Title

Contrasting Visions of Urban Transport Critique of “Fixing Transit: The Case For Privatization”

Authors

Todd Litman

Document Type

Report

Publication Date

2011

Subject Area

organisation - privatisation, place - north america, economics - subsidy, organisation - performance, economics - appraisal/evaluation, economics - benefits

Keywords

public transit, privatization, self financed, efficiency, quality, transit benefits

Abstract

This report critiques the Cato Foundation paper, Fixing Transit: The Case For Privatization, which recommends that all transit services be privatized and self-financed. It claims this would improve efficiency and service quality, but all the private transit examples it describes are inferior quality or high price; none offer the level of integration, quality and affordability provided by public transit systems in most communities. Fixing Transit argues that public transit provides little economic, social or environmental benefit, but the analysis is incomplete, biased, and inaccurate. It ignores the multiple roles public transit plays in an efficient and equitable transport system, and overlooks many public transit benefits. It uses extreme examples to suggest that transit employees are overcompensated, although public bus drivers’ wages are often lower than those paid by private firms. Although transit policy should encourage innovation, competition and true efficiency, the approaches advocated in Fixing Transit, which eliminate public agency’s role in coordinating services and maintaining standards, are likely to reduce system efficiency and service quality, and therefore reduce total benefits to users and society.

Rights

Permission to link to this report has been given by T Litman, copyright remains with him.