Friday, April 06, 2007

More on How to Pay for Public Transportation

There were some interesting comments on the last post, about whether or not the NYC subway should be free.
One thought was that although you could save some money in some ways, making the subway free would cause an overwhelming increase in ridership that would create more expenses for maintenance, etc. I do agree that you'd probably have more homeless people in the subway, unless you took some of the staff who currently deal with fare collection and turned them into security guards instead. But more riders in general? Most people don't ride the subway and buses because they have nothing better to do-- they ride them because they have to, because it is the cheapest way they have of getting to work or school or doctor's appointments. Some people choose to ride bikes or walk instead of taking the subway, but I think that choice is often motivated just as much by concerns for health and the environment as by money. So I'm not sure who all these droves of people would be who currently aren't using the subway only because it costs $2.00 a ride.

The other interesting suggestion was to privatize the system. The assumption is that a company motivated by profit will run the system more efficiently than a government bureaucracy thereby making it cheaper and better for everyone. But how well does this ever work in practice? I can't say I'm familiar with too many examples of public transit being privatized other than the rail system in the U.K., and from anything I've ever heard or read about that, it either didn't work all that well, or was a total disaster, or something in between.
What I see as the problem is that government subsidies are still involved, and more importantly, when you privatize something like public transportation you are giving a for-profit company a total monopoly, so in order to prevent the riders from getting screwed you have to regulate the industry, and then the company running it tries to cut corners in other ways, and you end up with a decrepit, unsafe public transport system that is no better organized than it ever was and no one is happy except for a few people who probably got rich along the way. I kind of feel the same way about Edison Schools-- it's nice to bring more efficiency to public institutions, but is there really a place for profit margins in public education?
Perhaps I'm being naive here and I certainly can't claim to be well-versed in the intricacies of the financing of public transportation or schools. So I invite all comments and opinions-- have at it!


HC said...

Prices serve to ration things. I remember an economic history lecture that described the early days of the Soviet Union. Some of the planners said exactly what you did: "People just use the trains to get where they are going, so we'll offer rides for free, and things will go on as usual." And in a matter of weeks, the trains were so packed as to be unusable. They had to reinstitute prices to keep things running. Even a nominal ticket charge flips on the cost/benefit switch in our brains.

I do think that public transportation serves a lot of social purposes (reducing pollution from cars, reducing crowding on sidewalks, etc.) that make it worthwhile for governments to subsidize rail systems. But the ridership should bear some of the costs, as well.

mOOm said...

Whether privatization works or not depends entirely on how things are structured. The British privatization was screwed up.... There is also contracting out versus fullout privatization.

Anonymous said...

British Privatization didn't work. The trains are unreliable, there are frequent repairs on all lines (my cousins tend to check for updates EVERY morning!!) and the prices are, in my opinion, outrageous. Even given the difference in currencies, visitors have found NYC's subway to be better and cheaper compared to most transit systems.

I certainly don't think 2$ per ride is too much to pay for a safe, reliable, clean subway ... and yes, it IS clean. You should ride the trains of Bombay to know dirty.