Wendell makes some good points about competively franchising transit service:
Scams in mass transit
By Bill Steigerwald
Saturday, October 28, 2006
Wendell Cox's fancy title is international public policy consultant. But for anyone who needs facts, figures or strong opinions about public and private transit issues, Cox is the great go-to guru of transportation. His enemies will say he hates public transit. But Cox, who has worked with scores of state, local and national governments to build and improve transit systems, is a real radical. He actually believes that bloated public mass transportation monopolies like the Port Authority of Allegheny County should be run efficiently and rationally. Cox, whose Web site Demographia.com groans with geographic and demographic data from around the world, was at his office near St. Louis Thursday when I called him.
Q: Youíve just been named head of the Port Authority of Allegheny County. Your pay is only $250,000 a year but you have absolute power to do anything you want to do. What do you do?
A: Start competitively contracting the service. Now granted, if this happened and I were there, believe me, the afternoon I made such an announcement I would be out on my ear. Iím serious. You cannot believe how strong both the public transit unions and the bureaucrats are. Itís not just the unions. I understand the unions and their interest in preserving their empire. But the fact is, the public transit bureaucrats are just as bad as the unions.
But thereís no reason why we canít contract out everything Port Authority does -- buses and light rail. Right now, for example, in Stockholm the entire system, including the subway, is contracted out. In London, the entire bus system -- 6,000 buses -- is contracted out.
What we would do is basically offer the existing employees separation allowances and that kind of thing and convert the Port Authority system to a competitively run system. Port Authority would continue to determine the fares, to determine where the routes go, etc., as is being done very successfully in Denver, Stockholm, London, Adelaide, Perth and around the world. So this is not privatization per se. What it is is using the competitive market to provide virtually the same services that are being provided today.
My guess in the case of Pittsburgh, knowing something about the Port Authority's cost structure, is that what you are doing today -- after the administrative expense of converting the system, which by the way would not be that much -- you would be looking at savings in the neighborhood of 40 to 50 percent. The payback period would be less than three years. Then you could take that money and either put it into something else or you could expand public transit service.
Of course, no transit manager is interested in that. Iím serious. The whole bent of the transit industry in Europe and the United States is to maximize cost. They do not want to minimize cost; they want to maximize cost. They are not interested in saving money at all. Thatís why anyone who talks about a bigger role for public transit in the future doesnít have the slightest idea what he is talking about.
Q: Basically, the Port Authority is the same size in terms of employees, number of buses and light-rail vehicles as it was in 1982. Plus its budget is bigger in inflation-adjusted dollars than it was then but it carries about 30 percent fewer riders today. Is that good?
A: Thatís pretty good. Iíll tell you, itís hard to find performance that good in the transit industry.
Q: Youíre being sarcastic, right?
A: Iím being absolutely facetious. This is what the monopoly structure of public transit in the United States and Western Europe and Canada produces. There is no incentive to save.
Q: Are Port Authority's peers in other cities equally afflicted?
A: There are a few semi-success stories around. Denver, for example, which now contracts out 50 percent of its service based upon my legislation which passed in 1989 and has since been expanded, has actually increased its ridership rather substantially and theyíve reduced their costs. Theyíve also wasted a trainload of money on light rail, which has changed nothing. There are systems in Los Angeles that I was involved in establishing, where we basically took sections of the main transit operatorís structure and created new small transit districts. In the first year we did that we had savings of 60 percent and ridership has gone up substantially because theyíve taken the money and expanded service.
Q: In the Wendell Cox-run universe, what would a perfect public transit system look like?
A: Youíve got to competitively contract it. Now some people call that privatization, but itís like if the City of Pittsburgh were to contract out the garbage service. The service still remains public. The City of Pittsburgh is still in charge. It tells the garbage companies what to do. The point is, with respect to public transit, the Port Authority should be nothing more than a marketing operation. It should market the service. It should determine where the routes go. And it should determine budgets. You do not need probably 100 people to do the essential public functions of the Port Authority -- which is of course why this will never happen, because the purpose of public transit is to serve the employees of the transit system, not the community, which gets us back to why the whole idea that public transit has anything to offer to the community more than it is doing today is absolutely bogus.
Q: You donít hate public transit, right?
A: Precisely. As a matter of fact it was my motion in 1980 that created the funding source for the Los Angeles rail system. There are two problems with mass transit: One is that it is all about downtown. The latest data Iíve seen on downtown Pittsburgh from the Census Bureau is that somewhere in the neighborhood of 30 to 35 percent of Downtown work trips get there on public transit. On the other hand, if you go outside Downtown, youíre probably going to find it less than 5 percent. This is the case virtually everywhere around the world. If you go to Paris, youíll find 70 or 80 percent of the work trips to the downtown to the core being by public transit and out in the suburbs youíre going to find 15 percent.
So public transit is about downtown. In fact, Iíve done about 30 presentations mainly in Australia and New Zealand in the last month and one of the things I do is basically tell people it is time to stop the exaggerations and the platitudes. The fact is there isnít a thing you can do to reduce traffic congestion anywhere in the community with public transit. The first reason is, youíre not going to get more people to downtown Pittsburgh on public transit; and secondly, anybody who rides public transit to work outside downtown Pittsburgh does so only because they do not have a car.
Q: We just published the salary figures of the Port Authority and there were nearly 100 bus drivers making over $80,000 a year with overtime.
A: Well, I bet if you look at the paratransit in Pittsburgh, the Access system -- which by the way may be the best paratransit system in the country and is fully contracted out -- Iíll bet there isnít a driver who makes more than $35,000 a year. The idea that bus drivers are making $80,000 is an absolute outrage and proves that the purpose of public transit is simply to move money to certain interest groups.
Q: Have you heard about our North Shore Connector project, the $425 million-and-counting twin-tunnel under the Allegheny River for a light-rail extension from Gateway Center to the North Shore?
A: What they should do with that $425 million is do a study and figure out what is the least expensive way to reduce the travel delay in Allegheny County. Itís doubtless with some sort of a road project. You could probably do 10 to 20 times as much good with a road project as you can with this tunnel project. Spending $425 million for a 1.2 mile light-rail extension is an absolute outrage. ...
By the way, to give you an idea, these people have absolutely no shame. Where Iíve just been last week -- Delhi, India -- has built a metro light-rail system. The subsidy per annual passenger is 50 percent higher than the gross domestic product of the nation. That shows you how shameless it gets. And the transit people are there claiming theyíre getting a 30 percent return on investment. Weíre talking about stuff that should be sending people to jail. Itís just absolutely outrageous.
Whatís going to happen in the long run is cities are going to find themselves with congestion getting worse and worse because they are not dealing with the problem. The problem is that traffic congestion gets worse. There is nothing you can do to reduce traffic congestion except provide more road capacity.
Bill Steigerwald can be reached at email@example.com or (412) 320-7983.
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