The Case for Letting Nonprofits Run Public Transit

[CHamilton]

The Case for Letting Nonprofits Run Public Transit

Even a popular public transportation service can struggle to cover its expenses. Take the recent case of Caltrain, the commuter line that links San Francisco and San Jose. Ridership is up 38 percent since 2010. Still, this past May, the agency announced an expected budget shortfall for 2015. You wouldn't think that could be the case, but across the American transit landscape, it's actually the norm.The difficulties of fixing transit funding have occupied some top minds in recent years. Count New York City planner turned Stanford University scholar Rohit T. Aggarwala among them. In the summer issue of the Stanford Social Innovation Review, Aggarwala argues that inefficient public sector management is at the root of public transportation troubles.

For that reason, he says, U.S. transit systems would be far better off run by non-profit groups than by government — especially commuter lines:

 

[Bob Dylan]

Interesting Charlie, but except for a few Commuter Lines that Contract out Operations to for Profit Railroads and a Few for Profit Transportation Companies, IINM ALL Public Rail Transportation, whether Amtrak or Commuter , is Non-Profit! The point about Poor Public Management is because of Oversight by Politicians since they allocate the Money, Appoint the Boards that hire the Managers and then try Unsuccesfully to Micro-Manage the systems without having a Clue about Rail Transportation! :angry:

If there were Profits to be made and plenty of Government Subsidies were included,, Financial Titans like Warren Buffet would have their Lobbyists working 24/7 to snag Contracts to run Rail Projects in Cities and States and Hacks like Johm Mica would be pushing harder for AMTRAK sell off the NEC to their Wealthy Owners and quit providing Gourmet Food in the Diners!

 

[Eric S]

I think the article argues for government transit agencies contract with private non-profits to operate transit systems (not public non-profits [government] or private for-profits).

 

[Anderson]

In some sense, the core of the problem is that fares are a political, rather than economic, function. Demand is rising...that's great, but once you get to a point that your trains are packed and your line is full at the peak, it's time to hike peak fares and then offer concession fares at around the current levels to those in lower-income situations.

While I like the idea of involving non-profits, I see no reason that you couldn't have two operating companies on a given route: One that is public/government, is cheaper, but makes most or all of the stops...and another that's private, will honor the tickets of the former with a significant upcharge, but which runs an express service (or, potentially, a more comfortable one...think the old parlor car services on the LIRR). Taking the Caltrain situation, there's no reason you couldn't hand a non-profit a set of slots (or let them run a car on the back of an existing train) on the condition that they have to upcharge by X%.