Sunday, August 10, 2008

Profitable Transit, continued

In response to my last post about profit-making bus routes in Brisbane and New Jersey, Pantagraph Trolleypole wrote:

Part of the problem I see with privatization, is that the company is not really accountable to the people and can slash service and raise fares to the point where it's dead.

I completely agree, and I don't think that basic service should ever be dependent on the profit motive. I am not suggesting privatizing existing routes; my suggestion is to allow the private sector to supplement existing routes with new routes and new service.

In many parts of the region there are parasitic "dollar van" services. In Brooklyn many people seem unhappy with them; in New Jersey they are overall well-appreciated. I don't know the Brooklyn version, but here's what I know about the New Jersey vans. By "parasitic" I mean that they use existing facilities, including the Lincoln Tunnel bus lane and the New Jersey Transit bus stops (although they have their own terminals in Manhattan). They operate on a strict cash basis and even make change. Many of them seem to be individually owned and operated, but with a central dispatcher.

There is no fixed schedule. In the afternoons and evenings, they wait in Manhattan until they are full, and then leave. In the mornings and weekends, they go slowly through Jersey until they have enough passengers, sometimes waiting at a stop if they're not full enough, and then head straight for the tunnel. They can get crowded, but not by Third World standards. I've heard complaints about the driving, but in general they seem well-driven.

These are not privatized routes. The vans approximately follow preexisting New Jersey Transit routes. The NJ Transit buses also run on these routes, but they are less frequent and slightly more expensive. Some people will only take NJ Transit buses, some will choose a NJ Transit bus if it shows up at the same time as a private van, and some will take whatever comes first. This means that if the van drivers all go out of business, there will still be a government-run minimum service.

In Brooklyn there have been complaints about private vans unfairly competing with NYC Transit buses. They offered a substantially lower price ($1 per ride in the 90s when the fare was $1.25 or $1.50). In part, they were able to offer that low price because they were under-licensed, underinsured and under-maintained. The NJ vans are well-regulated, and their fares are very close to the NJ Transit fares. If the fares are close, riders are indifferent to who operates the bus, and all operators get ridership.

The MTA seems to be pretty good at adding buses when there's crowding on a route, but if that's not true, I think that private operators should be allowed to start running vans on that route, using the bus stops installed by the DOT.

There are also private bus operators that have started their own routes, such as the local Chinatown buses connecting Canal Street with Flushing and Sunset Park, and the Hasidic buses connecting Williamsburgh with Borough Park. I think that entrepreneurs should be able to set up new routes with a minimum of hassle, and run them for as long as they can afford to.

In the "supplementation" case, the government provides the minimum service. In all cases, the government should regulate the safety of the private carriers, and provide and maintain infrastructure such as bus stops and Quickways. Since Pan mentions the airlines, I should say that I think the situation is very similar (except, I hope, for the disastrous state of the current airlines).


Michael said...

Forgive my relatively uninformed comment, but doesn't that mean that for-profit carriers will pick off the most profitable routes and customers, leaving the government with an even less profitable transit system and fewer resources to move customers?

I think I read that in London they handle this by having "reverse auctions" for entire transit routes, specifying the service requirements and then finding the operator that will require the least amount of subsidy to operate the route.


Cap'n Transit said...

It's a good question, Michael, but you assume that transportation agencies should use the more "profitable" routes to subsidize the ones in less demand. If I'm paying a premium for transit, I'd prefer that that premium go to subsidize other people's rides than to investor dividends, but I think we should be up front about what we're doing. Some people may not agree that it's fair.

The role that I'm seeing for the private sector is in transit expansion. Let's say that there's clearly a market for express bus service from Park Slope to Lower Manhattan through the Brooklyn-Battery Tunnel. The MTA might take months to study the issue and years to buy the buses and hire the drivers, while a private company might be able to have the buses running within weeks, if not days.

I will also add that I'm generally very pro-union, and I would want there to be some safeguards to ensure that private supplementation doesn't become a way to bust unions or lower wages.