The Bankruptcy of Mass Transit - Interview With Wendell Cox

Unfortunately, the Port Authority of Allegheny County – Pittsburgh’s government mass-transit bus and rail monopoly -- is a typical example of how far the American mass-transit model has devolved after 40-plus years of horrid management, easy federal money and unconditional support of local and national politicians. To find out if cities elsewhere have found a better way of providing bus and rail service for their people, I recently called our favorite international transit guru and public policy consultant Wendell Cox (www.demographia.com) at his office in southern Illinois near St. Louis.

Q: What's the best mass-transit system in the world?
A: Tokyo. The system is largely commuter rail. There are 10 large, private, profitable commuter rail systems. There are two largely profitable subway systems in the city of Tokyo -- when I say Tokyo, I'm talking about 35 million people stretched over about 3,000 square miles -- one and half times the size of Los Angeles. So I'm not just talking about the city of Tokyo. But in this whole area, transit is profitable. Two big subways in Tokyo actually cover all their operating costs as well as almost all of their capital costs. If you think of the Port Authority, it's lucky if it is covering 30 percent of its operating costs. In Tokyo the commuter rail service is private, they earn strong profits, and they pay for their capital costs and their expansion. Over all the major systems that account for more than 90 percent of the ridership are profitable.

Q: What's the best transit system in the United States -- or is there one?
A: Boy…. Oh, San Diego. I would not call it the best. I'd call it the least worst. San Diego has done some wonderful things. They started contracting out transit service in 1979. Their costs are much lower than other systems as a result. More than 40 percent of their system is contracted out now. They carry a huge increase in ridership compared to what they had in 1980 -- a ridership increase that's far greater than the population increase. Everybody likes to talk about the San Diego Trolley, the light rail line. It is, again, the least worst trolley in the country. When you talk about transit in the United States, you have to be talking about best prisoner awards. These systems are a scourge on taxpayers. There are some that do some wonderful things, but nobody does it all right.

Q: A while ago I came across some figures for the Port Authority in Pittsburgh from the early 1980s. Ridership then was about 100 million a year; it had about 2,800 employees, almost 1,000 buses and about 90 trolleys. In 2006 it had about 3,000 employees, about 1,000 buses and 80 light-rail cars. Its budget had gone up 42 percent faster than inflation since 1982 -- but they were carrying 70 million people instead of 100 million. They had lost 30 percent of their business yet everything stayed the same -- and no one even notices this.
A: I know. You are absolutely right -- and you can find that just about everywhere. There are some exceptions. But the point you're making with respect to the Port Authority makes my point exactly: For most transit agencies in the United States, if they were to write a mission statement that is reflective of what they do, they would indicate that they exist for the purpose of serving their employees and vendors.

Q: What about Europe? Aren't there reforms going on there?
A: Yes. I do a lot of speaking in Europe and I tell them, "Don't think of America as free market. You guys are far more free market than we are." They are contracting out services all over the place. The entire Stockholm system is contracted out. Every bus is contracted out. The commuter rail is contracted out. A good portion of the commuter rail service in Germany either has been or will be contracted out. In the United States we have this massive, stupid, inefficient, destructive federal program that in my view has done more to destroy transit than anything else besides the management-labor cabal and the vendors.

In Europe what they discovered about 15 years ago is that centralized funding creates all sorts of incentives for locals to waste money. So just about everywhere in Europe they have stopped their national transit programs and forced it down to the local level. They've said, "If you want to spend all that money on transit, you go right ahead." In a sense, they de-nationalized funding and they de-nationalized responsibility.

Q: Is the current model of mass transit in the USA dead after 40 years?
A: It's not dead because it is being kept alive by an IV from Washington and taxpayers. The very idea that Pennsylvania wants to impose tolls on I-80 with part of the money going to transit shows the bankruptcy of the whole thing. You are not going to get anything for it. Transit is on life support. It is very politically strong. And you know what, we can keep brain-dead transit alive for as long as there is stuff coming out of those IV needles. But if you want to talk about people, role in the community and all that kind of thing, not only is the model dead, but my sense is that transit is dead. That's because this model has so poorly served the industry and the people that I'm not sure there is anything that can be done to resuscitate it.

Q: Is anyone in the U.S.A. looking at a new model or calling for one?
A: In terms of anyone thinking of an alternative, you have to recognize that it is sort of a self-supporting, incestuous situation. The unions never give up. They hate contracting because it saves 40 or 50 percent. The politicians in Washington love it. You've got a transit industry that's spending $50 billion a year. I don't know what the American Public Transit Association budget is, but I know they walk the halls of Congress all the time. They take members of Congress to their meetings. If you want to talk about lobbying abuses, I'd start with the public sector quite frankly. So the point is, of course, nobody is thinking about changing anything.

Bill Steigerwald is a columnist at the Pittsburgh Tribune-Review. E-mail Bill at steigerwald@caglecartoons.com. ©Pittsburgh Tribune-Review, All Rights Reserved.