Melissa Thomasson says that what we have combines the worst of the market and the worst of government. Markets are usually really good at controlling costs. When they work best, products come into existence, like cell phones or stockings. They start expensive, and then they get cheaper and better. But markets don't guarantee that everyone can afford the things they need. Government can be good at that, ensuring universal access. But when you're paying for everybody, it's hard to control costs.
I'm not for "controlling costs" when it's a euphemism for giving workers a raw deal, but I am for it when it means reducing administrative bloat, sinecures and abuse of retirement benefits.
Of course, universal access is one of our goals, so any transit system will have to have a "public option" to ensure a minimum level of mobility to get to jobs, shopping, socializing and health care.
Beyond the cost issue, government-run transit systems tend to be bad at customer service and full of bureaucratic inertia. This is also true of corporations, but the worst offenders in that regard tend to be government contractors, public utilities, insurance companies and other entities that are insulated from competition by some kind of monopoly.
Privately run transit operations have the potential to radically remake our transportation system, for a fraction of the cost of publicly-run ones. We just have to provide minimum service, keep the labor issues under control, and work out the proper set of subsidies and incentives to guide the private operators in the right direction.