Memo: Regional Transport 3

Part of a series of “reading memos” that offer a brief summary of interesting academic content along with my personal reflections. This one covers Chapter 8 (Mass Transit) of Giuliano & Hanson’s The Geography of Urban Transportation.

Should transit be re-privatized?

Operating transit is almost never profitable

Given the long history of financial struggles faced by transit agencies in the United States, there is an oft-recurring debate about whether transit should ultimately be reprivatized. Those in favor argue that private firms would be able to charge fares sufficient for consistently high-quality service, offer a variety of service at different price points, pursue cost savings that governments cannot (e.g., adopt new technology, stop using unionized labor, etc.), and stop focusing on pleasing voters/politicians rather than customers. That last point may be particularly beneficial since political pressures can cause agencies to provide short-term gains for passengers at the expense of long-term financial sustainability. (Current debates about making transit “free” and overlapping/redundant service for certain neighborhoods illustrate this problem well.)

While these arguments are somewhat compelling, I also recognize how privatization could disproportionately hurt the most vulnerable members of society – low-income riders may no longer be able to afford transit and service may never be extended to areas with low potential revenue. That being said, public sector ownership of transit in America seems to be trending towards an unsustainable future where the rider experience is compromised to the point that it becomes the mode of last resort for those with no other choice. Ideally, transit would be subsidized sufficiently such that it is ubiquitously supplied – thus ensuring ridership demographics that mirror the general population, not just high-income or just low-income riders. The author describes an example of how allowing bus service quality to languish in favor of supporting train service hurts low-income patrons and some ethnic groups more than others, which aptly illustrates the consequence of spreading investments unequally.

Instead of wholesale reprivatization where private firms would only want to offer high-revenue service, the author suggests a blended option where private entities could make both positive & negative bids on contracts for certain parts of the network. Alternatively, agencies could bundle high-demand and low-demand parts of the network for sale together.

Secondary Benefits of Transit

The societal benefits of transit can be grouped in three categories: direct mobility benefits (people can avoid owning a car), place-based benefits (agglomeration, enabling denser land use development, etc.), and mode-shift benefits (reducing driving along with all its negative consequences). However, in order to realize mode-shift benefits, transit must be paired with policies to make cars more expensive or time-consuming to use in comparison. (Of course, transit must first be a legitimate alternative in order for these policies to win the support of voters and politicians!)

Traffic congestion relief is often cited as a benefit as well, but it’s important to realize that “solving” congestion with transit is not actually that likely or desirable – some level of congestion will exist as long as an area is a growing and desirable location. That was quite eye-opening for me as I have been accustomed to the argument that transit “takes cars off the road” as one of the primary ways to advocate for more service. Focusing on the other secondary benefits may be more effective and intellectually honest/realistic instead.

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