Out of Control Policy Blog

MTA takes over ěprivateî buses

From the NY Times:

The Metropolitan Transportation Authority will take over the management of the private bus lines that serve the most far-flung corners of New York City, the mayor and governor announced yesterday. But the Bloomberg administration will still pay $150 million in annual subsidies to keep those companies afloat.

The success or failure of privatization is often confused by imprecise definitions. Like with many other issues, people often develop impressions of privatization based on headlines like the one for the article referenced above: "MTA Agrees to Manage Private Buses in the City."

Sure seems like private transit failed. After all, why else would the MTA step in? But how private are NYC's private buses? As this study on competitive contracting for bus service notes:

[T]hese private carriers have become so dependent on public support and fixed, no-bid contracting arrangements that they are essentially "private in name only" ...

Still, how likely is it that competitive transit privatization will come to the Big Apple? People will assume that that option has already failed. Often the better distinction is not private vs. government, but competition vs. monopoly. Instead of trimming costs and improving service with true competition, New York has traded one monopoly for another.

Ted Balaker is Producer


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