Private urban transit would cost less

Guest columnistSeptember 21, 2013 

As a Libertarian, I believe opening the urban transit market to private alternatives, whether they are co-ops, corporations or part-time businesses, would provide other alternatives to the private car, might reduce greenhouse gas emissions, save tax dollars and, most important, improve the lives of low-income people while reducing the social problems associated with poverty.

With an aging society and a government that has a significant financial burden, we may find it beneficial to look at financing from someplace other than the taxpayers who are living on fixed incomes and a government with other financial priorities.

We did not always depend on the government to provide mass transit in our cities. The Feb. 6, 1915, issue of the Electric Railway Journal reported that in 1915 in Seattle 518 private vehicles, then known as jitneys, were “carrying 49,000 passengers daily.” If we could do that, then why can’t we do something similar today?

As Sen. Curtis King, R-Yakima, and his colleagues travel the state to discuss transportation with the public, one issue they might hear about is mass transit and two possible alternatives that might make a positive difference: competitive tendering and ride-sharing.

Competitive tendering, while varying from one jurisdiction to another, is one alternative that needs to be discussed. It may be referred to as contracting out or public-private partnerships, in which a government agency works with private investors to provide services instead of the government providing them directly. The private companies could be co-ops, corporations or just mom-and-pop businesses. This small change works because it reintroduces competition into the process, thereby producing significant gains in efficiency.

Competitive tendering has been advocated by groups across the political spectrum from ICLEI, the organization responsible for Agenda 21, to the Heritage Foundation where South Carolina’s former Sen. Jim De Mint resides as president. If they can agree, maybe we can as well.

Sweden implemented competitive tendering for its urban transit nationwide in the 1990s. The change resulted in the number of passengers increasing and public subsidies decreasing. Cost recovery increased from 30 percent in 1991 to 60 percent in 2003 in Gothenburg.

Around the world, from Europe to Asia and Australia, many major cities have looked to private businesses to improve urban transit. Here in the U.S. we have been slow to adopt such changes, but some cities have been successful and enjoyed the benefits.

Colorado law requires Denver’s regional transit agency to contract out some of its bus operations to private businesses. It brings a savings of about 50 percent compared with the government run services. In San Diego similar results have been achieved. New Orleans, Las Vegas and Phoenix are just a few other cities that have turned to private operators.

Here in Washington state, Community Transit in Snohomish County has contracted with a private company, First Transit, which provides transportation to Seattle from Everett at considerable savings compared with the agency-run buses.

Ride-sharing is another alternative that may have a bright future.

Ride-sharing apps from companies such as Uber, Avego, Sidecar, Lyft and others allow potential customers to contact a driver with their smartphone. The customers and drivers have accounts with the company that created the app. The app is used to match customers with drivers and to handle payment by the customer to the driver. This requires little or no government involvement.

These changes may be a big benefit to the public if they are allowed to develop. After all, open markets are markets of opportunity.

Michael Wilson is a semi-retired Thurston County resident who attended The Evergreen State College. He spends his spare time researching urban economic issues.

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