Why Privatizing Public Transit is BAD NEWS

The debate has sprung up at least a couple of times in the past five years here in Tampa Bay, but now it seems that the debate on whether to contract out public transit agencies to a private operator is gaining some steam. Right smack dab in the middle of this debate are at least three public transit agencies in Central Florida; Manatee County Area Transit (MCAT), Sarasota County Area Transit (SCAT), and most recently…the Central Florida Regional Transportation Authority (also known as LYNX).

The argument to privatize transit

Many fiscal conservatives, including those who associate themselves with the Tea Party, have argued that publicly run transit agencies are financially bloated and inefficient. They chastise local governments for not having their “ducks in a row” when it comes to operating reliable transit services without breaking the bank, and for being far too dependent on state and federal funding sources – namely the latter. In turn, they also argue that private companies such as MV Transportation and TransDev can run these agencies with greater efficiency and financial solvency than the municipalities that currently operate and fund them. It almost sounds like logical sense in the minds of fiscal conservatives…right? Why have governments operate inefficient transit when private enterprise can manage transit like a business?

With the economic downturn of 2008/09, many transit agencies were forced to slash services as federal and state funding for transit declined. Many agencies have turned to contracting out at least some of their services to the private sector in an effort to save money.

What privatized transit generally looks like

There are two major forms of privatization that pertain to public transit: 1) Contract out transit services to the private operator, but allow the public entity to plan out and finance those services, 2) Allow the private operator to handle both operations and planning.

In the first scenario – seen in parts of the US; the private operator would be contracted to provide their workforce to operate the transit routes and would be given the necessary resources (route assignments, schedules, etc.) for the contracted employees to do their jobs. Meanwhile, the transit agency would retain responsibility for planning and financing services and their board of directors and executive staff would likely be retained to oversee day-to-day operations.

In the second scenario – seen in many parts of Europe and in Australia; the private entity does virtually all the work…from operating the routes, to paying the employees, to planning out and financing services. The role of the government in the scenario is reduced and the public element of the transit agency may be limited to just the board of directors and a few key executive members. In this case, the transit agencies operate similar to what the airlines would, bringing forth a business-like competition to the service area.

The pros and cons to privatization

While I’m not going to spend a ton of time going through each of the pros and cons of privatizing transit in detail, it is important to know what some of them are.

Pros

  • Generally less burden on public entities and governments.
  • Competitive environment – like the airlines (in the case of the second scenario described above).
  • Greater flexibility of routes and services.
  • Greater economic flexibility.
  • Generally lower employee wages.
  • Lower overall cost of doing business.

Cons

  • Focus is on making profits, not providing excellent service – Massive cuts to the agency’s services and routes could be made at the expense of meeting profit margins.
  • Less accountability – difficult to hold the private operator accountable for its actions.
  • Greater risk of late buses and trains, as well as “no shows”.
  • Less public input on service changes, except public hearings that are required to be held by law.
  • Lower customer satisfaction and employee morale.
  • Government subsidies needed to shore up unproductive services and meet government regulations – such as Title 6 of the Civil Rights Act here in the US.

Problems with privatized transit in Fairfield, CA

Fairfield and Suisun Transit (FAST) in Fairfield, CA has experienced problems since it was outsourced to MV Transportation. Buses have been consistently late – or not shown up at all, customer complaints have increased, and employee morale has decreased. Despite these troubles, FAST decided to renew its contract with MV in 2014. As recent as May, 2015, dismay has been expressed over how FAST transit workers are compensated. These problems definitely bring to the forefront that contracting out transit services to the private sector isn’t the best way to go about saving money and rebuilding public trust.

Agencies in New Orleans, LA, Long Island (Nassau County), NY, and even Austin, TX have all outsourced their transit operations to private companies. While I’m not sure about how Austin is doing, both Nassau County, NY and New Orleans have experienced problems since privatizing their transit services.

The situation with MCAT/SCAT

Discussions about privatizing MCAT and/or SCAT have arisen in recent years, but were never pursued further. Additionally, a 2013 survey showed that almost 60% of customers were against even merging the two agencies. However, things took an interesting turn when private transit operator TransDev jumped into the foray with an unsolicited proposal to merge the two entities and simultaneously making the united entity a privatized one. While Manatee County seems to be on board, Sarasota County needs more time to examine the repercussions should the proposal be approved. Some have pointed that MCAT and SCAT would do better as one body – but not under private hands, and many customers have voiced time and time again that they don’t want their transit agencies to be run by a private company – fearing many of the same repercussions that are already being felt in Fairfield, CA with FAST.

The situation with LYNX

Some in Orlando, including Congressman John Mica, have expressed dismay at LYNX’s lack of ability to create a better transit network – including efficient connections to SunRail. These parties believe that contracting out LYNX services to the private sector would force the agency to make better decisions in order to better serve customers. There is even talk of legislation that would basically impose strict guidelines on LYNX and force the agency to bid out its system to private transit operators like TransDev and MV. I’m not sure how far the legislation would go, or if it would only apply to LYNX, or stretch out to be a statewide mandate – eventually opening the door for agencies like Hillsborough Area Regional Transit (HART) to have to do the same thing. One thing is clear though, the SunRail advocacy group – The SunRail Riders – have expressed heavy dismay towards the proposal, citing that it will turn LYNX into an entity that beefs up SunRail connections at the expense of routes that are dearly needed by riders in other areas of Osceola, Orange, and Seminole Counties.

Why privatizing MCAT/SCAT could lead to the privatization of PSTA

If the privatization plan goes through with MCAT and SCAT, there is no doubt in my mind that Tea Party activists, like Barbara Haselden of Pinellas County, will see even more reason to lobby county and state officials into contracting out the Pinellas Suncoast Transit Authority (PSTA) out to the private sector. These activists have long argued that PSTA is mismanaged and cannot think outside the box. They also believe that privatization is the only way to “protect the taxpayers from further waste”. PSTA has already contracted out paratransit services, only to see disastrous results (although issues supposedly have been addressed and resolved), and the agency is now having to look at possibly contracting out its express routes due to budgetary constraints, and the failure of the Greenlight Pinellas referendum.

Why privatizing LYNX could lead to the privatization of SunRail

Tea Party activists have also argued that both LYNX and SunRail are grossly inefficient and that SunRail has no long term funding source, or long term management plan by the various municipalities that would have to begin operating it when the state relinquishes control in 2021. If LYNX becomes privatized, there is no doubt in my mind that these activists will call on the state to also bid out SunRail to a private operator. Why? Because I’m very sure that their argument will be “if you privatize LYNX, then you also have to privatize SunRail”, and I’m willing to bet that this is exactly what winds up happening. In addition, privatizing LYNX could also open the door for – as I mentioned, PSTA to also be bidded out to the private sector. It’s like a game of dominoes…once one agency is privatized, others will start looking into privatization as well. And then fiscal conservatives, along with the Tea Party, will advocate our elected officials to force privatization upon our transit agencies.

All three agencies could stand to lose a lot

If MCAT, SCAT, and LYNX are all privatized, you can likely expect that customer satisfaction will plummet, customer complaints will rise, buses will be late – or not even show up, needed routes will be cut in order to shore up ones that the private operator sees as “profitable”, employee morale will decline, and the list goes on and on. In short, expect far worse service from these agencies if they are privatized. It has already happened to FAST and several other agencies throughout the US. We simply cannot allow this to happen here in Florida.

5 thoughts on “Why Privatizing Public Transit is BAD NEWS”

  1. Public transit systems are simply schemes to redistribute wealth – they do not have to be fiscally responsible because they simply increase taxes and/or borrow more money to pay higher wages, install more costly infrastructure and transit vehicles (larger, more expensive buses, light rail, etc.) because there is no incentive to be cost effective.
    Taxpayers are saddled with 100% of capital costs and typically 80% of operating costs for the benefit of the 2% of the population who actually use public transit.
    What you are saying is that you want this model to continue so public transit employees can be paid higher wages, be given more benefits (such as pensions and health insurance) and, perhaps most importantly, those who ride can ride for a small fraction of the actual cost of capital and operating expenses.
    The same benefits can be provided to riders who need financial assistance by subsidizing private transportation costs, specifically taxis and ride sharing services such as Uber and Lyft, all of which provide transportation 24/7, from door to door, no “first mile-last mile” issues.
    Those who can afford to pay full fare should pay full fare, which they would never pay for public transit. The actual cost/ride on a PSTA bus is about $7.00, riders pay less than $1.00, taxpayers pay about $6.00 every time a rider steps on a PSTA bus.
    There simply is no financial or social justification for the majority of public transit services in the US, primarily because of the low population densities of most service areas.
    In Hong Kong for instance, all public transit is privately owned and operated, fares are less than PSTA’s, and the operating corporations are actually profitable and run a far more efficient system than ANY in the US. All of the trains, buses, ferries, subways, trolleys and mini-buses in Hong Kong are privately owned and operate alongside taxis, limousines, Uber and other ride sharing services, even helicopters. The public has a choice in a free market and is not constrained to one particular means of transportation.
    The tone and spin of your writing leads me to believe you are just another victim looking for a free ride for yourself and others like you.
    I am equally convinced you will not willingly publish this comment on your biased and ill-informed blog.

    Disclosure: I am in favor of less government interference in our lives and believe we are all Taxed Enough Already (TEA) which has led to the erosion of freedom in our society for everyone, including those who get their free ride.

    1. The pretzel logic is the cost of gas and highways. The vast majority of or recent war machine, TRILLION DOLLARS in off budget spending and debt, was made to quash alternate energy and protect fossil fuels. Let the military adventures in Iran, Iraq, Afghanistan be funded 100%, 80%, even 50% by gasoline taxes and consumers (like yourself ) would quit sucking my money through the likes of Boeing & Shell. Transit would quickly pay for itself if ridership was not skewed by the biggest fat cat middle class sugar daddy giveawsy, of our grand children”s ecology & economy.

      Furthermore, cutting wages below living rate saves nothing. Have you learned nothing from mcdonalds, wal-mart, and the lengths traversed to avoid Obamacare requirements. When wages are below local coat for foid, clothing & shelter (ie, a living wage) those folks require social services (emergency foid, health care, energy, subsidized transit) or start a cycle of dispossesion;d losing their jobs, losing their homes, losing their health, design tigrating their family.

      We all win when we all win. Livible wages, across the board whether a librarian, motel maid, or stock broker means taxpayers putting back into the pot. Health care for all means cheaper medicines with nobody skimming and people dying in the streets.

      Desperate people do desperate things. I hope your gated community has barbed wire when this fat cat ponzi scheme explodes. I’d rather live in a world like scandanvia (safe streets created by the lowest rung not being desperate for survival) than Cali Columbia or boarder of Mexico where guns talk and the fittest survive. Americans think they’ll be that one percent that survives the rigged system, but it’s an absurd proposition based on smug, disproven bravado.

      Tune down the hate and the del confidence, think about the fruit of the tree you are planting. Who exactly magically laid the miles of rails in Ayn Rands invisible valley? Mexican & Chinese slaves, that’s who.

  2. Privatizing transit is desperately needed because governments are out if control! Private enterprise can run these agencies within their means and protect taxpayers from further waste. Why have empty buses when you can have door to door jitneys?

    Put that together with tolled express lanes like TBX, and you’re all set! 🙂

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