Management & Operations

Economic, political climate spell chance for more public-private collaboration

Posted on March 1, 2001 by Frank Di Giacomo, Publisher

The combination of what appears to be a strong outlook for public transit and the need for motorcoach operators to diversify should spell a unique opportunity for both segments of the public transport industry to work together. Yet, if the two fail to work together as some modest experiments have shown that they can, they might turn into bitter rivals, which will help neither side. Two very important documents contributing to that situation were issued within weeks of each other last winter. The first was a gloomy report sponsored by the United Motorcoach Association, one of two primary industry groups for that segment. It concluded that the recent downturn in traditional motorcoach travel markets would continue for the foreseeable future. Importantly, it suggested that operators diversify by trying to serve the growing commuter market. The second document was released shortly thereafter. It is the Bush Administration’s Fiscal Year 2002 budget proposal which, if adopted (and it looks very likely), will spell very good news for the public transit segment. It suggests that spending will rise in the year beginning Oct. 1, 2001, by nearly half a billion dollars, to $6.7 billion. That’s 7% above the current fiscal year’s already record levels. When you consider the fact that federal spending only accounts for about half of all such expenditures, that means public transit could be buying nearly $13 billion in capital goods and services next year. One of the challenges that the transit segment is facing is showing those record investments quickly “get on the street” in the form of upgraded service. Make no mistake: The public is demanding such service, in part because they are voting for politicians and referenda at all levels of government to achieve these spending levels. It’s also due to the fact that congestion, air quality and other lifestyle issues are appearing higher on voters’ radar screens than ever before. This is where both traditional transit and motorcoach companies can help each other. Motorcoach operators know a thing or two about high-quality, cost-effective service. They emphasize great customer service, safety and sound maintenance, or they don’t stay in business too long, because they are competing not only with many other coach operators but airlines, Amtrak and the private auto as well as their traditional markets. Transit, by the same token, needs to show quality service quickly and it can use motorcoach operators as weapons in its growing arsenal. That can come in the form of service contracts on express runs, just as many transit agencies currently outsource those routes. Or it could come in the form of granting franchises to operate along certain routes or in and out of certain transfer facilities. Although a tried-and-true method of privatization in other nations, it’s not used as much in the U.S., and some institutional and legal obstacles might have to be hurdled in order to take advantage of that strategy in America. Then there are other arrangements, such as brokering tour and charter services (often booking agencies will call transit systems even though it is not a traditional market) and joint marketing for airport-to-downtown service. The point is that there are enormous opportunities for the two communities to work together. This magazine has long argued for better working relationships between transit and the motorcoach segment. I deliberately use “segment” rather than “industry” to describe the two because they both should be considered part of the same industry—public transportation. This philosophy actually underpinned federal policy since the enactment of the Urban Mass Transportation Act nearly four decades ago. Lawmakers chose the term “mass transportation” in that bill to include private operators. It also underpinned another landmark piece of legislation—the one passed in 1991 that has the word “intermodal” in it. It’s time to make that word mean something.

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