It is proposed here that the appropriate course for public policy is to undo the damage done in the past (by regulation of transit) by abolishing the transit authorities, ending the Urban Mass Transportation Assistance Program, and allowing competitive markets in urban transportation. Regulation of the electric street railway operation is discussed. The power of the regulatory commissions depended in part on their statutory authorities and in part on their common-law obligations to provide due process of law to the regulated firms. The question of determining what was due process is discussed with reference to the case of Smith v. Ames (1898). The emergence of the jitney in 1914 in Los Angeles is described as well as its subsequent demise. Putting down the jitney meant that the public would turn to the automobile as a private carrier rather than as a common carrier. It also caused the conversion from streetcar to bus to be made within the economic organization of the street railways. Increasingly, the regulatory commissions were confronted with problems of simply keeping the transit companies in business. The conversion of most major transit systems to public ownership has reduced the significance of regulation. It is noted that American transit enterprises remain a monopolistic organization; the transit industry is overcapitalized--a situation which the federal transit subsidy program tends to make worse. Also, rate-base regulation tends to make regulated industries more capital intensive than they would otherwise be.

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    • This paper appeared in Transportation Research Board Special Report No. 181, Urban Transportation Economics. It contains proceedings of Five Workshops on Pricing Alternatives, Economic Regulations, Labor Issues, Marketing, and Government Financing Responsibilities held by Transportation Research Board. Sponsored by Office of the Secretary, Federal Highway Administration, and Urban Mass Transportation Administration of DOT; Environmental Protection Agency; and Federal Energy Administration. 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.
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    Transportation Research Board

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  • Authors:
    • Hilton, George W
  • Publication Date: 1978

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  • Media Type: Digital/other
  • Pagination: pp 73-75
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Filing Info

  • Accession Number: 00176496
  • Record Type: Publication
  • Files: TRIS, TRB, ATRI
  • Created Date: Nov 14 1981 12:00AM