Tracing the Fault Lines Between Public and Private Transit Operators

Should private transit companies enjoy the same federal gas tax exemption that many public operators receive? How does the existence of private inter-city bus service affect the government’s development of new high-speed rail lines? And does it matter that private transit firms are eligible for public subsidies, even if at a much smaller rate than public rail and bus agencies?

30streetcar.600.jpgA private firm recently signed a deal with New Orleans officials to help run the city’s streetcars, seen above. (Photo: NYT)

Few definitive answers to those questions were on offer today at a transit panel sponsored by the Mobility Choice coalition, which allies members of conservative-leaning think tanks with a handful of environmental advocates and urbanists — but the discussion yielded some provocative evidence of the fault lines between public and private operators.

Principally sponsored by the Institute for the Analysis of Global Security (IAGS), the group describes itself as adopting "a fiscally responsible, free market oriented approach to expanding
competition among transportation modes for the purpose of reducing
oil’s strategic value."

American Bus Association (ABA) Chairman James Jalbert, whose group represents private bus and motorcoach companies, lamented that the U.S. DOT’s implementation of its $10.5 billion high-speed rail program — which is expected to receive billions more in federal funding in the coming years — did not envision a role for private-sector firms that already provide inter-city service.

"A good-quality system that could be included in a rail project is now going to be run over by that rail project," said Jalbert, also the president New Hampshire-based bus company C&J. "We want to be part of the solution, but we need to be invited to the party."

Integrating private bus operators into proposed passenger rail projects has to start at the state level, where officials make the call on whether and how to pursue federal bullet-train money, Jalbert added. He described a potentially successful partnership between public inter-city rail and private bus companies as a shared scheduling system, where passengers could purchase tickets for rail during peak hours but an equivalent bus journey during off-peak times, when operating a motorcoach could be more efficient.

Tom JeBran, ABA vice chairman and president of Trans-Bridge Lines in Bethlehem, Pennsylvania, went further than his private-sector cohort in suggesting that public transit agencies receive an unfair advantage, thanks to their operating subsidies and exemption from the federal gas tax.

"The only way I’d support" raising fuel taxes and adding new interstate tolls to pay for nationwide transport improvements, JeBran said, would be if both private and public transit operators got an exemption from those new charges.

Robert Padgette of the American Public Transportation Association (APTA), the transit industry’s leading D.C. trade group, fired back at JeBran’s depiction of government subsidies that go only to public operators. The U.S. DOT’s Section 5311 grants, Padgette noted, do make taxpayer funds available to smaller, private inter-city bus companies.

While Jalbert distanced himself from JeBran’s push for a tax and toll exemption for private operators, he could not help but answer Padgette. The public subsidies for private inter-city bus companies average about 8 cents per passenger, Jalbert told the panel attendees. "With all due respect," he quipped, "it’s bug dust."

(ed. note. This post was edited from an earlier version.)

  • Dan Johnson-Weinberger

    Amtrak’s Thruways program is the best current example of successful partnership between bus operators and rail. Private bus operators can participate in the program and get listed in Amtrak’s ticketing system (for free). Amtrak sells a ticket on their route and gives all the money to the bus operator on a monthly basis. It’s a win-win, because the bus operator has access to more passengers through Amtrak’s network and Amtrak’s rail network is expanded to more places (like Rockford, IL and Madison, WI) that are currently served only by bus.

    The bus operator I spoke with said he was pleasantly surprised at how well Thruways is administered (he is paid on time every month). I’d encourage bus operators to try to participate in that.

  • marin

    Let me get this right…a rider with a choice is going to choose, say, Greyhound over a high-speed rail line? Apples and oranges. If I’m a private bus operator, this is not even worth worrying about

  • Oh, go ahead and let the private bus operators have their tax breaks and exemptions. But, with the caveat that they can’t just pocket the funds but they have to spend more money on capital improvements, safer buses, newer buses, friendlier drivers, cleaner buses, better service, more frequent service, safer bus stops, cleaner drivers and other improvements to the actual operations.

    Private buses can compete with high-speed rail under the right circumstances. For example, take Tokyo’s equivalent to the Flyaway bus. Slower than the Narita Express, but also cheaper and stops at convenient locations and operates at convenient, scheduled times.

    Also, they make all of the above-mentioned improvements and then some — at the airport, well-dressed bus attendents BOWED to the departing buses, highest form of respect I have ever seen given to transit!

  • Ernest B. Cohen

    I think that all transportation modes should pay energy taxes. That would discourage waste of energy, like buses idling. It would certainly discourage air transportation. I would like to see all transportation operators, public and private, eligible for subsidies from these taxes. I would set aside a pot of money, and then let any operator apply for a share, based upon such statistics as vehicle trips, seat miles or similar measures of service provided. The tax should be based on net energy used, so that electric systems that return braking energy to the grid would get full benefit of their efficiency.

  • Jeff Brown

    Private transit operators can get funding when they agree to jump through the same hoops as public transit:
    – public hearings for fare increases
    – public hearings for changes in service
    – requirement to provide service for all passengers
    – requirement to serve unprofitable regions
    – requirement to operate in dangerous neighborhoods
    – operate 24 hours
    – operate weekends
    – operate within walking distance of all residents
    Private transit serves the public by carrying large numbers of people in a single vehicle; that’s worth funding regardless of what happens to public transit. Public and private transit serve two different markets; mixing them only leads to problems for both.

  • Zach

    Privatizing things such as high speed rail, will allow for better spending on tracks and trains people won’t have to worry as much about how much goes into the budget

  • I participated in the Mobility Choice Forum. It was as a real discussion. This is not an either/or debate. It is all about how. How do we move people cost effectively and efficiently, how do we increase access to service, how do we pay for it? It also is not about buses running head to head with HSR as a major issue. It is using federal dollars to subsidize competition, service is great if it improves options, reflects costs, and works to build rather than kill choices. The final year that the Amtrak Pioneer ran the per passenger subsidy was $27k per passenger. Really. You have got to think that there is a more efficient and effective way to move people. The comparison with HSR and bus is when people have a choice they do often take the bus, Bolt or the Mega between NYC and DC. The choice is $33 dollars round trip with wifi and outlets or over a $100 dollars one way on Acela with no wifi. The Amtrak thruway system kind of works but needs to be improved. I think the best example of an integrated system is in Oregon. The California system is a closed system. Only rail connected thruway buses are allowed into their network not all connecting services. The Oregon system tries to get every connecting bus into the Amtrak system and then also into the Greyhound system. The options are where people are looking for them.

    The friction in this discussion comes from highly subsidized rail coming in and running right over existing and available bus service. In the end this reduces the transportation available in rural areas because the train doesn’t stop there but kills the bus that does with federal tax dollars. Amtrak has done this in the past and the bus industry just wants some assurance that this is not going to happen again. The bus ultimately is what we want feeding the train system. The more trains and the more speed the more capacity and unless we are talking about huge parking lots we need to work on our ground transportation access within the rail corridors and to the rail corridors.

    Intercity bus usually runs 360 to 365 days a year and by law is accessible with 48 hour notice now. Each lift pick up uses 6 seats and takes 15 to 20 minutes. That is the equipment that is available in the USA. If there is no notice it can take longer because people have to be moved out of those seats. Again this is not either/or it is how. How can we make this better? Private operators are not the answer but we are part of it. As we improve the system I think we need to look for ways to improve how the system works: interoperable information between modes, intermodal access a given at any federally funded facility, and accountability and reward for increasing access to transportation choices in transportation service areas.

    I really think we have a chance to put together an amazing system if we can only imagine it.

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