Some combination of subsidized public transit and unsubsidized private transit would seem to offer hope for both improving the city's transit system and accommodating the ambitions of van owners and drivers. In fact, the TA, in January 1992, did issue a thoughtful, thorough internal report that considered such options as “withdrawal from markets where vans operate at a competitive advantage” and the “development of coordinated public-private bus service.” The latter option, said the report, is "complex, involving new ways of doing business." Which may help explain why it was not pursued.
It is worth noting that former Metropolitan Transit Authority chairman Robert Kiley, now president of the New York City Partnership, has endorsed just such an idea of a combined public-private bus system—and has despaired of the MTA’s ability to move it forward.
Imagine what our transit system would look like if Kiley had succeeded.