Public vs. Private Ownership of Transit Systems - Page 2 - Myth-Weavers

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Public vs. Private Ownership of Transit Systems

 
I would think the competition/monopoly point gives a good reason for why this idea of 'who uses it' shouldn't apply to say 'hamburger restaurant'

If a hamburger restaurant starts doubling their prices the public can easily have another option. If the subway system in a city instantly doubled it's cost people would be hard pressed to suddenly find a new way to commute to work which is a necessity.

There are, of course, other ways to prevent monopolistic behaviors, such as the results of the anti-trust ruling of US vs Greyhound in 1996.

Additionally, multiple private companies used the railways for passenger services through much of US history, until it became unprofitable to do so, and Amtrak (a sort of hybrid private/public thing) was established in 1971.

Quote:
Originally Posted by Michael Silverbane View Post
silveroak brings up the possibility of a monopoly. Are there other factors that could keep mass transit from being a good fit for a private enterprise?
Generally, it does not run an operating profit, usually public transport runs at a significant operating deficit (if you look at fares only). This is done to offset the cost of said transport, which fosters broader economic prosperity and social benefits in the local market.

Private industry is not holistic enough to see the benefits of those broader concerns. Off the top of my head: roadway congestion, "preferable" population distribution, property values and overall pollution are all interests which a particular transit operator would be "too small" to care about unless it is tied to the broader state/city's communal interest.

In short, when it's publicly funded the math on "beneficial" is different and more broad than "direct fare profit." There's a lot more factors on the "pros" column of that particular balance sheet. Hence why public transport makes sense when a government does it, less so for a private profit-driven corporation.

Quote:
Originally Posted by AtLastForgot View Post
Generally, it does not run an operating profit, usually public transport runs at a significant operating deficit (if you look at fares only). This is done to offset the cost of said transport, which fosters broader economic prosperity and social benefits in the local market.

Private industry is not holistic enough to see the benefits of those broader concerns. Off the top of my head: roadway congestion, "preferable" population distribution, property values and overall pollution are all interests which a particular transit operator would be "too small" to care about unless it is tied to the broader state/city's communal interest.

In short, when it's publicly funded the math on "beneficial" is different and more broad than "direct fare profit." There's a lot more factors on the "pros" column of that particular balance sheet. Hence why public transport makes sense when a government does it, less so for a private profit-driven corporation.
This is a good point. Do you (or anyone else) care to speculate how Greyhound has managed to prosper in this niche? In addition, how do you think the public-good versus for-profit balance sheets have affected the air travel industry?

Quote:
Originally Posted by Michael Silverbane View Post
This is a good point. Do you (or anyone else) care to speculate how Greyhound has managed to prosper in this niche? In addition, how do you think the public-good versus for-profit balance sheets have affected the air travel industry?
Greyhound (and eg. Megabus, Amtrak everywhere but the NE corridor, and so on) operates in a different market than regional transit authorities. They're more akin to an airline in that they operate over larger distances and primarily between municipal boundaries rather than within them. You buy a ticket (usually ahead of time) on one of a few-daily routes to a few-daily locations. Most of those "broader benefits" I enumerated don't enter into this calculation, since congestion/population distribution/property values aren't impacted.

That's compared to regional transit authorities like the CTA/Pace or Metra (to a lesser degree) here in Chicago, which are running continuously on intervals as low as 5-7 minutes over a comparatively small-but-dense area largely within one municipal zone. Subsidizing Greyhound doesn't make much sense for Chicago or even Illinois as a whole. And that lack of subsidy shows, both in terms of their reduced service to the public, lower responsiveness/access, and higher fares.

In my view, it's a different niche.

Quote:
Originally Posted by leons1701 View Post
I think you might be misunderstanding, British Rail was the public option, which was privatized about 20 years ago, with routes being franchised to private operators. According to most sources, British Rail never (or very rarely) made a profit, yet there were still private companies willing to take on running trains (and apparently are still doing so somehow, if with less customer satisfaction).
BR was a state owned company that received subsidy from the government to top up farebox and freight revenue. It was expected to pay its own way and over the years it made a lot of cuts to routes, most notably in something known to UK railfans as the 'Beeching Axe' in the early 1960s, named after the then Chairman, Dr. Richard Beeching.

I think it should be publicly owned, given that it shouldn't be for profit, anymore than roads should. It should be there to benefit the people and for no other reason. If it makes a profit, good, but that shouldn't be the point.

If public transit is making a profit, the user fees are too high.
The wealthy have a vested interest in the poor being able to get to work on time.

Quote:
Originally Posted by michael silverbane View Post
this is a good point. Do you (or anyone else) care to speculate how greyhound has managed to prosper in this niche? In addition, how do you think the public-good versus for-profit balance sheets have affected the air travel industry?
greyhound.JPG

I think this table (from their 2015 annual report) is a good reason for their success. 48% of their customers are traveling less than 200 miles. Another 35% are traveling under 450 miles. If you do not have a vehicle or do not want to use it, it is one of the better options for shorter trips that taking you from one city to another.

For many smaller towns, it is the only town to town transit available (besides your own vehicle).

It misses a LOT of smaller towns, but does get to a lot more than any other option that does not involve owning or renting your own vehicle. And there's a pretty simple reason for those trip lengths, much more than that and flying is not only much quicker, but sometimes even comparably priced (depending on exactly where you begin and end your trip).







 

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