Privatization
Posted by Fred Jandt
Editor, Mass Transit
I don’t know how I feel about privatization when it comes to roads and transit. On one hand, I can definitely see the benefits. Our infrastructure is crumbling and this may be the best option to forestall an almost inevitable crisis. And with public transit agencies across the country struggling for funding just to operate, any expansion may be more likely if it was done with help from the private industry.
But at what cost? The Disney piece mentions how the average transit system only covers 40 percent of costs from the farebox and holds that up as a reason for privatization — to get these agencies back on budget. But what other public agency is being held to private industry standards? If your local parks department was to cover 40 percent of its costs through sales of ticketed parking lots, would people be calling for the parks to be privatized? To get the parks back on budget?
The problem going forward as I see it with privatization of any kind is a public view that America is being sold off piece by piece. Instead of I-80, you can drive down the [Insert Big Company Name Here] Tollway. We already have this with most of the major ballparks and stadiums in the country and there is grumbling about that. How about a bus system owned by large company?
The problem with any widespread ideal of privatization is the temptation for misuse. Hey, if the system isn’t hitting the bottom line things have to be cut, or changing routes to serve the needs of a company’s employees. Already major companies like Microsoft and Google are running their own public transit for their employees. I am not sure I want them in charge of all the buses, though.
The overall situation is that money for roads and transit is going away — fast. So is it a matter of adding more or taking better care of what we already have? When I spoke with Fred Gilliam (who has worked for both public and private transit providers) at Capital Metro in
In the end, there are plenty of companies with the funds, knowledge and experience to help the country’s infrastructure come back to where it should have been all along. We just need to make sure that we don’t lose our path along the way and wind up in a bigger mess than we started with.
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March 21st, 2008 at 5:06 pm
Regarding the article on Disney:
Let’s see…. Disney charges $50 per person to get in the park. Once there, you spend $3 for a coke, $3 for popcorn, $10 for a burger, markups of hundreds of percent on merchandise, and hundreds of dollars a night on hotel rooms. And then all Disney does is take EVERYBODY from the same Point A to the same Point B. Comparing that to the realities of real public transportation belongs purely in Fantasyland.
March 22nd, 2008 at 6:50 am
Mass Transit readers deserve a more substantial discussion of privatisation, which can take make forms. Mass Transit systems tend to be natural monopolies, so some form of government regulation is usually required if the operator - whether public or private - is not to abuse its position at the expense of customers. Privatisation, if done well, exposes the differing interests of producers and consumers. It also frees mass transit of the short term games of politicians. Many US bus systems are already operated by private companies, often at substantially less subsidy than if operated directly within government. In the UK, privatisation of the rail system has brought a 50% increase in passenger numbers, while key fares have been kept low both by regulation and market forces. Most intercity and London commuter routes no longer need subsidy. While the North American market is in some wyas less conducive to pulic transit, the dead hand of government control has certainly limited innovation while allowing costs to rise - with the result that consumers get a poorer service, with a higher bill to the taxpayer.