Monday, February 9, 2009

What does Profitability Mean?

I've been thinking about profits and subsidies, in light of the statement made by The Transport Politic:

The overriding point, though, is that the meaning of the word "profitable" itself is subjective.


The TP is correct, so what do we mean by it? My first thought is that what I'm trying to capture when I talk about profitability is independence from subsidies. Of course, as I wrote in my last post, no form of transportation is truly independent from subsidies.

What I'm really talking about is avoiding the current mess described in that Times article everyone's been linking to. In other words, being independent of the current wave of budgetary crises that's been swamping transit systems all over the country. Let's look back at our goals:



If we want transportation for all, and if we want people to chose transit (leading to lower pollution, greater efficiency and more robust social structures), we need transit to have a stable funding source. Otherwise it'll always be prey to the Kit Bonds and Gavin Newsoms of the world.

There are essentially two ways to get - and keep - anything in this world: independence and power. If you have power, you can elbow out the others at the table and grab your share. If you have independence, you can get what you need all by yourself and keep the jackals at bay.

Transit has more power than it used to; otherwise, the funding levels discussed in the stimulus debate would be closer to ISTEA levels. But that power is currently shallow and unstable, and thus highly dependent on which party controls Congress. Truly powerful transit would be almost as important to Republican politicians as it is to Democrats.

I think that's why I like talking about privately run, profitable transit: not so much because I have some mystical belief in the value of entrepreneurship (please!), but because it's an indicator of power and independence. If a private bus line can demand - and receive - millions in subsidies from the government, it's got some power, and the state-run transit agencies that work with it have a similar level of power. If a private bus line can thrive without any direct subsidies, it's got some independence, and we could expect that public transit agencies operating in a similar environment would have similar amounts of independence.

That said, we don't want organizations to have too much power or independence, because that undermines democracy. Too little power and independence, and you have chronically cash-starved agencies cutting service left and right. Too much power and independence, and you run the danger of corrupt officials getting rich, or some day perhaps of having too much transit in the wrong places.

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