What you get when you make hasty generalizations

On Monday I pointed you to a Times op-ed by Elliott Sclar and Robert Paaswell, and observed that they chose to focus on the private transit systems of third world cities like Calcutta (which in that particular spelling is practically shorthand for crowds and squalor to most Times readers) and ignore the reasonably clean and safe vans in New Jersey and Chinatown. Last night I showed how this guilt-by-association game leads to a number of erroneous conclusions.

First, I want to discuss one bizarre point in the op-ed, the parenthetical aside in this paragraph:

Indeed, even though the van companies are already operating on the former bus routes, the Taxi and Limousine Commission has not added enough personnel to cover its new regulatory responsibilities. (It’s worth asking why, if such funds were available, the city shouldn’t reinstate some of the bus routes instead).

Sure, it's worth asking. There are no dumb questions. But an answer comes to my mind pretty quickly: one TLC enforcement agent can monitor several routes. One agent is a lot cheaper than the number of bus drivers needed to run all those routes. So it's worth asking why, if I answered this question right away, the guys who run two prestigious academic institutes couldn't come up with the answer before their op-ed went to press. My guess is they didn't want to know, and they thought it would make them sound clever. Not exactly.

Here are a few more of their erroneous conclusions, which happen to result from applying their selective methods to perfectly accurate observations. Sclar and Paaswell are correct that appropriate regulation is necessary for transit to be an effective tool for achieving our goals. But they make a mistake in conflating public ownership and regulation. In reality these are not the same thing. You can have poorly regulated government enterprises; the MTA is often said to be one. You can also have well-regulated industries that are privately owned, like restaurants. If the authors are Communists who believe that everything should be run by the State, they don't say that upfront, and if they're not Communists they don't make a good case for transit being treated differently from food preparation.

Once established, Sclar and Paaswell argue, transit providers can become organized and entrenched, protecting their interests at the expense of the public. They are correct here: I can think of one city in particular where a "cartel" of transit operators has jealously guarded their monopoly even though the public winds up paying more money for less service. Unfortunately for their argument, it happens to be our city, and the cartel is the Transit Workers' Union. They may not engage in the kind of violence that the authors breathlessly related, but they are certainly succeeding in stifling innovation and impeding efficiency measures.

In this op-ed, the argument I'm probably the most sympathetic to is the one about employee wages and hours. I strongly believe that everyone deserves a job with decent pay for a reasonable workday. But it doesn't make sense to fight this battle in every workplace. Transit cannot shoulder the burden of social justice by itself. There are other social goals that I consider more important than maintaining the wage levels of unionized public-sector transit workers. What does it matter how much you're earning if you spend most of it on Metrocards, or if you're obese, your wife gets run over, your kid has asthma, or your house gets flooded.



I am also troubled by the hours worked by van drivers, but I'm equally troubled by the amount of overtime racked up by MTA workers. I don't want to see anybody overworked, no matter how much they get paid for it.

In contrast, Sclaar and Paaswell don't seem concerned at all about the amount of overtime that MTA operators are working. That makes me think that they don't really care about the hours anyone works. They just know that other people might care, so it's a handy thing to throw at the vans.

And I think that's the bottom line. This op-ed isn't science, and it's not journalism. It's a couple of cranky old guys who've been doing things a particular way their whole lives: publicly owned, unionized transit. That way is running into some difficulties, so someone tries a different approach: private jitneys. This also happens to hurt their friends in the union.

Do Sclar and Paaswell actually go try the vans? Do they ask around to find out how vans can be successful? No, they start from some prejudices they formed on a cramped bus ride in Rio, and brainstorm all the bad things they can think of about jitney service. They edit it (sort of) into an op-ed, and presto! Top of the Times opinion page. Yay.

More ivory tower nonsense

Yesterday I told you about a very sloppy Times op-ed by Elliott Sclar and Robert Paaswell. The authors link private jitney service to third-world cities, suggesting that they're necessarily dirty, dangerous and foreign. They ignore the jitneys that ran on New York streets in the early part of the twentieth century, which were emphatically not foreign, the Brooklyn and Chinatown "dollar vans" that may sometimes be dirty and dangerous, and the New Jersey vans that are fairly clean and well-regulated, but are not particularly foreign.

You can see how silly Sclar and Paaswell's guilt-by-association game is if you think about other things that exist in third-world cities. For example, Bamako has open-air food markets that stink to high heaven, so if we have open-air food markets they'll stink to high heaven. If we had followed that logic twenty years ago we wouldn't have any greenmarkets.

As I wrote back in January, there is nothing inherent in the concept of private transit, or the jitney service model, that makes jitneys dirty, crowded or dangerous. They are that way because lots of people in those cities are desperate enough for transportation that they'll put up with danger, crowds and filth. Most New Yorkers are not desperate, and we won't put up with that level of danger or discomfort. Go to West New York and you'll find private vans (and buses) that are clean, well-maintained and pretty safe. They need to be in order to attract customers. They're also fairly well-regulated by New Jersey authorities.

Another area where Sclar and Paaswell ignore well-known facts is their assertion that the vans are bad because they don't take Metrocards. I agree that this should be changed, but it wouldn't be that difficult. Metrocards are currently used by the Airtrain, the PATH train, Bee-Line buses, and the Roosevelt Island Tram (currently out of service). From 1996 through 2006 they were accepted by the seven private companies that offered bus service under franchise agreements with the Department of Transportation.

Metrocards - or whatever technology replaces them in the future - could even be used to regulate private van operators. Want to accept Metrocards? You have to show a recent inspection certificate. Too many moving violations? We'll deactivate your Metrocard account. But Sclar and Paaswell aren't trying to find solutions, they're trying to find reasons to reject the vans.

Stay tuned, there's more to come.

Under Sclar and Paaswell's noses

On Friday the Times ran an op-ed piece by Elliott Sclar and Robert Paaswell against the City's pilot private van project. or at least the headline and cartoon were against the vans; the actual article pulled its punches at the end.

There are so many things messed up with this article, it's hard to know where to start. The best place, I guess, is with the skimpy data. This is an opinion piece, not a peer-reviewed paper, but the level of scholarship is shockingly low compared with academic Times writers like Paul Krugman and even Eric Morris. I honestly don't get it, because Sclar and Paaswell seem to write fairly well-researched and thoughtful articles for academic journals. Apparently they feel that different standards apply for a politically-oriented opinion piece, so they popped out this turd.

Sclar and Paaswell talk about private transit "in the developing world," specifically referencing Calcutta, Rio de Janeiro and Johannesburg, but they don't seem to be aware that we've had private van services operating in the New York area for at least fifteen years. Are there "higher levels of pollution and more accidents and traffic fatalities" in Flatbush, in Jamaica, in West New York? If there are, it's not particularly the fault of the vans.

Space in op-ed columns is limited, but this is an important piece of information that deserves to be mentioned. I can think of two reasons why they could have left it out. Maybe they really are clueless and don't know about the three massive local private transportation operations taking place a short subway ride from their offices, or maybe they know but are leaving it out because it spoils the picture they want to paint of Bloomberg turning New York into Calcutta. Either way, it's something they and the Times should be ashamed of.

The op-ed is a little bizarre in another way: Sclar and Paaswell assert that "the Bloomberg administration considers private transit services a temporary solution, to end as soon as the money to restart the affected routes is found." I've heard allegations to that effect, but nothing official. If it's true, it would be big news, because running one of these lines requires a major investment of time and money. If the city is asking the van owners to make that investment while all the while planning to yank their licenses when the routes start to show a profit, well that would screw them over in a major way, and Sclar and Paaswell show a serious lack of empathy for van operators by framing it this way: "informal services like commuter vans, controlled by powerful operators, can become difficult to dislodge, thanks to the political influence they wield." Well yeah, if the city encourages someone to make an investment and then arbitrarily takes it away without adequate compensation, they should be prepared for the investor to get upset.

Still, the authors don't seem quite sure whether Bloomberg wants the vans to run permanently or not, so at the end they give suggestions for both possibilities - fairly reasonable suggestions that are pretty incongruous given the ominous tone of the rest of the article.

I've got a bunch more to say about this op-ed, but this is a good place to stop for the night. Feel free to join in!

The vans do exist!

I got an email yesterday from an anonymous reader:

Today I decided to take the Q79 up to Panera Bread in Douglaston and do a little work on my laptop. I started at the "Group Ride Vehicle Stop" at the corner of Little Neck Parkway and Jericho Turnpike.

After I'd been waiting there for about fifteen minutes, a man walked up and introduced himself as the owner of the van company! He said that there would be a van along within five minutes, and called the driver on his cell phone to make sure. In a few minutes the van pulled up and off I went. That's what I call personal service!

We didn't pick up any other passengers along the way, but the driver was friendly and professional, and the van was reasonably comfortable. The driver was frustrated that the city had let so much time pass between the cancellation of Q79 service and the beginning of the van pilot. He pointed out that there was a fair at the Farm Museum today, and said he had brought people there earlier, but nobody wanted a ride on this run.

Before, while we were waiting for the van, the owner said that business had been slow, but that he was committed to making it work. He's currently running two vans on the line, and since it takes 15-20 minutes to go from one end to the next, that means that the headway is about 15-20 minutes. He said that as business picks up, he hopes to increase that to four vans.

I gave him the address of your blog, and your email address, as well. I would have taken a van home, but it was after 6PM so I had to walk part of the way!

Thanks for the report, and thanks to the owner of Alpha Van Lines for sharing that info with our tipster! If anyone has more news about the vans, feel free to drop me a line.

Who's prepared for a loss leader?

Yesterday I observed that the new pilot van project is shaping up to be a bust because (a) nobody's marketing it, and (b) the vans aren't showing up. I don't know for sure why this is, but my guess is that it's the interaction of three facts: these van owners have never started a new route, they're used to keeping a low profile, and the structure is very decentralized.

The main factor, I think, is that this is a very new situation for everyone involved. The operators are mostly Jamaicans and Haitians who have their experience running the dollar vans in Flatbush and Jamaica. They started up during the transit strike in the 1990s, and have been going ever since, but I've noticed that they don't seem to have expanded. For example, It seems fairly obvious that if you go to Jamaica and you go to Flatbush, you might want to connect the two and maybe serve Crown Heights and Brownsville as well. As far as I can tell, that service doesn't exist, and the routes are very similar to the way they were when they were started.

The Chinatown vans seem newer, but they travel on express routes with no direct competition, and were serving a pent-up demand when they started. The Jamaicans, the Haitians and the Chinese have all lived under the shadow of the repressive commuter van laws, which meant that they had to be very subtle about marketing their services, so when they finally have the opportunity to do real advertising and PR, they shy away from it.

The whole structure is weird, too, at least with Community Transportation. The city contracts with Community, but Community only owns a small number of vans, maybe even just one. The rest of the vans are independent contractors who work for Community, and if they don't want to drive a route, the company management has very little power to force them.

I'm guessing that the individual van owners aren't prepared for the upfront costs of providing anchor service. They probably operate on very thin margins and don't have enough money to go for more than a day without bringing in something. They also probably don't feel much ownership of this project, and thus not much desire to see it succeed.

The decentralized ownership in Community Transportation thus leads to a situation of perverse incentives. The people who are most committed to seeing the Q74 pilot succeed - Bloomberg, Goldsmith, Yassky and Ricketts - lack the power to actually compel the vans to show up. The people who have the power to provide service - the actual van drivers - don't have much stake in the project. In this way it actually reminds me quite a bit of the congestion pricing campaign.

What's the answer? Very simply: figure out ahead of time whether the market is (to use Klein's terms in this PDF) "thick" (has enough passengers to support jitney service right off the bat) or "thin." If it's thin, you can't just run a few vans and expect people to flock to them. Someone has to be responsible for marketing and anchor service. And I think it's pretty clear by now that all five routes are thin markets.

Fortunately, in this pilot project it's not too late. The TLC's solicitation of interest in the project mentioned that they would allow up to three groups to participate in each route. I bet they wouldn't say no if a credible private group offered to take on the route with the most potential (I'd say the "hipster shuttle" between Alphabet City and Greenpoint) and commit to (a) spending at least $1000 on advertising, and (b) running vans, empty or not, at least every fifteen minutes, 7AM to 1AM, for the rest of the ninety-day pilot. From what I've seen, that's what it would take to actually get a route like this going.

Adrift without an anchor

The vans really are MIA.

I realized yesterday that I have not yet actually seen an official "Group Ride Vehicle" on the street. Now I've spent more than three hours looking for them at various times of day on six separate days over the past week and a half.

I thought I saw two last Wednesday, but they definitely didn't have the official stickers. It's been suggested to me that they were "poachers" - commuter vans that were not authorized for this particular program.

At first I thought it might have just been Community Transportation that was either uninterested or incompetent, but then a reporter for the Brooklyn Courier waited for two hours on Monday without seeing a single B23 van. Okay, I thought, those aren't very promising routes; maybe the new and improved B39 "Hipster Shuttle" will have more luck.

Yesterday I went to try the B39 and found this van in the stop at 14th and Irving. Needless to say, it wasn't going to take me to Brooklyn, and it wasn't there to cover the new van service. There were two guys standing nearby, probably Con Ed office workers on their coffee break, and they told me they'd been there for ten minutes and hadn't seen any "Group Ride Vehicles." I waited for fifteen minutes after that, but no vans showed up.

So if the vans weren't thee, where were they? I'm guessing on illegal runs where they knew there would be higher ridership. That would guarantee them a certain minimum income per hour.

Well, okay, but by doing this they're essentially guaranteeing that there will not be enough vans to provide frequent service, and as a result people will not wait for the vans, and these lines will fail, and they will lose an opportunity to expand their market to new customers. Why would they do such a thing? Why would they do absolutely no marketing? And why bother signing up for the pilot project if they weren't prepared for even a single day without customers?

I've been puzzling over this for the past week and a half. I've come up with some likely reasons, but I'm not sure that all of them apply, or that they're the whole story. My best guess is that it's the interaction of three facts: these van owners have never started a new route, they're used to keeping a low profile, and the structure is very decentralized.

For a lot of this explanation, I'm going to draw on the excellent analysis by Klein, Moore and Reja (PDF), particularly the notion of minimal scheduled service as an "anchor" that brings in customers. But really, the concept of an anchor should be familiar to anyone who's started or expanded a business. Basically, you can never be sure that customers will appear out of nowhere, no matter what you're selling, and you need to be prepared to go for six months without any income, and a year or two without any profit. So you keep your restaurant open for the full hours even if it's empty, until word gets around and it stays full. Judging by the number of restaurants that I've seen close within a month or two of opening, it's not uncommon for people to fail to plan for this possibility.

What van operators can do

In my last post I discussed some things that the Taxi and Limousine Commission could do to give its Group Ride Vehicle program a better chance of success - like changing the name. But part of the idea is that it's a privately run system, and that the route contractors have some responsibility for their own income.

It's pretty easy to think of ways the vans could get the word out about their services: in the case of the Q74, advertising in the Queens College student paper, The Village Voice and other periodicals that students are likely to read. Advertising on the connecting E and F trains, on bus shelters and even on the competing Q64 buses. Hiring a few attractive college students to hand out fliers. Wrapping their vans in ads promoting their own business instead of someone else's.

The van operators could even set up their own website, as a supplement to - and linked from - the existing TLC page. They could start a Facebook page and a twitter feed.

The van operators could also engage in some positive PR. Reach out to campus organizations and student leaders. Demonstrate how flexibility is a strength of jitney operations by having lots of vans available (and signs directing people to them) after major events on campus. Organize an event or two, like maybe a reggae dance party.

The big question is why they haven't done any of this? Some of it costs money, but others can be done with a little time, thought and connections. You might also ask why the vans are so scarce in general. I'll have some thoughts about that soon.