Out of Control Policy Blog

Competitive Tendering Could Address Metro's Financial Woes

Instead of asking for a tax increase to address their financial problems, Wendell Cox urges Metro (D.C.'s transit agency) to consider "competitive tendering," allowing private companies to provide transit services with reduced subsidies. In today's Washington Post, he writes:

    "Perhaps the most promising solution to Metro's cost overruns is "competitive tendering," a system by which private companies compete for the right to provide service at lower subsidies. Competitive tendering already is used for bus service in Montgomery, Fairfax, Prince George's and Prince William counties, although the counties continue to set fares and decide where and when buses will run.

    Some of the world's largest transit systems have converted to competitive tendering. It started with London's famous red bus system. Since 1985 costs per mile on the London system have been halved while service has expanded. Copenhagen, Adelaide and Perth also have competitively tendered their bus systems, with savings of 20 percent or more. Stockholm has competitively tendered not only its bus system but its commuter rail system and subway, which carries 50 percent more riders than Metro does. Stockholm's savings have exceeded 50 percent.

    Significant savings also have been achieved in the United States through competitive tendering in San Diego, Denver, Los Angeles, San Francisco and Las Vegas."

(Via Planetizen.com)

Leonard Gilroy is Director of Government Reform


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