Sunday, May 16, 2010

What transit needs from government

Jarrett has a helpful comment on my last post about the difficulties of cross-subsidy. Okay, so maybe you're all not quite on board with privately operated transit, but I hope I've shown that public transit can never reach its full potential of drawing people out of their cars, at least as long as government is also subsidizing driving. As I've said numerous times, private transit cannot bring us to our goals without significant government involvement. I want to summarize the ways.

  1. Enforcement. We need minimum standards of safety and responsibility. Transit providers need to be adequately licensed and insured, and to follow employment and traffic safety laws.

  2. Coverage. Some routes and schedules are necessary to provide access for all, or to complete a network so that other routes become useful, but are uncompetitive with private cars on even a basic two-lane paved road. If we want access for all, it has to be done by the government.

  3. Speed boosts. Buses have an inherent time disadvantage against private cars in stopping for multiple passengers. Government can compensate for that disadvantage by providing quickways that allow buses to get to the front of the line, recognizing their greater value.

  4. Loading, terminal and depot coordination. One thing that private buses do badly is loading. Bus operators have killed each other over access to passengers at the curb. Many of the recent complaints against buses in Lower Manhattan concern the loading of passengers and the storage of buses by private operators. Government needs the authority to regulate this properly to ensure a level playing field that promotes transit and avoids backlash.

  5. Fare coordination. Incompatible fare systems allow operators to compete at the expense of passengers. Government can provide a single payment system that allows for transfers, TransitChek and other advantages.

  6. Route and schedule planning. Is this necessary beyond coverage requirements? I haven't made up my mind.

Am I missing anything?


BruceMcF said...

For the most part, only government can collect the payment for the benefits of transport from the beneficiaries other than the passengers.

Rather than operating surpluses from a route cross-subsidizing other routes with operating losses, the ideal would be a government payment for coverage in terms of quality of availability per resident, and a government payment per passenger mile for secondary benefits of transport, and then the public transport authority should run those routes that are viable on the basis of coverage, transport benefit, and fare payments, with dial a ride covering those areas for which fixed scheduled routes are not viable.

Under that system, unless the profit is due to being in a boom period of the business cycle, in which case some should go into a stabilization fund, a route that is by mistake operating at a profit is underproviding, and should have its schedule extended or frequency increased until it gets back down to break-even.

Jarrett at said...

Coverage services tend to be relatively local routes that feed into the frequent and rapid network. They also tend to be too infrequent to determine many people's locational choices. So they probably are the aspect of operations that would be most easily privatized, though my own view is that their local nature makes them amenable to municipal operation, which can help integrate them into the local policy of suburban cities.

But how would you privatize the planning of buses running in major corridors like the new First/Second Ave bus lanes? Do you want multiple operators running along those corridors? If so, what happens when the corridor reaches capacity. When MTA has that problem, they can study it and implement a solution. When a multi-operator corridor without central control has that problem, the operators just point at each other.

Real multi-operator operations in the developed world tend to end up requiring a lot of inter-operator co-operation to get anything done in infrastructure terms. That, in turn, can look like collusion. Far better to just leave in the public sector all the functions that just can't be done competitively, including the planning of the networks, especially where network design is expected to lead to land use and/or infrastructure impacts.

Unknown said...

Bruce, you said:

"a route that is by mistake operating at a profit is underproviding, and should have its schedule extended or frequency increased until it gets back down to break-even.

Typically, when a transit line increases either frequency or extended hours, that tends to increase ridership.

It would be an open question if ridership was rising fast enough to cover the cost of increased operations. Beyond a certain frequency, I would tend to expect not. But I would anticipate that bumping frequency from 30 minutes to 15 minutes would more then double ridership.

Helen Bushnell said...

You mention that government subsidizes driving. Most people use whatever form of transportation receives the most subsidies.

Cap'n Transit said...

That's not entirely true, Helen. Some government programs are more efficient than others. People will use whichever form of transportation provides the most value, and that depends on subsidy levels, but only in part.

BruceMcF said...

@Matt Miller: if the line is profitable at a given frequency and raising frequency provides increased patronage that provides greater incremental revenues than the incremental costs of those services ... a profit seeking organization would go ahead and put that frequency in place.

The point is rather that once you hit the most profitable frequency under a situation with other beneficiaries of the transport free riding on the backs of passengers, then clearly in terms of broader economic benefit the service is being underprovided, and that transferring revenues to the system that correspond to the third party benefits they are providing would allow them to provide a additional services with economic costs well justified by the economic benefits.

That is, of course, assuming that there are not substantial externalized costs. Our system is rather one for finding out which mode of transport is most effective at externalizing its costs, and going with that one.

saosebastiao said...

All forms of transportation have external costs.

Shifting existing transportation to mass transport would be a net reduction in externalities from the current status quo.

But quantity demanded is a function of price. If, by subsidizing transit, we both take market share away from driving AND increase total demand, then the net effect of the externalities will be unknown, and could very well be a net increase.

The idea that subsidizing transit can overcome the negative externalities of other forms of transportation is misguided. It is like fixing mold problems by painting over them. At best they can fix modal shares, but most of the time they will result in a really bad allocation of resources.

The better idea is to work to effectively quantify and price externalities through pigouvian taxation. Once externalities are internalized, markets can work out resource allocation efficiently. There will be no need to have bureaucratic control to try to micromanage modal share according to their prejudices.

George K said...

"a route that is by mistake operating at a profit is underproviding, and should have its schedule extended or frequency increased until it gets back down to break-even"

Just because the route is making a profit doesn't necessarily mean that it is underproviding. For example, it can act as a shuttle service. For example, the Bx12 has an operating cost of $0.93 per passenger. Even though it connects to several subway lines and probably has a lot of transfers, it is a long enough route to have enough passengers paying the full fare that it turns an operating profit. That doesn't necessarily mean that it is underproviding. It may be overcrowded in sections of the route, but overall, it still benefits the people. The people should decide what is benefitting them. If every route ran with only a seated load on each bus, very few routes would make money. It is up to the people to tolerate how crowded the buses are.