Expert: What Metro really needs is some competition 

As the National Transportation Safety Board begins hearings into Metro’s dismal safety record and four U.S. senators demand the transit agency make immediate safety improvements or face a possible federal takeover, Metro is doing what it always does in a crisis: raise fares.

But one transportation expert says that the latest fare increase is not necessary.

“ WMATA's problem is costs, not revenues,” says international public policy consultant Wendell Cox. “Unless competition is injected into the system, Washington (the locals, the feds and the customers) will never be able provide enough money, because the very money itself drives the demand for higher costs.”

Cities such as London and Stockholm provide “marvelous examples” of competitive tendering, in which transit agencies retain full control of schedules, routes and fare structures, but let private entities actually run the buses and subway systems, Cox pointed out.

His website (http://www.publicpurpose.com/pp-ctut.htm) has a list of cities where injecting competition into urban mass transit has resulted in significant system-wide cost reductions, ranging from 19 percent in Copenhagen to 42 percent in London.

But don’t expect Metro to start the ball rolling. “The impetus for competitive tendering virtually always comes from outside the urban transport authority. In virtually no case has an urban transport operator undertaken conversion to competitive tendering on its own,” Cox writes.

Competitive tendering is lagging in the U.S. because an arcane federal law requires transit systems to pay up to six years of severance pay to laid-off employees,  he says. But many cash-strapped transit agencies that are billions in debt are belatedly considering the idea because of the enormous savings.

“San Diego is the only US urban area with a systematic commitment to competitive tendering, and policy is separated from operations. The impetus for competitive tendering first came from local governments that were subsidizing the urban transport operator…Competitive tendering started in 1980 and now accounts for 35 percent of service. The conversion has been accomplished within the driver attrition rate to avoid the costly federal labor mandates. Yet, savings have been substantial,” Cox writes.

“Competitively tendered bus services are 44 percent less costly than non-competitive services. In response to the competition, the public operator has reduced its costs per mile by 23 percent (inflation adjusted) in contrast to the significant cost escalation that has occurred among US urban transport agencies.”??System wide bus costs per kilometer declined 33.2 percent between 1979 and 1995 with annual savings of $34 million and total savings of $275 million (inflation adjusted). The reduction in unit costs has made it possible to increase bus service levels by 55 percent, while overall bus expenditures have increased only 4 percent (inflation adjusted).”

If they can do it in San Diego and London, why can’t Metro do the same in Washington?

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