When a merchant must purchase extra land or build a garage so his customers can park, he must pass that cost on to them by raising prices. He breaks even, but his customers have to pay for that garage even if they walk. They do not have a "choice". That is a subsidy, a subsidy paid by non users of a service to the industry that provides it. There are hidden costs like this embedded in everything, and they are usually ignored in the free-market calculus.
A mass transit system might run at a loss, but when these hidden costs are summed up in terms of the true savings, it might look a lot more economical in the long run. The costs to the society of the automobile are enormous, they are paid by everyone, whether they drive or not and they are not covered by gasoline taxes or other user fees.
I know it may be an oversimplification, but it could even be argued that if we didn't need to secure overseas sources of petroleum we wouldn't need a dozen carrier battle groups.
Off Topic » in reply to Key word being "choice."
Subsidies come in many colors.
