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