Private enterprise involvement in public transit declined precipitously after WW2. Despite efforts by Congress and the FTA to re-engage the private sector during the 1980s and early-90s, fixed-route service is typically owned and operated by public transit authorities with only about 6 percent being contracted out. The picture is somewhat different for paratransit demand-response service that proliferated with passage of the Americans with Disabilities Act (ADA) in 1990. Roughly two-thirds of ADA-funded services are contracted out (NRC Special Report 258). Significantly, fixed-route and paratransit operations for the same service area are generally funded, planned, scheduled, dispatched and operated as separate entities.

This situation is likely to change soon, although there are still significant legislative, attitudinal and political barriers to be overcome in the process. First, the FTA legislation affecting transit is to be renewed as of 2009, and the jockeying of interests has already begun. More importantly, there are deep and fast-paced societal changes that will force new approaches to service.

An aging population will increasingly demand “accessible” service, while most likely generating less revenue for it. Demand for new transit service to low density suburbs designed for cars, not buses, will cause a rethinking of how that service can be provided. Increasing fuel and labor costs will motivate the drive for operating efficiencies. For these and other reasons, it is probable that the separation of fixed-route and paratransit operations will continue to break down, and that there will be a rethinking how the private sector can be re-engaged in contract service. At the same time, automation of many areas of transit management, scheduling, dispatch, operation and rider information will continue.

INTEGRATED SERVICE
While the norm in many other countries for quite a while, combining fixed-route and demand-response service in an integrated plan is catching on in North America.

Typically, a combined service plan operates transit vehicles on predetermined schedules along fixed routes, serving corridors with significant ridership. Meanwhile, privately owned smaller buses or vans bring passengers between the surrounding areas and exchanges along the fixed routes.

Essentially, these privately owned demand-response services function as “group taxis.” In much of Latin America, they are known as “colectivos” and in some cities, such as Rio de Janeiro and Mexico City, colectivos handle a major share of total transit trips. Similar services carry large volumes of riders in Africa and Asia, in many places competing with fixed-route service. Pick-ups and drop-offs are arranged informally, often with the driver for the next trip, although cell phones are increasingly used for making reservations. Although the fact that this kind of service is pervasive throughout much of the world speaks for its fundamental viability, there is a wide range in the quality and safety of service, determined to some extent by the local regulatory environment.

The fixed-route component of combined service in other countries is much more of a mixed bag than in North America. In many cities, there is a combination of publicly and privately owned transit, with varying degrees of regulation in the private side of the industry.