The history of public transportation is the story of government intervention, directly and indirectly. In fact, public-private tension in public transportation is among the more fascinating episodes of the relationship between government and industry in our country’s history. Below are 10 of the most interesting points in that journey. 1. Electrification. After electricity was invented, governments began to grant easements and charters to electric railways and, later, trolleybuses. Government was both enabler and regulator, granting exclusive franchises and, at worst, stipulating in some cities only where companies string their wires. 2. New York City’s subways. In the 1890s, New York’s Rapid Transit Commission recommended that the city award a franchise for its first subway lines, responding to the public’s demand for something more reliable and quieter than elevated systems. The result, known as the Interborough Rapid Transit, was a new kind of public-private partnership, an American answer to earlier European experiments in suburban and underground rail. 3. Federal Electric Railway Commission. In response to an industry crisis caused by intense competition both within the streetcar industry as well as from motor buses and jitneys, President Woodrow Wilson created a commission to recommend solutions. Its 1920 report urged a more active public role, but the solutions were considered too radical. 4. The interurban railways. During the first three decades of the 20th century, communities would often cut deals with developers and electric railway companies. These policies were often responsible for the early sprawl in such places as Los Angeles and Indianapolis. 5. Motorbus era. The internal combustion engine contributed its own answer to problems associated with horse-drawn vehicles, and their inherent flexibility over electric and rail-based modes lowered the competitive barriers in public transit. Congestion and threats to safety prompted most cities to begin regulating these operators — and prompted the first charges of “unfair favoritism to rail” leveled at governments by bus companies. 6. Federal Aid to Highways Act. In the 1920s, the auto industry received the first of its decades-long string of massive federal subsidies, helping to put interurban rail networks out of business. 7. Utility divestitures. In the 1930s, President Franklin Roosevelt forced electric utilities to divest their tram companies. The utilities’ ability to cross-subsidize their streetcar subsidiaries with cheap or free traction power, coupled with public subsidies of auto travel, effectively wrote the death warrant for privately owned and operated rail transit. 8. Urban Mass Transportation Act. In 1964, Congress acted to help cities bail out failing transit companies, providing the framework for the industry as we know it today. Section 13(c) of the act also created the labor protections that have helped the industry to be one of the nation’s most heavily unionized. Other provisions of the law, which were supposed to help preserve private competition, have been less effective. 9. Americans With Disabilities Act. The 1991 landmark civil rights law extended the guarantees of a bus ride with a wheelchair lift contained in earlier regulations much further. ADA’s estimated billion-dollar price tag has prompted many transit agencies to outsource their mandated paratransit service. The result is that more than 12% of all U.S. transit operating costs are for purchased service, roughly three times the early 1980s’ share. 10. Transportation Equity Act for the 21st Century. Enacted in 1998, TEA 21 was an unprecedented federal commitment to public-private partnerships. Its far-reaching provisions range from federal assistance to motorcoach companies, ostensibly to pay for their costs of ADA compliance, to incentives for greater private investment in public transportation. TEA 21Õs legacy is only beginning to be felt.
10 milestones in public-private partnerships
Each issue in 2004, Cliff Henke, contributing editor and former associate publisher of METRO, will deliver a Top 10 list on a particular area of public transportation.
More Management
Inside The Bus Coalition’s Push for Stronger Federal Transit Investment
In this conversation, TBC’s Executive Director Ed Redfern, President Corey Aldridge, and Washington Representative Joel Rubin outline the coalition’s key policy priorities, the challenges facing transit agencies, and how industry stakeholders can work together to strengthen the voice of bus transit at the federal level.
Read More →
Des Moines DART CEO Joins Minneapolis Metro Transit
Amanda Wanke, who has worked at DART for 10 years, including the past 2½ years as CEO, will join Metro Transit as deputy chief operating officer, operations administration.
Read More →
SEPTA to Launch New Bus Network Redesign in August
The first comprehensive overhaul of SEPTA’s bus network will expand frequent service, add routes, and phase in changes through 2027.
Read More →
CDTA Outlines Mobility Vision at 2026 State of the Authority Event
In his first State of CDTA address as CEO, Frank Annicaro highlighted the organization’s continued focus on delivering reliable service, investing in innovation, and strengthening connections across the region.
Read More →
WMATA Introduces Priority Seating Reminder Pilot for Metro Riders
The agency is testing floor decals on select railcars to improve awareness of priority seating and support a more accessible transit experience.
Read More →
Transit Unplugged Celebrates 400 Episodes
The special episode features an exclusive interview with Mark Miller, president of Constellation Software Inc. and executive chairman of the Volaris Group, who reflects on the podcast's early vision and the importance of creating a platform where transit leaders can share ideas and learn from one another.
Read More →
NFI Group Officially Opens New Flyer All-Canadian Build Facility in Winnipeg
The CAD facility enables NFI to complete full domestic production of heavy-duty transit vehicles, including zero-emission buses, in Winnipeg for the first time in 15 years.
Read More →
APTA: Surface Transportation Funding Delivers 5:1 Economic Return, Supports 41,400 Jobs per $1B
The findings provide clear evidence that sustained Federal investment in public transit and passenger rail delivers significant returns for workers, communities, taxpayers, and the U.S. economy, APTA officials said.
Read More →
Building a National Framework for Transit Safety and Consistency
On a recent episode of METROspectives, METRO Magazine’s Executive Editor Alex Roman sat down with Ana-Maria Tomlinson, Director of Strategic & Cross-Sector Programs at the CSA Group, to explore a bold initiative aimed at addressing those challenges: the development of a National Code for Transit and Passenger Rail Systems in Canada.
Read More →
FTA Invests $100M to Strengthen Transit for 2026 World Cup
The funding will ensure communities can expand transit options to meet increased demand for services around stadiums.
Read More →
