I'd be very careful with this line of thought that they can get away with providing minimal service because they are a public sector organization. There are growing calls from the public for the TTC to be privatized. Suggesting that it's okay to expect less from a public sector organization will only add fuel to this fire.
And there's a big difference between an organization being underfunded and employees being underpaid. TTC operators are more than adequately compensated. That token collector makes 3-4 times more than any cashier. And that bus driver makes 2-3 times more than say a school bus driver who's carrying passengers deemed far more fragile but who tend to be far more demanding. The public sees this disparity and they feel that TTC employees are being paid enough to be more than just apathetic.
The public feels everything should be privatized and the public is often very much so misguided and blind to the fact that any precieved ineffeciencies in a publicly ran organization will be outranked by the profits that private corporations are set out to make. The OPG disaster is a perfect example.
And plus, many people have tried private public transit, most of them failed to make money. Go to China and you'll see hundards of these example that didn't work out.
On the subject of pay. Althought I am a huge proponent of the TTC and I support most of the decisions that they have lately made and am very satisfied with their overall service, especially when compared to other part of Canada and the USA, I do not and will not in anyday support the TTC union.
The overcompensation of TTC employees are not a result of TTC's managment policies, but rather the power of its union. And the union is the root of much of the society's qurrels with the TTC.
But the public must remember that the TTC managment are not on the same side of the union, infact, taking most union managment relationships into considerations, this relationship between the TTC and its union should be rather hostile.
Most of the public, on the other hand, do not understand this fact...
so 2 things in my opinion
1. TTC union need to be reorganized or disbanded.
2. Public need to be better informed and more understanding.