Tom Downs: The Best of Both Worlds in Transit

November 12, 2012 10:00 am

by Charlie · 15 comments

The following is a guest Op-Ed by Tom Downs.  It is submitted as a response to a continuing discussion in the AJC regarding the potential privitization of MARTA.

As the former head of New Jersey Transit, CEO of Amtrak, President of the Eno Foundation for transportation research, current chair of Veolia Transportation’s North American Advisory Board and Chair of the Board of the Washington Metro Area Transit Authority, I am acutely aware of the challenges facing public transportation systems.  At MARTA, operational challenges are well-documented and there’s a $33M deficit projected for next year.  Something must be done.

Some are calling for complete privatization of MARTA, because it would help reduce costs. Others have concerns about private sector involvement, because transit is a vital public service on which many riders depend for their livelihoods.  I’ve been an executive in both the private and public sectors, so I know there are proven solutions that deliver the best of both worlds.

Today, the private sector helps deliver excellent public transit in many cities.  In fact, some 20% of transit systems today contract out all or portions of their operations to the private sector.  That’s up from less than 10% in 1998.  I am not referring to outsourcing payroll or other administrative services, which is a small step that won’t fix the broader problem. Professional transportation providers can deliver high quality bus and rail service at lower cost, preserving and creating well-paying jobs with good benefits.  Their size, years of experience, systems, technology and business processes enable them to create efficiencies that make their service more affordable. To take one example, the city of Denver contracts over half of its transit system and realizes savings of 26%.  The Center for Urban Transportation Research at the University of South Florida estimates that private contractors average 25% savings over the public sector.

Transit remains a true public service when the private sector gets involved.  MARTA would continue to be subsidized by federal and local grants, like all transit agencies.  Further, MARTA or its Board would retain control over all key policy decisions, including service levels, fares, annual operating plans and more. The city would retain ownership of all assets, vehicles and facilities.  MARTA employees would remain members of the same unions. The private sector company would operate under contracts with specific performance standards. That means that a key voice often lost in this debate – the taxpayers – would have a strong guarantee that they’re getting their money’s worth, through real competition.

It’s not just about costs.  Quality is contractually enforced. Las Vegas utilizes private sector contractors for all of its service, and the Brookings Institution called them one of the country’s ten best transit systems.  San Diego contracts out half of its transit system, and was recently voted the outstanding operator of public transportation in the U.S.

Around the country, the results show that it works.  In New Orleans, a private contractor took over the transit system in 2009.  Operating costs are flat, with a 30% increase in ridership, 53% decrease in accidents, and 66% decrease in customer complaints. The contractor actually decreased the hourly rate that the city government pays for the bus/streetcar service.  A new streetcar line is being built for the first time in 50 years – generating more than a billion dollars in investment in new hotels, housing and retail.

Private sector companies make productive union relationships a top priority. In Nassau County, a new private sector operator recently concluded a labor contract with five years of guaranteed wage increases, health care and other benefits, that was ratified by a 90% union vote.

MARTA today faces a crisis.  The status quo is not sustainable.  Any solution must be sophisticated, well crafted and customized for Atlanta’s unique circumstances.  Examples from around the country show that a well-designed relationship with a private operator can deliver high quality transit at a price Atlanta can afford.

AMB November 12, 2012 at 10:58 am

What provisions would be provided to reimburse Fulton and DeKalb counties for all their investment in MARTA while the state did nothing?

Harry November 12, 2012 at 11:04 am

Are you serious?

Daddy Got A Gun November 12, 2012 at 12:32 pm

I think you misunderstood what Mr. Downs is writing about. He is pointing out that MARTA could reduce its spending by 25% if it outsourced its operations to a private company. MARTA could use that money to expand service or reduce rates.

AMB November 12, 2012 at 11:15 am

Harry, sit down and let the adults talk. Fulton and DeKalb have been charged an extra penny for years that pays for MARTA. The state bullies and blow hards but coughs up hairballs, not cash.

Harry November 12, 2012 at 11:24 am

You guys voted for the investment, and maybe some of you benefit from it. What makes you think anybody is going to pay you to operate it? You have to pay them.

bgsmallz November 12, 2012 at 2:56 pm

@AMB

I’m a transit advocate and life-long resident of DeKalb county (as were my parents and my grandparents…). You and the rest of the crowd that thinks transit is a political grenade to throw at the ‘nasty’ state GOPers and therefore want to spout out tired and inaccurate assumptions about the state’s investment into our transit system and completely misrepresent the history of the system don’t care about regional transit. Or, if you do, you care less about it than about being a jerk to the only entity equipped to support it.

If your definition of an adult is to slap someone in the face and then ask them for money…well…anyway…

We need to convince state leaders to form a partnership…and petulant attacks from people like you and Maria Saporta against that entity does nothing to help that cause.

Here is a thought…read the article above. Privatization is a real carrott in getting the state more interested in supporting transit in our region. Embrace it and sell it for a stake in the game…or whine about how nasty the state is b/c they will not respond to your moaning and insults by giving more money.

The Last Democrat in Georgia November 12, 2012 at 5:17 pm

“We need to convince state leaders to form a partnership…Privatization is a real carrott in getting the state more interested in supporting transit in our region.”

You make a good point about attempting to convince the state to become more interested in supporting transit in our region.

But the really sad thing is that Metro Atlantans absolutely should NOT have to convince their own state government to become more interested in taking a leadership role in supporting transportation (BOTH roads and transit) in their increasingly populated and urbanized metropolitan region.

It is extremely pathetic that Metro Atlantans have to even convince the state to do the job that it should already be doing in taking a constructive, productive, meaningful and useful role in transportation planning and management like state governments in other states with heavily-populated major urban areas took decades ago.

States like MA, IL, NJ, NY, CA, MD, VA, TX and even neighboring NC and FL take a much more active, if not dominant role in many cases, in the management and planning of the transportation networks of their major population/economic centers.

Georgia is virtually the only highly-populated state government that downright refuses to take an active and useful role in managing the critical transportation network of its largest metropolitan region, a region of almost 6 million people that is the logistical center of the Southeastern North American continent.

bgsmallz November 13, 2012 at 11:12 am

Great….and the solution to that problem is what exactly? Telling our legislators how stupid they are or making rational and sensible calls and concessions to try to bring them to the table?

Hate to break it to you, but most of the population of Georgia is in metro Atlanta. ‘Metro Atlantans” have a really strong voice in our state government…and continue to re-elect the same people who have the same opinions about transit. That’t the problem…this isn’t a ‘city vs. state’ issue anymore. It is an issue of ‘core vs. OTP’ or however you want to draw it up. It’s OUR issue and we need to own that WE haven’t been able to work together…if it continues to be an issue of ‘they’ and ‘you’, it isn’t going to get solved. And that is why the tired lines are just that…tired.

ITP folks need to stop looking at it as us vs. the state and re-hashing the same bull. They need to look at it as a new partnership with mutual benefits to ITP and OTP folks…how do you get OTP folks to the table? Efficient and privatized solutions that will provide service to their areas sooner vs. later. NOT by saying it’s your fault that we are behind Texas and North Carolina (even if that is this case).

The Last Democrat in Georgia November 13, 2012 at 1:05 pm

It’s not just transit that the people that Metro Atlantans and Georgians elect to the State Legislature have a funky additude about, it’s TRANSPORTATION as a whole that the same idiots that get elected over and over and over again to the Legislature have a self-serving and shortsighted additude about (see the highly-dysfunctional Georgia Department of Transportation as the prime example to that theorem).

And the point is that it is unfortunate that state lawmakers have to be brought to the table to address transportation matters relating to the most important region of their own state, a reflection of an amount of dysfunction that is clearly NOT a recipe for success on the transportation front.

If the state has to be incentivized to pay attention to the building transportation problems in their own front yard at this late date, transportation issues that many of them see with their very own eyes and experience personally everyday, then this state is in REALLY big trouble.

Heck, one need to look no further than to the roads side of things to see that this state (specifically Metro Atlanta) is in really big trouble when it comes to transportation as there are multiple road projects that should have been completed more than 20 years ago that the state still cannot find the money to even start work on after two decades.

Projects that should have been COMPLETED in the neighborhood of 20 years ago like the reconstruction of the I-20/I-285 West interchange, the reconstruction of the I-285/GA 400 interchange, the construction of HOT/HOV-3 lanes on I-75 North in Cobb County and I-75 South in Henry County, the construction of a network of truck lanes around I-285 and on stretches of I-75, I-20 & I-85 OTP, etc are still in need of the funding after two decades of inaction and that does not even include the transit projects that are outstanding within the metro area (commuter rail, commuter bus, etc).

Seriously, good luck with that “getting the state to the table thing” because you are seriously good to need all the luck that you can get these guys to do something about transportation that is actually productive at this very late date.

If the state is not already seriously at the table in not only playing the game, but leading the way, dominating the game and playing to win at this late date then chances are that they never will be until there is a serious change in leadership style.

bgsmallz November 13, 2012 at 2:33 pm

See…this is my point. You are griping about the lawmakers…it isn’t their fault that they get elected. It is ‘us’…you and me and everyone else….”Metro Atlantans”, as you called us. You have to own it, too. If you don’t, it will never get solved.

My point isn’t that we need to get the ‘state’ to the table. My point is that we need to get ‘us’ to the table b/c enough of ‘us’ realize there is a problem that if we stop pointing fingers on who is to blame maybe we can also find that we can let go our grip just a little bit on all of our pre-conceived notions of what might be possible.

You are choosing to double-down on 5 instead of 11. It doesn’t make any sense.

The Last Democrat in Georgia November 13, 2012 at 3:09 pm

Metro Atlantans do “own it” so to speak, an action that they demonstrated by overwhelmingly voting down that horrible T-SPLOST which was a way of both ITP and OTP coming to the table.

It’s just that local politicians were the ones who were sent to the table and like politicians do, many of them looked after their own self-interest first above the interest of the region by attempting to secure funding for local special interests, local developmental efforts and pet projects (like trolleys and beltlines or a freeway in abandoned right-of-way of the wildly unpopular Northern Arc) instead of focusing on transportation items that can benefit the entire region (like truck lanes, commuter rail and commuter bus).

Getting ITP and OTP to the table as you describe was an action that was just tried with the failed T-SPLOST referendum and it was an action that did not workout all that well.

ITP and OTP can come to the table all they want to form and reform partnerships that already exist (like the Atlanta Regional Commission), but like I stated before and like you have stated until we get either a change in leadership (stop electing the same clueless, shortsighted, self-serving and uncaring idiots) or at least a change in direction from state leadership, we are going to be stuck with the same problems with transportation because at the end of the day it is the STATE that has to coordinate the funding of the construction, operation and management of transportation solutions that are going to lean heavily on state-owned and state-maintained transportation infrastructure (state highways, Interstates & state-owned railroad right-of-ways).

The partnerships, the plans and the recognition of what needs to be done by the more level-headed amongst us are all already there, it is the leadership of the STATE that is missing from the equation.

AMB November 12, 2012 at 3:06 pm

The last time Georgia tried transportation was the TSplost. How did that work out? Oh, and the massive mess with the 85 tolls. Oh and the massive mess up with the public private 75 toll roads. Oh and the revolving door and corruption at the DOT.

And you want them handed MARTA on a silver platter? Think again, bucko.

The Last Democrat in Georgia November 12, 2012 at 4:48 pm

Good points, all. Privatization of what remains of MARTA can be a good starting point in what should be a continuing quest for a reformed approach to transportation planning, especially as it pertains to the region and, most importantly, the state, whose glaring absence from meaningful, constructive and useful transportation planning becomes increasingly apparent with each passing year.

atlanta_advocate November 12, 2012 at 8:12 pm

@bgsmallz:

Formerly wicker, changed my handle.

“I’m a transit advocate”

That is part of the problem. What is good for transit is not necessarily good for Atlanta, or more to the point Atlanta-Fulton-DeKalb. Also, the suburbanites are not against transit. They’re just against Atlanta. So what good is transit – or any transportation system for that matter – if it provides no benefit to Atlanta?

Don’t think that by dropping the MARTA name and changing the governance that the state is going to act in the best interests of Atlanta. The opposite would happen. The GOP would strip to the bones whatever serves the heavily black and Democratic constituency in Atlanta, privatize whatever they can to make as large a profit as they can for their buddies, and then dedicate all the resources to sending express buses, light rail and what have you to the “job creators”, “tax payers” and “real Americans” in Hall, Gwinnett, Cobb, Forsyth, Rockdale, etc. Even the GOPers who would intellectually know that it is a bad deal would go along with it because that is how you get elected to be a GOPer in this state. Given the chance, the GOP would leave Atlanta cut off from both transit and the better roads, the jobs and high income workers would leave as a result, and they would have finally made their self-fulfilling prophecy that they have been working so hard for so long to achieve – turning Atlanta into the next Detroit in order to prove that “those people can’t govern themselves so they need us to come impose order on them” – come to fruition. Don’t pretend as if the goal is anything less, and that is what the decades-long quest to undermine MARTA, take away the airport, the cityhood movement in North Fulton – and when that didn’t achieve the desired result to split North Fulton off into Milton County – is all about.

Thinking that the state is ever going to form a partnership with Atlanta is naive. Again, even the folks who want to do it can’t because they know that they would get voted out of office if they do. Case in point: Nathan Deal. He got behind a T-SPLOST plan that had plenty of benefit for the suburbs, got torched for it, and now has to join the Atlanta bashing crowd in order to fend off a primary challenge in 2014. Atlanta and all its institutions – including MARTA – has nothing to gain by dealing with people politically and ideologically invested in its going belly up, and pretending otherwise won’t make that fact go away.

bgsmallz November 13, 2012 at 11:17 am

Ok…so that’s how its been done for the past 40 years…and it hasn’t worked.

My argument would be that the we are where we are not only because the state will not work with Atlanta…but also because the citizens of Atlanta have given up on trying to work with the state and have become overtly cynical to the point of being stuck in their own ideals (are you just going to wait around until the suburbs go blue in order to fix transit? Otherwise, what’s the plan, Stan?).

The dissolution of a relationship is almost always a two way street. That’s why I applaud Mayor Reed and Gov. Deal for continuing to try to break down that barrier…and I encourage them to continue to do so.

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