Public initiatives: Keep the TTC public

My attention was brought to some very well-done videos yesterday (thanks, commenter John G) about privatization of public transit utilities--and the risk that such an action could present. The videos, created by KeepTTCPublic.ca, present a two-part argument against privatization in general, and against privatization of the Toronto Transit Commission in particular.

To be fair, privatization isn't quite as completely negative as the videos say. For instance, partial privatization--in the form of contracting out services--has worked for Toronto and York, according to an article in the Toronto Star. But putting aside to the standard arguments in favour of privatization--namely, that private owners are more innovative and less bureaucratic, and thus (the reasoning goes) more able to generate cost savings--consider this quote, also presented in the above Star article, from Marie Chapple of the Phoenix Public Transit Department:

“As we reduce service, we will reduce employees. Through the private contractor, it’s easier to expand and reduce staff,” she said.

Emphasis mine. In Ottawa, many of the arguments for privatization of OC Transpo seem to go back to the labour costs for bus operators. And basically, the idea is that the city--for political as well as ethical reasons--isn't as keen on holding a hard-line or hiring 'scabs' to bring down labour costs as a private owner might be.

But is this a good thing? It's certainly idealistic, but it would be a lot better for all involved to reach a mutually acceptable salary structure, instead of contracting out services--which, it could be argued, essentially contracts out the unpalatable responsibility of cutting costs by firing people.

Could private transit gets public transit moving?

The site Greater Greater Washington, a forum devoted to exploring ideas to improve living in the Washington, DC area, spent some time this week wondering whether a private model could be better suited to serving global public transit needs than public utilities currently can.

Steve Offutt, a contributor to the website started with a few statements of fact, and took his analysis from there:

Many of our transit systems are bursting at the seams, yet only provide about 2% of trips nationwide. It takes decades to build new transit projects. The existing public agency model for providing public transportation services is totally inadequate to rapidly meet the challenges we face, particularly the urgent need to deal with climate change.

From there, Offutt goes on to examine whether a private model, faced with a need to be fiscally responsible but an insatiable appetite to serve a need quickly and effectively, could help cities develop their public transit infrastructure to better serve their citizens--and, most importantly, to make that service available quickly. His focus is on Washington, but the ideas translate well to the City of Ottawa, as well.

The key, Offutt suggests, is finding innovative ways to make public transit beneficial to all parties:

The trick is to make the financial incentives align with the societal goals. If the goal is to reduce miles being driven, then private companies could be paid per mile reduced. They would then strive to find solutions. One example of this is the contract Houston has with a company called NuRide (disclosure: I used to work for NuRide). NuRide is paid by VMT reduced. They offer incentives to people to rideshare and take other modes. If they are successful, they get paid; if not, they don't. So it is in their direct financial interest to find the incentives that will get people to change their behavior.

It would be a drastic embarkation from the way transit is currently modeled, but perhaps that's just what public transit utilities need to get themselves truly effective at serving people's needs. With calls for audits into the management of OC Transpo, a new management model may be necessary; a private model is just one of many possibilities.

Another call for some form of transit privatization

Don Butler writes a feature in the Citizen that makes several arguments in favour of at least partial privatization of transit service in Ottawa.

Here is a quick breakdown of some of Butler's musings and conclusions about privatization...

Pros:
- Cheaper to operate on the whole (wages for operators tend to be lower on average, and ceilings are lower and harder to reach)
- Theory that private-system operators are less likely to go on strike than public counterparts (many disagree with this assertion, including Ottawa transit committee chair and councillor Alex Cullen)

Cons:
- Might fragment Ottawa's integrated transit system, which would lead to rough transition
- More costlier insurance and other costs avoided by public system

That's really just a glimpse into some of the arguments in the story. There are several reasons to take this article very seriously, and TransitOttawa.ca will no doubt have more to say about privatization issues in the future.

Especially about Denver. That transit system consistently generates a lot of buzz, including within the above-linked story.

For now, though, we will superficially object to privatization because, well, this website's title would be made instantly obsolete by such a move.

Another call for (at least partial) privatization

In yesterday's Ottawa Business Journal, Walter Robinson wrote about Ottawa's current transit dilemma(s). In a column bizarrely tagged as a "news story", Robinson recommended that OC Transpo at least be run as an arm's-length agency of the city, because "debates over route choices, human resources and customer service are left to managers, as opposed to politicians."

Robinson then went on to tackle the issue of privatization. He painted his recommendations as neither black nor white--transit can be only partially privatized, he wrote.

Privatization could take many forms, from competitive tendering of various route choices to better-sourcing office and maintenance functions. And this isn't about union busting, as local organized labour advocates will surely charge. Successor rights prevail under labour law whether the city or ABC bus lines is in charge.

But cities such as Las Vegas, Denver, Boston, and San Francisco, along with those in Europe and Asia, have contracted out parts of their systems and realized, according to dozens of studies, significant savings and service improvements.

(For the record, Denver's Regional Transportation District won a 2008 Outstanding Public Transportation System Achievement Award from the American Public Transportation Association. It also won that award in 2003 and 1993.)

Robinson wrote that OC Transpo "will suffer a marked and sustained ridership decline thanks to this strike". Those who are wary of transit, he continued, will ask how much taxpayers should subsidize the service: "50 per cent, 60 per cent or 70 per cent, or more?"

He went on:

From my vantage point, a transit system two-thirds rider-financed and one-third subsidized would be ideal, regardless of ownership and service structure. But international experience has shown more often than not (yes, there are some failures – in South America, most notably) that to move to this, privatization (selected, partial or full) is the proven route to follow.

And then snuck this in:

Labour disruptions are also much rarer in privatized systems.

Robinson is no stranger to privatization debates. Not only is he a former chief of staff to mayor Larry O'Brien and candidate in the 2004 federal election, two venues of public life where such issues pop up, but talking about this is what the man does for a living.

According to his bio (scroll down a bit) at the TACTIX Government Consulting website, Robinson provides advice to clients on a range of issues, including P3s--in lay terms, public-private partnerships.

Just another voice in the privatization debate.

Talk Ottawa talks about privatizing OC Transpo

On Monday, Jan. 12, Rogers TV's Talk Ottawa program will be hosting a panel to discuss the possibility of and issues surrounding privatizing Ottawa's OC Transpo service.

On the panel will be Guy David of Gowling Lafleur Henderson Law Firm--a business lawyer who was significantly involved in the privatization of air traffic control at several Canadian airports--as well as Caroline Andrew--visiting professor at the University of Ottawa with a research interest in municipal issues and intergovernmental relations--and College ward councillor Rick Chiarelli.

The show will be at 7 p.m. on Monday evening, so tune in and feel free to call to ask your questions about the feasibility of the idea. If you miss the live broadcast, the show is syndicated several times later in the evening and the following day.

Funding Ottawa's transit plans, part five: Privatisation

The recent strikes of the Toronto Transit Commission has once again raised the idea of at least partial privatisation of the Torontonian transit system, according to the Globe and Mail. Would it be prudent for Ottawa to look into such a possibility? The story lays out the background, and runs over a few of the pros and cons:

Advocates say privatization will cut costs and improve services across the city. Detractors warn that it could lead to a mish-mash of companies servicing only the most popular routes, leading to poorer overall service, less central cohesion and no significant savings for the city.

“For thousands of Torontonians, the TTC is critical to their lives. They'll be very careful about changing the status quo,” Ward 34 councillor Denzil Minnan-Wong said. “Just selling the TTC outright to a private company and putting a ‘for sale' sign outside the doors of the TTC is unacceptable to the public, because it's so important to them.” So what is there to gain or lose by whittling down the TTC?

Despite regular commuter gripes about late service, the TTC is one of the most efficient transit systems in the world, in terms of operations, according to a TTC-commissioned study in 2003.

[...]

He [former Toronto budget chief David Soknacki] argues that it's vastly outdated: People no longer simply live in the suburbs and commute to the core. They need flexible service.

But outright privatization, he warns, could lead to private enterprise “cherry-picking” the most profitable services – and leaving the taxpayers to fund the rest. Instead, Mr. Soknacki suggests something in between: Split the TTC into specialty divisions and create one controlling body to oversee it and other Greater Toronto Area service providers.

“The administration has the choice of making fundamental changes to the TTC or watching those changes being made for it,” he said. “It's a shame, because the TTC could be leading [transit provision] instead of following.”

The story went on to talk about the city of London, England, where privatisation of public transit was done with mixed results:

London is held aloft by both camps as an example of the pros and cons of privatization. Those trumpeting the cons include TTC chair Adam Giambrone, who points to the failed privatization of London's iconic Underground as a cautionary tale. Contractors were paid to maintain and renew the Tube network while the government agency Transport for London (TfL) retained ownership of tracks, trains and stations.

But last year the five-corporation body called Metronet Rail BCV Ltd. that took on two of the three $34-billion contracts incurred debts of at least $4-billion, leaving TfL and the City of London to cover the loss. “There are no other major centres [outside London] that run privatized operations. There's a reason,” Mr. Giambrone said.

Above ground, however, London's bus reform is a glowing privatization success story, said Ben Dachis, a policy analyst for public-policy think tank the C.D. Howe Institute.

“The bus services in the U.K. after privatization are just off-the-charts better than they were before,” he said. “Prices are way down, service is way up. … The best way to get around London these days is on the bus. No one takes the Underground.”

I know Ottawa has tried some P3 (public/private partnership) experiments and, I'm no expert, but I don't think they've been either glowing successes or abysmal failures. The biggest problem for me would be ensuring some level of co-operation between various organizations, but the City of Ottawa already has to do so between OC Transpo and STO (Société de transport de l'Outaouais, the transit authority across the river).

Anyway, it's another option to think about.