Special series: A lesson on frugality for MARTA from out West

(Note: This concludes a special series examining MARTA. Read Part 1 here, Part 2 here or Part 3 here.)

MARTA says it needs another $50 million a year to survive. It can find half of it out West.

I’m talking about places like Phoenix, Las Vegas, Honolulu, San Diego and Denver — places that have significantly cut their transit operating costs by contracting out bus services.

Those first three cities have outsourced their entire bus service. These outfits are still funded with the traditional transit model, with a mix mostly of taxpayer funds and passenger fares, but they are not run by in-house employees. Private firms do the work.

The results are impressive. Honolulu in 2008 was able to provide 41 percent more bus service than MARTA at about three-quarters of the total cost. Its operating cost per passenger mile was just 51 cents vs. MARTA’s 93 cents.

In Las Vegas it was 57 cents; in Phoenix, 80 cents.

In all, 11 of the nation’s 50 largest public bus systems contracted out at least 10 percent of their bus service in 2008. All 11 have cheaper operating costs per passenger mile than MARTA’s bus operation does.

MARTA’s bus service isn’t uncompetitive only when compared with privatized services. The vast majority of the top 20 don’t contract out any bus service, and yet most have lower costs than MARTA does.

The most marked contrast, however, is with the 11 that do use outside operators. As a group, they have privatized just over half their bus service, at a per-mile savings of 39 percent compared with MARTA.

Including the bus service they do run in-house, these agencies are collectively 30 percent less costly than MARTA.

The private model applied to MARTA

What if MARTA were to privatize about half its service, and in doing so achieved similar savings? It could increase bus service by one-eighth over 2008 levels while holding expenses steady; cut bus costs by a ninth while providing the same amount of service; or settle on some combination of new service and lower costs.

Cutting bus costs by a ninth from 2008 levels would save MARTA $22 million a year. Privatize all bus service, and MARTA might save as much as $43 million annually.

So, why haven’t more transit systems embraced contracting?

“Too often the mission of public transportation providers has been to grow and protect the transit organization as opposed to maximizing the product we provide,” said Cal Marsella, then-CEO of Denver’s transit authority, in a 2008 interview with the Reason Foundation.

“The organization is not the thing. Mobility is what people vote for and expect.”

Along the same lines, he noted, “The first answer to improved quantities of quality mobility service is not always the provision of more … money but rather looking inward to existing operations to determine if more cost-effective means are available …”

That point resonates for metro Atlanta in two ways. As policymakers prepare to ask citizens to approve a new penny sales tax to fund new transportation infrastructure, they must assure us that all options, including transit, will be as cost-effective as possible.

The second way relates specifically to MARTA. Whether or not MARTA enters a holding pattern in terms of growth, it will be crucial for MARTA to make all its operations as lean as possible.

Transportation in our region is much too important to do anything else.

Previously:

88 comments Add your comment

Tiger Woods + Jesse James = SuperBAD meets SuperEVIL in "SuperUGLY!"

May 19th, 2010
7:14 pm

“MARTA says it needs another $50 million a year to survive.”

MARTA could start by raising its own fares from $2.00-a-trip to something of a level that would actually help to serve a city of six million, that and not “mismanage” the funds into one’s own personal luxury car, restaurant budget, entertainment budget, etc. Though with the City of Atlanta, Fulton County, DeKalb County and the State of Georgia as fine examples to model and pattern themselves after, one can see why MARTA has had repeated problems with sticky fingers over the years. One can look no farther than the fiscally-sound Georgia Department of Transportation and their exceptional management by the State of Georgia to see why getting around has become such an issue in these parts.

Tiger Woods + Jesse James = SuperBAD meets SuperEVIL in "SuperUGLY!"

May 19th, 2010
7:15 pm

Oh yeah, first or whatever…

Michael H. Smith

May 19th, 2010
8:54 pm

Privatize MARTA?

Kyle, the better approach is to start fresh with the statewide private public transit entity I’ve discussed previously – No bad brand name, no bad board members, no bad management, no bad union and no bad debt to absorb.

MARTA can fulfill its end of life plans alone.

Transportation Now...

May 19th, 2010
9:46 pm

Well Kyle…As a taxpayer in Fulton county, I’m not okay w/ turning over public assets to a private firm. Lets think Grady…

Ace

May 19th, 2010
10:14 pm

So, who loses their jobs or get their pay slashed when the work is outsourced. Will the new drivers ve Mexican drivers?

JBM

May 19th, 2010
10:28 pm

I offered this option to MARTA some two years ago with some of their Para transit operations. Para transit is often the back breaker in many public transit systems. MARTA para transit is published at a $40 per trip with a $3.50 fare. I told them that I or any one else could provide the same service for half of that cost. Needless to say I never got anywhere with MARTA.

When I approached them again, they now tell me they don’t even have the money to pay a private contractor. MARTA has not prepared for this day in any way. With the old para transit buse they used to leave them running during an operators entire shift because they were afraid they would not start again if they shut them off. When they got their new vehicles they continued to follow the same practice.

Taxpayer

May 19th, 2010
10:51 pm

The AJC has determined that it can cut its political commentary costs by 50% by outsourcing. See how easy that is. I also heard a rumor that if we were to cut CEO pay at all major corporations, we could offer lower cost products to the masses and even hire thousands of additional people at those companies without spending an extra dime. Cool, huh.

itpdude

May 19th, 2010
11:35 pm

ha ha ha, I like Taxpayer’s point.

Is privatization of MARTA the way to go? If we were to privatize, it would HAVE to be with the buses because they are the only part of MARTA that actually pays for itself per ride. Those train rides (that, ironically, are the most popular part of MARTA with whites) are subsidized. Buses (which, ironically, are the blackest part of the system) are the least subsidized.

Personally, I don’t think privatization is the answer to all things. We had a water privatization in Atlanta years ago and it worked for crap. The gas privatization hasn’t been that great a shakes.

But garbage privatization in Atlanta would work, yet we don’t do it. Hrmph.

I say if MARTA is privatized, I want the big roads privatized. At every on-ramp, a toll of $2.00.

Short of that, MARTA really should come under state control and the state ought put public transit in every inner metro county and extend bus services to those areas that need it all across the state. And to those who call that welfare, stop driving on your welfare roads, using the welfare postal service, receiving welfare police and fire protection, etc.

In other words, get real.

Cutty

May 19th, 2010
11:39 pm

Privatize GDOT!!!

zeke

May 20th, 2010
12:07 am

FIRE THE UNIONS! RAISE FARES TO A LEVEL THAT WILL COMPLETELY FUND OPERATIONS! INCREASE SECURITY 10 FOLD AT STATIONS, PARKING LOTS AND ON TRAINS! SELL IT TO PRIVATE INVESTORS(SAME FOR HARTSFIELD) OR SHUT IT DOWN!

fred smith

May 20th, 2010
7:54 am

Actually, I was thinking Halliburton – -
You psuedoconservatives keep saying privatization of everything and anything is the answer to all ills – and conveniently cite data that work for you and ignore (or hide) those that don’t. Take a look at the real costs of what the state has done in the last eight years. It ain’t pretty. And it’s enormously more expensive. On the other hand, the attempt to put all state IT under one civil service roof was an even worse boondoggle. What the heck. We’re going the way of Rome anyway, might as well try it. Fiddle away.

Redneck Convert (R--and proud of it)

May 20th, 2010
8:01 am

Well, every month I look at my natural gas bill and thank the Lord natural gas was privatized here in GA. The Lord only knows how high it would of been if the state hadn’t of privatized it.

So I think old Kyle done hit upon something here. We can operate MARTA the way businesses operate. The minute it starts loosing any money, we just dump the passengers out into the street and file for bankruptcy and walk away with our Golden Parachutes. Or maybe we can just raise the fare to 100 bucks each way and when people quit riding we can say MARTA wasn’t wanted so it’s time to fold it up.

So keep it up, young fellow. We need more Great Thinkers like you in this state. About time the librul AJC hired somebody that thinks Right.

Jeff Fryer

May 20th, 2010
8:01 am

Marta should raise the fares for the average ridership personages who not only are free to blog while they ride, they also get to enjoy the splendor and majesty of the rich, Corinthian leather seats, not to mention the sweet aroma coming from the other passengers. Talk about farfegnugen!

Even if fares are doubled, Marta still represents a fine value

Morrus

May 20th, 2010
8:54 am

Curiously, in a supposed anti-incumbent year, most of the departing are not retiring but seeking higher office. We may recycle more than we replace. The bad news is that a frustrating 114 seats still have but one contestant. Two of them aren’t even incumbents, meaning they will affect state policy without being vetted by voters. And I have to think that we’d be better off if many had run instead for the Legislature — and cut down on the number running unopposed. Georgia’s problems are numerous. They aren’t going away. There’s too much stale thinking at the Capitol, on both sides of the aisle. New voices would be welcome.

Horrible Horrace

May 20th, 2010
9:00 am

$50 million a year or $500 million a year would make no difference. From top to bottom marta is ensconced in stupidity and ineptness.

Disgusted

May 20th, 2010
9:01 am

Hey, Morrus: Get some new material. You’ve published this same post in about a dozen blogs for a week. If you don’t like the current candidates, file to get put on the ballot. I’d vote for you just to be rid of reading this stuff.

Base

May 20th, 2010
9:19 am

The simple solution for you neophytes is to privatize. It is a short term solution for a long term problem.This is a puff piece at best.

Steve

May 20th, 2010
9:21 am

People need to realize this is PUBLIC transportation, it will not make a profit. If the overcrowded MTA in NYC cant make a profit, marta never will either. And for all the folks that keep saying raise the fares to $3-5 to offset, keep in mind public transit is supposed to be a cost effective alternative to owning a car, so its clear the people who keep saying jack up the fares clearly dont ride marta at all. I personally wouldnt pay that much to ride. It would make no sense to spend $6-10 round trip on marta when you can drive for less round trip in gas. I pay $5 round trip for Grta, but thats a clean, beggar free, cryin baby free, wanna be rapper free, over hearing other folks loud walkman and vulgarity free ride.

Horrible Horrace

May 20th, 2010
9:22 am

Agreed Base. The only real and truthful solution is to dismantle Marta.

DirtyDawg

May 20th, 2010
9:32 am

Oh yeah, let’s give Corporate America yet another place for them to attach their ‘blood-sucking’, hypostomes (look it up) into the public treasury. Just remember the Republican motto – ‘The only role of Government is to fund businesses…the only good labor is cheaper labor…and ’shareholder value’ above all else – so long as I’m the shareholder.’

Don

May 20th, 2010
9:34 am

Kyle – Bingo! Except for one thing. The problem with contracting out is the contractor’s only manner of increasing his profit is by cutting costs (and corners!). Service suffers. I can provide many examples of this behavior by Veolia, GCT’s bus contractor. They seem to do the bare minimum they have to to hang on to the contract.

Instead of just contracting out the operations, contract out the whole deal. Contractor gets a slice of the revenue pie, too. Maybe all of it. That gives him a profit motive as good service = increased revenue. The bid would be based on who needs the least money to run the whole show. The subsidy raise the floor, so to speak, so that the operation becomes a “for profit” venture for the contractor.

Either that, or you have to bake all kinds of performance measures with incentives into the contract – and actually follow through on them. Hard to do….

Dave

May 20th, 2010
9:54 am

Your proposal may be viable. Anecdotally, there are two or three private bus companies operating along Buford Highway that I assume are making money as they continue to operate. They do have the advantage of high demand given their clientele’s low income average and they aren’t paying union wages. Then too, looking at those advantages, they are able to “cherry pick” the best conditions so as to be profitable, something a public entity can’t do.

What you seem to be saying, without saying it, is that MARTA as a public entity or a contracted private or private/public service needs to cut costs. The obvious targets, from prior installments, are labor and administration.

Your next assignment is a series analyzing the bloat to be found within MARTA available to be eliminated.

Junior Samples

May 20th, 2010
10:13 am

Kyle,

Do you ride MARTA every day to work? Just curious.

Tammi

May 20th, 2010
10:14 am

If we would keep people in pathetic misery for generation after generation, just convince them that business is evil.

Dave

May 20th, 2010
10:15 am

And after my last comment: the “liberal” side of me. $80,000 bus driver salaries seem pretty healthy to me; but, are you suggesting that MARTA has to be “Walmartized?” Is public transportation the next target for eliminating well-paid blue collar workers? They are a thing of the past in retail and about gone in industry. Government employees are one of the last hold outs. Just sayin’.

I like the effects of Walmartization on my current costs. I’m not sure I’m going to like the long term effects on other social costs like health care, retirement income and so on. But that’s yet another series for you.

Horrible Horrace

May 20th, 2010
10:30 am

Dismantling Marta is the only answer.

Marta will never make a profit.
Marta will always have their hand out.
Marta will always be inefficient and inept at everything.

Marta is a fine example of a financial bottomless pit and chock full of stupid and inept employees, from top to bottom.

Tea Party Meber

May 20th, 2010
10:36 am

Stop rasin my taxes to pay for this!

Jeff Fryer

May 20th, 2010
10:52 am

Raisin taxes? The sin o’ men?

Kyle Wingfield

May 20th, 2010
10:56 am

JBM: I agree that paratransit (aka Marta Mobility) is an excellent candidate for outsourcing. Or, if the numbers add up (I haven’t run those), why not just give taxicab vouchers to the people who use that service?

Taxpayer: Actually, the AJC and every other major newspaper does outsource well over half of our political commentary — in the form of guest op-eds and syndicated columnists. It’s a way to add perspectives, expertise and variety, and presumably is much more effective, in cost and otherwise, than trying to do everything in-house. And note that I didn’t suggest privatizing the entire agency, although I think every such opportunity should be considered and judged on the merits.

But I digress…are you saying that you are satisfied with what you get from MARTA as a taxpayer, given that so many other bus systems do more with less? Do you think MARTA users — and yes, Junior Samples, I do take MARTA to work the vast majority of the time — should be satisfied?

Kyle Wingfield

May 20th, 2010
11:00 am

fred smith: You’re right; not every privatization works or makes sense. Now, care to comment on this one?

Steve: If I agree that MARTA shouldn’t turn a profit (if it did, it should reduce the amount of subsidies received), can you agree that it shouldn’t lose money year in and year out?

Don: You are right, a successful privatization depends completely on the contract. Fortunately, there are a number of cities that have done it right which could give MARTA advice.

JZ

May 20th, 2010
11:17 am

How you write this article and not even mention the outrageous union wages paid by MARTA? That is the difference with private providers.

MARTA has become a pure bureaucracy, more concerned about it presrvation as an organization than the service it provides.

Jefferson

May 20th, 2010
11:23 am

Natural gas prices in MN are half of what we pay in GA, Industry gets the breaks not private homeowners since deregulation.

DJ

May 20th, 2010
11:23 am

What is the ratio of office employees to driver/operators for MARTA versus other systems? What is the ratio of maintenance workers to driver/operators versus other systems? Lets focus on the systemic issues, fix them then see what fare structure makes the system break even.

Hindu Elvis Pimp

May 20th, 2010
11:36 am

I didn’t read this, but I still must be critical!

Horrible Horrace

May 20th, 2010
12:01 pm

Marta should be dismantled…bolt by bolt, nut by nut.

Bryan -- MARTA supporter

May 20th, 2010
12:37 pm

@ Horrible Horrace

What should MARTA be replaced with then?

The problem is that there is no much politics and racism when it comes to funding and expanding MARTA to make it a true METROPOLITAN transit system. MARTA’s primary source of funding (1% sales tax) isn’t generating the money it use too bottom line. There needs to be a sourse of funding that doesn’t inflate and deflate based on the economy. If Clayton, Cobb, and Gwinett would have join from the beginning there probably wouldn’t be this type of crunch with MARTA. Plus there would be better bus service in those counties along with rail service! Buses don’t even run on Sunday in those counties or Saturday for that matter in Gwinett except for route #10, which ironically is the main route used to connect with MARTA. We all know what happened in Clayton… nothing there which is absolutely insane. If we get ride of the racism and the thought that transit brings crime then we could move forward as a region and have excellent transit and would definitely help with traffic. Even if a person wasn’t a fan of the bus, the rail would be appealing way to get around. If the main 5 counties were on board from jumpstreet we could have rail all the way up I-75 to Kennesaw, up I-85 to Gwinnett Place, and into Clayton to Jonesboro and through Riverdale! We could extend rail to Lithonia and the Fulton Industrial Blvd. We could have new rail lines to Hapeville and Atlantic Station and to Emory Univ. Even have service that just doesn’t go downtown. Maybe a rail line from Cumberland Mall area to the Doraville area along I-285. That would be a great rail system.

http://world.nycsubway.org/us/atlanta/marta-provisions.html

You can see where MARTA to this day still has the ground work to extend the rail service laid out but because there is no funding, no support, and racism involved we can’t have a great rail system as I’ve described. We can’t have an extensive local bus system to areas that don’t have buses now because there are no major rail stations. That means more traffic and a worse quality of life. That also means more companies leaving the area and more not wanting to relocate here.

When we stop looking at the mistake here and there that MARTA may have made and look at all the great things MARTA has done then MARTA can be a great system.

Base

May 20th, 2010
12:39 pm

The reason the state doesn’t want it is because of the union contracts.

Churchill's MOM

May 20th, 2010
12:57 pm

Wing boy, you have done a good job on this, congradulations.

Howmany bus drivers does MARTA pay over $75,000 per year?

Churchill's MOM

May 20th, 2010
1:00 pm

Bryan — MARTA supporter 12:37 pm

Is it racism to not support a system as poorly run as MARTA?

Bacchus

May 20th, 2010
1:01 pm

Privatization would mean the end of BoD perks like trips to Vegas and it would relieve the agency of union labor rates and bureaucratic inefficiencies, thus lowering costs. But of course it would inevitably be racially spun– because this is Atlanta. Privatization would then allegedly mean minorities (or the majority, depending on where you’re looking) would be marginalized off the buses and trains while the system is reprogrammed to serve “rich” folks going to the airport or ballgames.

No politician will sacrifice union votes or the minority vote to privatize Marta. That’s the proverbial Third Rail.

Jeff Fryer

May 20th, 2010
1:06 pm

I can’t wait to read Marta’s response to Kyles thoughtful, comprehensive and done-right analysis in which he’s tied down most if not all of the problems plaguing Atlanta Bus and Rail. I wonder if they’ll go full Snidley Whiplash on his ass?

Bryan -- MARTA supporter

May 20th, 2010
1:15 pm

@ Churchill’s MOM

http://www.itsmarta.com/martamatters/index.aspx

The facts are there. MARTA by far is actually a very well run system. Especially for a sytem that doesn’t even have state support or the support of an entire region.

It IS racism to not want a rail service because you feel that Blacks will come and make the area bad. Oh you don’t know what MARTA stands for… Moving Africans Rapidly Through Atlanta. What about the demise of C-Tran and then not wanting MARTA in the county because they feel that if they have transit it will look desirable to low income Blacks that are being displaced from the housing projects being torn down. If that isn’t racism then what is?

Churchill's MOM

May 20th, 2010
1:43 pm

Bryan — MARTA supporter 1:15 pm

Ok, I’ll bite, How is the Clayton County Commission raceist if it ends C Tran because they were not getting value for their spending?

Churchill's MOM

May 20th, 2010
1:45 pm

that is …racist.

Kyle Wingfield

May 20th, 2010
2:03 pm

Not to mention that Clayton County and its Board of Commissioners are both majority-black.

Jess

May 20th, 2010
2:14 pm

It’s fairly clear from the posts here that many think MARTA is basically an entitlement program. As long as the city sees MARTA as a jobs program, and many of the users see it as an entitlement, it is going to be very difficult to get anyone in power to do anything other than beg for more funding. Atlanta just doesn’t have the will to do the hard work necessary to improve. It’s so much easier to hold your hand out and whine.

Horrible Horrace

May 20th, 2010
2:19 pm

Bryan — MARTA supporter

May 20th, 2010
12:37 pm

Nicely played – the race card that is. I know thats the best ya got but I must ask…what else ya got?

john

May 20th, 2010
2:19 pm

Kyle,

Another great article as usual.

Marta won’t do this because it just wants to keep stealing money from the taxpayers and funneling it to a few “select” employees.

This is what Democrats will never understand. Private companies will ALWAYS run more effecient than any government run organization. The reason: better employees who can actually get fired if they do a crappy job….not some lazy, incomptenent government worker sitting around waiting for their nice pension

john

May 20th, 2010
2:20 pm

PS

This is what is so scary about Obama. He wants more and more government workers and organizations.

That equals bankruptcy

Horrible Horrace

May 20th, 2010
2:21 pm

Hey Bryan…ahh ha…HAHAHAHAHAHAAAA!

Marta is chock full of inept, lazy employees…How long ya been working at Marta?