The need for private mass transit in the GTA

[bloor_christie]

This is a branch from http://www.urbantoronto.ca/showthread.php?t=10875&page=3. I'm moving my discussion into it's own thread as the old title was misleading. I'm not anti-transit. However, Toronto's transit is lacking - the current system is not working.

It's now time to let the private sector start running transit in Toronto. Here are just a few reasons:

*** GOVERNMENT WASTE ***
Governments are spending billions of dollars for subway lines that service empty fields (Vaughan line, Sheppard line) while downtown lines are completely congested. Projects are prioritized for the wrong reasons (why Sheppard instead of Eglington which would have eventually linked to the airport?). On top of it, government projects are always years late, and costs always skyrocket out of control.

*** PROFIT DRIVEN = CUSTOMER ORIENTED ***
While private companies are out to make a profit, they only do so by offering good reliable service to their clients. They need people using their service to make money. If they charge too much, or if service is not good, then revenues go down.

Private companies will want to service and connect dense areas together as this is where their revenue will come from. The private sector wouldn't waste their time with the Sheppard and Vaughan lines, but would build downtown where there is a need for more rapid transit.

*** BI-YEARLY TTC STRIKES ***
Also look what happens when there are competitive transport companies - VIVA went on strike and YRT still ran. The VIVA union had to compromise. When the TTC goes on strike, it cripples our city!

*** COMPETITION = BETTER SERVICE ***
When the Blue 22 is complete, you can either pay:
a) $3.00 dollars and take the TTC - 1 hour and 15 minutes to get to Union
b) $55.00 and take a cab - which tons of people currently do
b) $22.00 and get to Union in 22 minutes by rail - much cheaper than a cab!

Blue 22 is purchasing its own trains and and paying for its own operations. Again - it costs the taxpayer $0.00!

*** PRIVATIZATION WORKS IN EUROPE AND ASIA ***
Click on EACH link below and you will see how many European and Asian systems are operated AND are owned by these private firms.

http://en.wikipedia.org/wiki/Veolia_Transport
http://en.wikipedia.org/wiki/Arriva
http://en.wikipedia.org/wiki/FirstGroup
http://en.wikipedia.org/wiki/Stagecoach_Group
http://en.wikipedia.org/wiki/Transdev
http://en.wikipedia.org/wiki/ComfortDelGro
http://en.wikipedia.org/wiki/Ansaldo_STS (automated systems)
http://en.wikipedia.org/wiki/MTR_Corporation
http://en.wikipedia.org/wiki/Keolis

Like I've said before - stop being scared of the private sector - nothing will get done if we wait on the government. It's better to have something than nothing at all.

 

[GraphicMatt]

Let's be clear here. You're not talking about PPPs for building or operating lines that are still owned by the public. You're talking about fully privately-owned and operated transit lines that receive no operating subsidy from any level of government.

Is that right?

 

[andomano]

I don't understand how the TTC would be able to run as a Private system when the large majority of it's operating cost already comes from the farebox. Of course, if you propose another fare increase to $5 per kilometer, then you may start to make a profit.

Like I've said before - stop being scared of the private sector - nothing will get done if we wait on the government.

The private sector would still have to wait for government approval before undertaking any project. They don't just get a green light to do whatever, whenever, or however.

It's better to have something than nothing at all.

Don't we have something now?

 

[leopetr]

b) $22.00 and get to Union in 22 minutes by rail - much cheaper than a cab!

$44 for two people, $66 for three people, etc.

It's not going to be 22 minutes with the additional stops in Weston and elsewhere. Also, cab is instantly there, while you have to wait for the train to come.

Blue 22 is purchasing its own trains and and paying for its own operations. Again - it costs the taxpayer $0.00!

Except for the huge upgrades to the Georgetown rail corridor and the construction of the new airport rail spur -- designed so it can't handle a proper GO train -- which the taxpayers are paying for.

The trains it's purchasing are old Via equipment -- not exactly state of the art.

Let's see how Blue 22 turns out before we rush out into more PPPs.

 

[glesco]

Bloor_Christe missed the Hotel buses that run downtown to the airport and back. They are about $30 round trip and leave every 30 minutes running on public roads.

If Blue 22 is so efficient why doesn't SNC Lavelin, the operater, build and pay for track and related construction? At least the public roads the Hotel express are open to all while the public who financed the railway to the airport and not given access.

 

[DavidH]

I don't understand how the TTC would be able to run as a Private system when the large majority of it's operating cost already comes from the farebox. Of course, if you propose another fare increase to $5 per kilometer, then you may start to make a profit.

Exactly. We have government subsidies for transit not because public operators are incapable of operating without a subsidy; we have subsidies because we have decided that social good comes out of having transit systems and it is appropriate that the collective "us" fund the system so that the costs are not completely on the heads of those who need to use them.

At the same time, we don't value them enough that we subsidize them enough, which is why TTC and GO are so dependent on the farebox.

If we were to privatize, the private operators would have to raise fares to cover the missing subsidies, and there is a social cost to this. Perhaps it is acceptable, perhaps not, but it is not what we have chosen to do thus far.

But - given that transit is a natural monopoly and we are NOT going to have competing Yonge subways, why in the world would we decide that there is NO social good in transit and that the government should not provide subsidies or have a say in setting routes and policies. All we have to do is look at the 407 to see that fully-privatized operations don't necessarily worry much about the customer when they have a set of customers who don't have much choice.

I can fully see possible roles for private sector involvement in construction and operation, but not for private sector control.

 

[GraphicMatt]

I just don't see a situation where private transit could be anything but supplementary. I like the idea of smaller, private buses operating in the city. As much as I think Blue 22 is a missed opportunity in some ways, the idea of a private, express train to and from the airport isn't a bad one. And if the banks and financial service companies got together and decided to build a privately-owned express subway line up Bay Street with $7 fares, I wouldn't see any reason to deny them that dream.

In all scenarios, the private service augments regular service. It doesn't replace it.

But in terms of privatizing existing routes. First, the only ones I can imagine the private sector being interested in are the high-density rapid transit routes. Why would it be in the best interest of the TTC to turn over, for example, the Yonge subway line, which turns a profit today, to a private company? The private company is going to take that profit and bank it. the TTC is going to take that profit and augment service on an unprofitable but needed bus route.

 

[Jonny5]

$44 for two people, $66 for three people, etc.

It's not going to be 22 minutes with the additional stops in Weston and elsewhere. Also, cab is instantly there, while you have to wait for the train to come.

Also, who takes a cab from the airport to Union? No one.
Union is not anyone's destination from the airport.

The cab will take them to their hotel/house/conference etc...
Blue 22 will not.

Fail22.

 

[whatever]

Bloor_Christe missed the Hotel buses that run downtown to the airport and back. They are about $30 round trip and leave every 30 minutes running on public roads.

Shh! Those buses are one of my favourite little secrets. Don't go around telling people about them or it might cut into my legroom

 

[jn_12]

Why is privatization synonymous with customer service, efficiency and no waste? Have you worked in government and had to work with a private enterprise that was handed a formerly provincial program? I have. It is a huge nightmare. In this case, the company is so inept that it takes a full time policy advisor to act as the bridge between them and stakeholders simply because they have no accountability. Simply because something is privatized, doesn't mean that the government can suddenly ignore it, so you're still talking about dedicating time and energy (and therefore, money) towards the issue.

 

[drum118]

It should be noted that Veolia_has been fire from the Austin DMU project this past week, and a few others lately. They are not the only ones.

A number of private companies have been replace in the last few months.

 

[GraphicMatt]

Why is privatization synonymous with customer service, efficiency and no waste? Have you worked in government and had to work with a private enterprise that was handed a formerly provincial program? I have. It is a huge nightmare. In this case, the company is so inept that it takes a full time policy advisor to act as the bridge between them and stakeholders simply because they have no accountability. Simply because something is privatized, doesn't mean that the government can suddenly ignore it, so you're still talking about dedicating time and energy (and therefore, money) towards the issue.

The efficiency of the private sector (and the incompetence of government) is one of the cornerstores of Reagan/Thatcher economics. I would have thought that major cases like Enron, AIG, Bear Sterns, etc, where these private companies weren't so much being efficient as they were using creative accounting, screwing over their customer, throwing lavish parties as 'corporate retreats' and giving themselves huge bonuses, would have dispeled the myth a little, but it's pervasive.

 

[golodhendil]

Someone who keeps repeating that MTR is a "private" company has shown himself to have little credibility in discussing this issue.

 

[DavidH]

Someone who keeps repeating that MTR is a "private" company has shown himself to have little credibility in discussing this issue.

True. Clearly he didn't read the wikipedia article he linked to; it's discussed in the very first paragraph of that article.

But then there's this:

*** PROFIT DRIVEN = CUSTOMER ORIENTED ***

Like the 407 Consortium, I suppose?

 

[waterloowarrior]

We could use the Scandinavian model...not full privatization or deregulation, but a way to increase efficiency and use competition to lower costs..

Metrolinx would do planning, set fares, and branding and would tender out most of the routes. TTC would compete with private companies for routes across the GTAH (or they could be sold off). Routes should be done at a gross-cost basis with incentives and penalties for service. In other words, Metrolinx keeps the fares and pays for the lowest cost per hour or route KM etc (or they can use the best service for a set price, or combine service/price).

Some advantages are you don't have to worry about not getting bidders for non-profitable routes (because routes are done based on cost to service rather than how much revenue they bring in), its led to 20% cost reductions in other places, and Metrolinx gets to set the service level rather than hoping that the private sector doesn't decide to cut routes or go out of business if ridership doesn't meet expectations.

The main disadvantage is that there is less of an incentive for good service (lowest cost bid could mean low paid drivers, cutting corners etc). However you can use incentives/penalties in the contract to tackle this.