I love to take train rides. Right now, I am on an ICE 4 from Berlin to my hometown Tauberbischofsheim. The ride is fast, comfortable and I am able to work (even wifi works).
I am not the only one devoted to trains. In Germany, the number of travellers by the Deutsche Bahn AG (DB) has increased year by year: from 1.785.000.000 passengers in 2005 to 2.603.000.000 in 2019. With no end in sight (just interrupted by the pandemic with only 1.499.000.000 passengers in 2019).
But still, riding the train takes a small proportion of transportation. Only 10% of all kilometres travelled in Germany are done by train (83% car, 6% bus, 1% plane). At least, the market share of rail is slowly growing.
So what does the future of the railway look like? My guess, it depends on how capable we are to restructure the railway system.
Historically, most countries had chosen policies that restrict competition between rail companies. As a result, for decades, there was an ongoing shift from rail to road. There was competition on the road (between truck companies to transport goods and between carmakers to transport people), but no competition between rail transport companies (there was just one).
This development has stopped. The railway monopoly in Germany ended in 1994 when the Deutsche Bundesbahn and the Deutsche Reichsbahn (from the former GDR) became the Deutsche Bahn AG and competition was allowed. Now there are 447 approved railway companies in Germany.
The former monopolist Deutsche Bahn is still by far the largest railway company in Germany. But rivals grow. In the rail freight transport sector, the market share of private companies other than the DB has risen to 54%; in the regional traffic sector it is just 35%; and in the long-distance rail transport sector it is 4%.
It is still a long way to more competition. Privatization was pursued only half-heartedly. The Deutsche Bahn is still owned by the state, and there is no political will in sight for change.
Yet it is, from an economic point of view, pretty clear what to do: Separate the infrastructure from the service! There is no competition possible between track construction companies. Therefore the state should provide (and expand) the rail network. The competition for passengers would do the rest for a prosperous future of train journeys.