocket of $5000. There is no scenario in which I personally am not damaged - by thousands of dollars a year. You repeat the patently false assertion that "nothing in the ACA required your insurer to cancel your insurance policy." But mine was exactly the kind of plan that ACA was designed to ban - my old plan gave me an incentive to look for value in my medical care, and take responsibility for my own health. It was very precisely ACA-mandated modifications than canceled plans like mine and drove my premium from $295 per month to $637.

You make many claims in defense of ACA - but if you think about them, none make any sense:

• A ban on lifetime caps is a barrier to a robust, affordable health care system - exactly the opposite of what you suggest.
• Banning discrimination based on pre-existing conditions invites adverse selection, and is an incentive to not get a health plan - exactly the opposite of what you suggest. Healthy people - most of the population - can now join the health insurance system only if they get sick.
• Bankruptcy is the appropriate outcome for people who accept medical care they can't afford. It clears the books and allows them start afresh. Making that a general obligation provides yet another perverse incentive to not save, to not buy health insurance, to not be a responsible person.
• Preventive medicine (like cholesterol screening) is a waste of money: the scientific evidence on this is clear. Also, preventive care and screening do not have the characteristics of insurable expenses. Mandating this coverage for all people is an example of how the ACA unnecessarily raises health care costs, increases demand without regard to supply, and encourages wasteful overtreatment. Removing copays makes this mistake even worse.
• Pediatric dental care involves small and predictable expenses, and is a direct result of a decision to have children. It has none of the characteristics of an insurable risk. I raised three children and their dental bills were just one of many predictable costs. In contrast, cancer treatment is relatively rare and expensive, and thus suitable for insurance protection and risk-sharing. I am surprised that you confounded these two very different problems.
• Your statement that the ACA "requirement" that people have "comprehensive health insurance… makes insurance more available and affordable for people who are likely to have such costs while creating incentives for people who might have high-cost health needs in the future to get coverage" is nonsense. In fact, "comprehensive" health plans are a priori less affordable. The ACA creates incentives for people who don't need insurance now to avoid expensive coverage and instead pay (or not pay) a modest penalty. This will make coverage less and less affordable in the future as adverse selection dominates the insured population.
• The requirement that "insurers have to spend at least 80 percent of your premiums on actual care, not overhead costs" is merely protection for incumbent insurance companies (whose shares have been climbing steadily thanks to your largesse). It is a throttle on innovation and investment, and a long-term guarantee that health plan costs will rise. I wish you would promote the wonderful American economic system, rather than attacking it. And if you are going to attack business profits, I hope you will be fair about it and also attack Apple and Intel and Google.
• The ACA doesn't offer any new "investments in public health." Indeed, it has many clauses that will reduce investment - by taxing medical equipment and by capping profits.

I hope you will take some time to defend the substantial marriage penalty and extraordinary effective marginal tax rates imposed by the ACA. If two single people each earning $20,000 per year marry, they lose a healthcare subsidy of $1269 per year - and that's on top of various other marriage penalties that fall particularly heavily on families struggling to climb the economic ladder. It is monstrous to promote a system where people are actually better off keeping their income low - but that's exactly what the ACA does, in too many cases.

The ACA will be the direct cause of huge increases in health care costs. It arms more and more people with third party reimbursement. It punishes the poor. It discourages high deductible health plans which gave consumers an incentive to seek value for our healthcare dollars. It has cut worker hours and eliminated jobs.

Here are some ideas for sensible health care reform:

• Give individuals the same favorable tax treatment for insurance premiums that employers have.
• Require employers to list health care benefit costs on the W-2, so employees can decide whether they actually want their compensation to go to gold-plated health plans.
• Give Alabama, California, and New Jersey incentives to harmonize HSA tax treatment with Federal law.
• Allow insurance companies to cap coverage. If we have the moral and political will to fund extreme and tragic cases, then let the government explicitly reinsure these risks.
• Require hospitals to post price lists and quote firm, all-in prices.
• People who pay cash in advance for health care should always get the best price.
• Require significant copays and coinsurance in all health plans - including Medicaid - so all consumers have an incentive to seek value. Apply the copays to check-ups and screening; let consumers decide if those are worth the money. Exempt only public health benefits like vaccinations. Apply excise taxes to "comprehensive health plans" to discourage their use.
• Strengthen the old "guaranteed issue" rules where anyone with continuous "creditable coverage" is guaranteed an affordable policy subject to cohort-based underwriting.
• End the mandate requiring insurers to allow children to stay on their parents' health insurance plan after age 18. We as a society want to encourage young people to form their own households and take responsibility for their own lives.
• Pediatric dental care and normal maternity care offer important societal benefits - but these do not have the characteristics of insurable expenses, and they should not be mandated coverages. Any subsidies should be provided through tax credits or a comprehensive welfare system.
• End coverage mandates for acupuncture, experimental therapies, talking psychotherapy, chiropractic, on-patent drugs, and other medical treatments that are not essential to good medical care. Allow these items to be covered optionally. Also, encourage optional coverage with separate pricing for expensive therapies with marginal benefit, like left ventricular assist devices, bone marrow transplants, and so on.
• Remove the marriage penalties and discontinuities in subsidies to low-income people. There should always be a positive financial incentive to marry (and never a positive incentive to divorce), and no person with below-median income should ever face an effective marginal tax rate higher than 40%.

Over the next few years we will all see how your changes to our health care system work out. You as a Member of Congress have exempted yourself from the system you created. I am very sad that I was not able to do the same, and I am quite certain that my grandchildren and yours will not get good medical care unless the horrific "Affordable Care Act" is reversed.

Thank you for your consideration.

Obamacare and the war against the poor: marginal thinking

I just visited the Kaiser Family Foundation's subsidy calculator at http://kff.org/interactive/subsidy-calculator/ to see what effect PPACA ("Obamacare") does to marriage incentives.

• A single parent with one child who earns $30,000/year gets a $2,688 subsidy. Two parents with two children who earn $60,000/year get $3,719. By marrying, they lose $1,657 a year in after-tax dollars.
• A single parent earning $15,000 qualifies for Medicaid, a subsidy of roughly $4000. A single parent earning $45,000 gets a $341 subsidy. By marrying, they lose more than $4000 in non-taxable subsidy dollars.

This is on top of the hundreds of other marriage disincentives built into the Federal income tax system, the welfare system, food stamps, and every other government program designed to "help" the needy.