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Couple pointers:
1. Citizens prefer direct routes
2. Citizens prefer to walk as little as possible
3. More passengers means more profit
4. Trams work best in straight lines
Probably all pretty common sense.
In your case, instead of the circle around the city, I would make 2 straight lines across the city, N-S and E-W. Make sure there is a station in the middle that allows for easy transfer for citizens.
Then I would make sure to only have 1 or 2 trams running on each line...higher frequency is good, but once you add a lot of vehicles you are going to get slowed down. You can add more if there is enough demand.
I would add a bus route that connects the other parts of the city, like an inner square that is also connected to the tram lines, again keep vehicles low
Something I tend to do is to place stops approximately every 2 blocks in each direction, and that seems to work well. Once the city grows you should adjust or increase your lines.
Something else that helps...know where your citizens want to go, and make sure there is a public transport option available, the other cities can be pretty far away, but if your travel time is longer that if they would drive they may choose to drive. You can delete or downgrade roads for this if you want.
That's a lot...hope something helped.
However, fastest way to make money with trams is imho to place a terminal on one location in each of 2 cities and use buses to feed to those terminals. This avoids trams dealing with lots of turns and traffic in the city.
For larger cities the trams can still be profitable providing you keep them on low traffic routes.
My usual strategy is to build 3 terminals per larger town. One per zone. Then use buses to feed passengers to them. I avoid buses between zones so most passengers use at least a bus and a tram to get to their destinations. To kick start a town with new transport I only use buses for internal transport, however, if the town is big enough I usually run 2 trams minimum and roughly 1 tram per 200 population on any inter zone traffic. Otherwise I use timings to keep a route viable between 2 towns. Most such routes are in profit within 2 years.
Workers and shoppers from nearby towns seem to like my layout. So city growth goes up and the trams are usually running at highest speed.
This straight, one line layout seems to be more effective.
First:
Identify the residential, commercial and industrial areas of a city.
Second:
Realise that the residents will only ever travel from their houses to either Industrial or Commercial areas and back. They will NEVER travel from commercial to industrial or industrial to commercial.
Third:
People will only take your transport options if it is faster then driving. So building highways everywhere is bad for you.
Fourth:
Tied into this your own routes need to be quick because the more stops you put on a line the longer it will take for the people to get where they want to go.
With all those rules in mind any tram line you want to build should do the following:
One end of the tram line should be in the industrial zone, the other end of the line should be in the commercial and the residential zone should be in the middle of the line, in a perfect world....
Ideally you build your intercity train stations in residential zone as well.
If you set this up right your tram lines will earn hundreds of thousands a year and your train lines should earn millions.
With that said don't get too hung up about tram lines making money. It's more important that they transport people then make money themselves because they make money indirectly by funnelling people from your trains into the city.
With that said if your tram line isn't making money but your trams are still running full in places that means that the section of your line with lots of people should become its own tram line and the areas of the line where the trams are running empty should become its own separate line.
Also 2 last things to remember:
1. Citizens can't take their car with them so if they need to get somewhere not covered by your network they will always drive even if your network gets close
2. Just because the indicator says a building is in a stations catchment area it doesn't mean citizens will use your network. Walking time does factor into the calculations for travel time and walking is very slow.
Hope that helps everyone.
I think that if the road takes too long due of curves and so on, then the game gives you warning.
Its 4 stops and opposite ways.
I always build a new road to serve as the tram roadbed, and restrict it. I like to use a roadway mod to get something like plain gravel or even no road texture at all, so it just looks like tracks. Unfortunately, as towns grow, the AI likes to upgrade those roads to city streets, so I constantly have to battle to keep the "road" style I want.