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.