Advocates: Private Transit Giant Lobbied House to Weaken Public Transit

The threat of service reductions and fare increases always loomed large over the transfer of Long Island Bus service to a private operator. After Nassau County refused to assume its share of costs for the service, international private transit provider Veolia Transport was brought on to take over from the New York MTA at the beginning of the year.

100 people protested international private transit operator Veolia Transport yesterday in Silver Springs, Maryland. Photo: Transportation Equity Network

It wasn’t long before the ax dropped. Two weeks ago, it was announced that the Nassau Inter-County Express (NICE bus) would see cutbacks to some 30 of its routes.

On Tuesday more than 100 protesters from around the country, representing transit and labor advocates as well as local religious leaders, staged a protest at Veolia’s Silver Springs, Maryland offices. The French-based international transportation service provider operates transit in 150 cities, transit authorities, counties and airports in the U.S. and Canada. From Denver to Tucson, from Seattle to Dallas — there’s hardly a state where Veolia doesn’t hold a contract.

Veolia has also played a role in shaping HR 7, the House transportation bill put forward by GOP leadership. Through the law firm Patton Boggs, Veolia lobbied for measures that would accelerate the transfer of transit service to private operators, according to Sam Finkelstein, a spokesperson for the Transportation Equity Network, which organized the protest. A provision of the bill would reward transit agencies that privatize a portion of their service by offering increased capital funding [PDF, pages 322 and 323]. Veolia did not respond to requests to confirm or deny that the company lobbied for that provision.

Protestors said Veolia’s contracts are a bad deal for transit riders. “We’re here to demand our money back,” said protestor Irma Wallace of Springfield, Illinois. “These private companies siphon profits out of our public services and we’re sick and tired of our municipal services being managed for private profit instead of public good.”

On Long Island, Veolia says its management will bring efficiencies to the system. “I like to call it a reallocation of resources,” Veolia’s Michael Setzer told WABC New York. “We’re taking all the money available from Nassau County and applying it much more smartly than it has been.” But WABC was quick to point out that while Veolia had added a few express routes, the overwhelming majority of changes were service cuts.

Ryan Lynch at the Tri-State Transportation Campaign said a total of 60 percent of Long Island Bus routes will see some reductions. “From our perspective, 60 percent of the routes to see reductions is pretty significant,” he said. “They’re taking it down to sort of a skeleton system.”

Lynch echoed the protestors’ warnings about handing over transit operations to a for-profit entity. Veolia’s Long Island contract requires the company to consult a public “transit advisory committee” if it intends to cut a route more than 25 percent. Veolia has remained true to the letter of the requirement but not its intent, Lynch said. “Most of the cuts have been 23.8 percent or 24 percent, so they are going around the process,” he said.

Veolia was tasked with making up a $7.4 million shortfall in the Long Island Bus budget. But it’s not clear whether all the cuts are related to the shortfall, because private operators are not subject to the same transparency requirements as public agencies.

“Are they cutting to make a profit or are they cutting to improve operations?” Lynch said.

As a result of the protest, TEN reports, Veolia Transportation CEO, Mark Josep, has agreed to meet with the protesters to hear their concerns.

  • Sam

    Great article!  Very interesting perspective, story not often told!

  • Richard Mlynarik

    The cozy interests of public transportation workers and existing capital project contractors are seldom aligned with those of public transportation users or taxpayers.

    Dim-witted knee-jerkery about a slightly different set of actors wanting a piece of the action isn’t helping the larger social cause.

    Public transportation doesn’t have to be a welfare operation solely for the agencies and their hangers-on, you know.  Out of control agency costs are killing service and hurting riders, and hurting the poor most of all.

    Evil Veolia’s not going to stop that alone, but it’s less unlikely to than a unconsidered “progressive” policy of paying more and more for less and less service.

  • Anonymous

    Very glad that I found this article here in Detroit. We’ve recently had DDOT turned over to Envisurage management via Parsons Brinckerhoff and Mayor Dave Bing. Privatization is looming as a hopeful answer to Detroit’s financial woes. The first thing this new management team did was eliminate late night service, fail to provide printed route information, and elongate pickup times for night routes on average 20-50 minutes. There are very real public safety and health issues and the people managing the buses are failing to address them, even creating them through change in procedure.

  • AK

    If you take an objective look at the majority of locations where public transit and school bus employees were replaced by private contractors, you will find greater efficiency and reduced costs. When such systems are run by public entities there is no accountability and no incentive to maintain costs. If the money is about to run out, simply raise fares. With a private contractor, service must be provided as specified in the contract or there are monetary penalties and the possibility the contract may be terminated. This is isn’t a story about privitization, it’s the story of many years of mismanagement of Nassau County’s funds. You get what you pay for.

  • Good management is very important and it’s possible for the public sector to provide it.  A key issue is adequate funding.  Transit (when well-designed and well-executed) creates enormous increases in land values near transit stations and stops.  The lion’s share of this publicly-created land value ends up as windfall profits to a select few who are lucky enough or shrewd enough to own the best-served sites.  Value capture techniques have been used to make transit systems financially self-supporting without raising fares, cutting service or imposing tax increases on the general public.  For more information, see http://www.justeconomicsllc.com
     
     

  • C P Zillliacus

    No such place as Silver Springs in Maryland.  Now there is a Silver Spring in Montgomery County, Md., but it grates upon me when my Silver Spring is confused with the plural one in Florida.

  • Libus

    Long Island media has reported again and again how the modest reductions by Veolia in Nassau pale in comparison to the cuts proposed by the MTA, a public agency.  Veolia was asked to run the system essentially starting with a $50 million deficit and through various cost savings that had no impact on riders and employees, brought that number down substantially.  In fact, most of the changes on those 30 routes involve schedule changes of from 2 to 10 minutes — essentially, these riders follow a new schedule that, by the way, is expected to improve on-time performance and actually reduce waiting time.  As part of this service redesign, tens of thousands of commuters to New York City will have the option of taking new express buses, saving some 40 minutes from their daily round-trip commute.

  • Anonymous

    Wait a minute.  The Tea Party congress is trying to help the French?

  • Sprague

    Interesting to read the range of opinions expressed in the various comments, especially Richard’s sharp critique.  Although somewhat off-topic, it is unfortunate and counter productive when transit operators (public or private) put their own needs or wants before those of their riders.  From this rider’s perspective, many transit agencies seem to put their own priorities first: like having passengers wait in the cold at the end of the line while their bus, streetcar or train idles with the driver hanging out inside.  Or service schedules with service operating at regular intervals but without any apparent consisitency to the schedule (instead of the bus scheduled to come at ten after each hour, it varies ever so slightly each hour).  Or not making use of “not in service” buses to pick up revenue passengers, especially at times or in directions with very sparse service.  Of course, other industries also loose sight of the needs of their customers… it’s not just a transit problem.

    Thank you for pointing out who might win if proposed legislation passes.

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  • Captzrvc

    Public transportation should not be in the business of making money. It should be in the business of serving the riding public. The MTA should be cleaned up starting at the top. But bringing in a company that’s sole purpose is to make a profit for the share holders is not what’s best for any local government.

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