Public or Private?
Three agencies share their experience with contracted employees and in-house employees.
A poor contractor can drag their feet when it comes to providing good service to passengers and can hire drivers that have a higher accident frequency rate than average. Even if the transit agency does not have to pay for the actual damage in an accident, the public sees their buses involved in accidents and perceives that the public transportation is unsafe. At SunLine, we have an intense on-going safety program to ensure the safety of passengers and operators.
SunLine has had past experience in using contracted employees in transit. For approximately 10 years, SunLine contracted with Mayflower and Laidlaw to provide paratransit service to the Coachella Valley. In September of 1999, SunLine purchased new vehicles and hired in-house employees.
All in all, from our experience of in-house operation versus contracted operation, although the ultimate costs may be higher, we believe it’s worth the expense. The service is directly managed and changes can be put in place to immediately correct an issue. In addition, the employees are accountable for their actions directly to transit management. Employees who do not perform to the standards of the agency can be disciplined and removed from service quickly. Those who perform to standards can immediately be rewarded for superior performance. When all operations are in-house, the agency gains a great deal of control of daily operations, the condition of their vehicles and the service to our customers. Here at SunLine, our goal to each of our passengers is to provide safe, reliable transportation. With our in-house staff, we believe we are accomplishing our goal.
Going Private
In the case of Foothill Transit, our administrative management is contracted to Veolia Transportation. The work done by the Veolia Transportation Management team includes many of the activities often performed by public sector staff. As private employees, we are able to provide our parent company with insight into the needs and challenges of an area of transportation that is normally governed by public employees. And in turn, Veolia is able to provide us with a broader perspective on the needs and challenges of the operations side of transportation. This professional give-and-take enhances our agency’s ability to respond quickly and intelligently to issues. It also allows us to be proactive in recognizing trends and avoiding pitfalls.
By bringing a private sector business perspective, we are constantly focused on the bottom-line impact to customers. That customer-focused approach forms the basis for how we put service on the street. By minimizing bureaucracy, Foothill Transit has greater flexibility and faster response time in meeting public need.
This flexibility allows for streamlined management functions. This is especially apparent in procurement, where accountability is balanced with efficient timelines that allow us to stay goal-oriented. This is the result of employing best business practices acquired through our private-sector business culture and is not something commonly associated with public agencies. At the same time, appropriate safeguards are in place to ensure accountability in the investment of public resources.
An added benefit to the agency is reduced risk overall. The contracted functions of the administration and operations are handled fully by those contractors. For example, that includes all personnel management covering hiring, benefits, pay, incentives and training. The contractor assumes the risks associated with its staffing functions. In addition, it assumes the liability risk of operating transit services. The agency keeps a firm control on costs via the contract giving the contractors incentive to operate safely and efficiently while providing a high-quality service in a competitive field.
As all parts of the agency are contracted for finite terms, there are regular bidding cycles that need to be executed in order to ensure that the agency is employing the most suitable vendors for the job. Some of the challenges associated with this include diminished continuity, instability due to possible contract changes, and possible distraction from the agency’s core mission — hopefully for only a short period of time while the transition, if any, occurs.
