Saturday, October 13, 2007

Savage Shove: Is SB 572 A Preemptive Counter-Reformation?

If his recent Tribune column is any indication, Professor Ian Savage of Northwestern University is trying to become to the transportation community what "Savage Love" columnist Dan Savage is for the rest of us--a source of trenchant, iconoclastic and often right-on advice.

Professor Savage's argument distills down to this. The current public transit funding crisis and its proposed solution (SB 572) is much more about preserving the existing institutional structure than it is about maximizing the quality and quantity of transit service in Northeastern Illinois. The SB 572 fight in his view is about preserving the same level of service by the same publicly owned and operated service providers--Chicago Transit Authority, Metra and Pace with the RTA perched precariously (and expensively) in its financial oversight role.

Savage points out how outsourcing some transit service through competitive contracting could yield more transit service at less cost:

The situation in Chicago is not unique. Throughout the developed world, the introduction of transit subsidies in the 1970s was accompanied by a run-up in costs. A political backlash ensued with efforts to introduce competition into the market. In a few places, such as the provincial cities in England, this has taken the extreme form of deregulation and competition on the street. Much more common, and more relevant to Chicago, is a competitive contracting model that was adopted in London in 1985.

If Chicago followed London's model, the existing CTA bus division would be broken up into smaller units, and the assets would be sold to companies in the private sector. These companies would then compete against each other and against existing private sector firms to win the contracts to operate individual bus routes. Typically, the contracts are for three to five years. And if a route isn't making money, bids are decided based on who requires the least amount of subsidy. While operations would be in private hands, the CTA would set the routes, specify how frequently the buses run, what color they are painted, and what fares are charged. The CTA would continue to exist, but as a marketing and procurement organization.

It may surprise many readers to learn that the iconic red buses in Britain's capital have not been owned by the government for more than 10 years. Yet, as visitors will testify, the network is marketed as a seamless system, with electronic fare card options that Chicagoans can only dream of. This form of organization has found favor in Scandinavia, Australasia, South America, and, rather ironically, the former Soviet-bloc countries of Eastern Europe. Large multinational companies have developed to meet this maturing market. Some of these companies are already active in the United States, owning extensive school bus holdings and Greyhound Line Inc.

Another option might be a taxi-like system allowing licensed jitney vans to provide service on routes that CTA and Pace may be abandoning in January if the status quo is not preserved. Such vans would be tied into the nascent real-time bus locator systems. They would be allowed to charge market prices and try alternatives to the CTA's big bus/big street model (e.g., premium priced door-to-door service).

The fact that no transportation agency is giving serious consideration to alternatives to the current transit service delivery and institutional models lends credence to Savage's argument. Rather than being a "liberal" attempt to preserve vital transit service to transit dependent communities, Savage implies that the Moving Beyond Congestion/SB 572 effort is a profoundly conservative effort to preserve a status quo that delivers significantly less transit service than might be obtained using a different operating model that features a trimmed down public transit institutional structure.

For this most troubling and challenging analysis, Professor Savage should stay away from the windows if he attends Monday's Lipinski Symposium on Transportation Policy. He might find himself the victim of a savage shove from one of the ranks of the many who are fighting so hard to preserve the transportation status quo.


Anonymous said...

He's not the first to notice.

Anonymous said...

Unfortunately, Illinois politics will not let it happen.

Davey said...

Savage's proposal is, or closely resembles, one proposed back in 1998 by the MTA.

When I stumbled upon it (probably through this site), I found it very exciting as a way to put Chicago-area public transportation back on the cuting edge. I couldn't find any followup or serious discussion of it, and it seems to have sunk without a trace. I highly recommend that anyone interested in saving and improving public transit take the time to read it.

I wonder if Mr. Savage misspoke, though, when he seemed to recommend selling off the assets to contractors. How do you open bidding every few years if your buses, trains, and tracks have been sold off to corporate contractors?

Savage seems to imply that the goal should be for public transportation to pay for itself through the fare box, and that this could be accomplished by private contractors despite the CTA controlling the fare rate. There is no evidence that privatizing public service ever results in lower costs or better service, whether we're looking at schools or the military, for instance.

However, bidding out routes as proposed in the MTA report sidesteps the pitfalls of privatization. The CTA keeps the assets and controls the terms of the competitive bidding. It still coordinates the routes and timing of the overall system.

I would go a little further than Savage and the MTA by letting the CTA/etc set the maximum fares and the minimum frequency and services and let the contractors go beyond those if they thought it would help them succeed. I would make ridership growth the primary determinant of subsidy levels. Finally I would set up a system where riders of a contractor's route could vote yes or no on whether that contract could be considered for renewal -- a public veto, in effect.

There is a lot of promise in new ideas like Savage's and, moreso, the MTA's. I think Savage's most important point is reminding us that just keeping the current level of service is not nearly good enough. Daniel Burnham would be sick if he could witness the tiny plans for keeping Chicagoland transit as mediocre as it is.

Anonymous said...

Not the first to notice, but perhaps he also hasn't noticed that both NYC and London recently had to re-assume hired-out services. Or, perhaps, that Chicago has famously hidden patronage and graft under contracts -- anyone need a Hired Truck?