Traffic density of passenger railway services
Before the privatization of JNR, some local public transportation services suffered a drastic drop in demand. The changes were attributed to depopulation of local communities and increased use of motor vehicles. The deficit incurred from these lines was one of the factors contributing to the deterioration of JNR management. In 1981, lines with little prospect of balancing the budget even after streamlining management were defined as local routes and encouraged to convert to bus service. The yardstick used when drawing the line was the concept of transportation density, which is the number of people transported per day per kilometer of railway route. Local routes are those with a transportation density of 4000 or less. However, some small to medium private railways are breaking even with a transportation density of 2000.
New local railways
Before the privatization of JNR, the management considered converting railway lines with low demand to bus service and suspended construction of planned new routes. The construction of some such routes was approved for service to be managed by local governments under the Third Sector system, which is a railway by joint public-private sector funding. Japan Railway Construction Public Corporation resumed construction following the privatization of JNR. These routes are called new local railways. About 20 lines, including the Akita Inland Railway and part of the Sanriku Railway, have already opened for operation. Three more lines are currently under construction.