EFFECTS OF COMPETITION FROM THE PRIVATE SECTOR ON THE EFFICIENCY OF MASS TRANSIT: A CASE STUDY

This study explores the implications of private transit firms competing in markets traditionally served only by a government monopoly. Focusing on the emergence of privately operated subscription buses in an important Chicago rail corridor, the study explores how a shift in riders and resources from the public to the private sector is likely to affect the operating efficiency of transit. Quantitative tools are used to assess the ramifications of competition between public and private transit operators; the findings are used to recommend socially desirable legislation and regulatory change. The divestiture process of the public carrier is modeled using Interstate Commerce Commission cost data and an industry costallocation technique. Labor laws, capital replacement policies, and other constraints on divestiture are taken into consideration in estimating the potential long-run savings from public carrier service cutbacks resulting from ridership shifts to the private sector. These estimates are used to demonstrate how a shift in market share from the public to the private sector is likely to affect long-run operating efficiency-measured in terms of average cost per passenger-mile--of transit services in the corridor. The findings have important implications for assessing the future role of the private sector in the urban transit industry.

• Record URL:
  • http://onlinepubs.trb.org/Onlinepubs/trr/1984/980/980-005.pdf
• Summary URL:
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• Supplemental Notes:
  • Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved. Publication of this paper sponsored by Committee on Socio-Economic Evaluation of New Transit Technologies.
• Authors:
  • Schwieterman, Joseph P
  • Schofer, Joseph L
• Publication Date: 1984

Media Info

• Media Type: Print
• Features: Figures; References; Tables;
• Pagination: pp 31-37
• Monograph Title: Techniques for making key transportation decisions
• Serial:
  • Transportation Research Record
  • Issue Number: 980
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Competition; Economic efficiency; Private carriers; Private enterprise; Productivity; Public transit
• Uncontrolled Terms: Efficiency
• Old TRIS Terms: Private operators
• Subject Areas: Administration and Management; Economics; Highways; Planning and Forecasting; Public Transportation; I10: Economics and Administration;

Filing Info

• Accession Number: 00450522
• Record Type: Publication
• ISBN: 030903762X
• Files: TRIS, TRB
• Created Date: Nov 30 1985 12:00AM