Management & Operations

The case for efficiency

Posted on February 15, 2007 by Frank Di Giacomo, Publisher

The outsourcing of transit services, whether we’re talking about operations, maintenance or vehicle overhaul, is a subject that tends to lead to heated arguments.

Many public agencies believe that it’s more efficient if they maintain control of the operation and the employees, while others subscribe to the notion that the private side can squeeze more efficiency from their operations because they have to worry about the bottom line. Even more to the point, publicly owned private operators have to answer to their shareholders, which forces them to find efficiencies and cost savings in places that many public agencies would not think to look.

Efficiency at all cost
I recently visited a private bus operation and discovered that they trained their entry-level bus fuelers — the only people in the facility who see every bus each day — to perform supplemental inspections of the vehicles. They check the oil and fluid levels, tire pressure and lights. They empty the farebox and mop the floor of the bus. Nothing is wasted.

These inspections are not designed just to keep the fueler busy; they’re put into play to save money. The fueler can reduce the amount of routine work done by the regular technicians, freeing them up to focus on more skill-intensive duties.

I should add that the garage was immaculate and designed to maximize safety. The technicians all wore shirts with retroreflective stripes to enhance their visibility. A pre-shift meeting was held to discuss companywide safety concerns.

Properly embraced, adherence to safety principles can save money. But so can heightened productivity. The technicians in this garage, I was told, could do the work of twice as many technicians employed by a public agency. See what I mean about the arguments?

The 150 or so buses in the parking lot were in great shape, even though many of them were 8 years old or more. They are cleaned daily by a janitorial crew, and all graffiti is eradicated by the time the buses leave the yard. It’s an impressive setup.

Other private advantages
Yes, I know that public operators also show pride in their work and know how to make sure that they stay under budget. They, too, can squeeze savings from unexpected places. But they might not enjoy some of the financial advantages that some private companies have.

For example, some of the larger contractors have national accounts with vendors for supplies such as motor oil, tires and uniforms. Through these agreements, they can cut their parts costs significantly. They can also buy big-ticket items, such as buses, in large blocks, helping to minimize a key capital cost.

In this age of tight budgets and public demands for higher levels of service, the use of private contractors should be examined by transit systems as a way to reduce costs, improve efficiency and add the element of competition into the process.

If they agree that outsourcing meets their needs, transit systems need to set high standards for their contractors and hold their feet to the flames when those standards are not met. Contractors, meanwhile, need to focus on the mission of the transit system, providing great customer service with safety and efficiency, and to meet the financial objectives of their owners. If they can’t do both of those things, they will not survive and the next fittest contractor will take their place.

It’s a jungle out there, even in the transit world.

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