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Privatizing MARTA

May 27, 2010

Meet Kyle Wingfield.

He needs to take my class in research.  
Kyle writes for the AJC.  He’s recently been writing a series on MARTA.  Of course, we took notice.  And of course, we must dissect his every argument.  Starting with this article. 
A lesson on frugality for MARTA from out west
In this special nonsense, Kyle argues for the privatization of MARTA and how it can save MILLIONS of dollars if it were to privatize its bus service.
So why does this make good ole boy Kyle foolish?
You can’t privatize MARTA.  Period.  It’s a public entity that uses federal funds and therefore can’t be privatized.  It’s against federal law.
Had someone done his homework, he’d learn the word he’s looking for in the case is outsourcing.  MARTA can OUTSOURCE the operation of its bus service, but it can’t be made a PRIVATE entity.
Now that we have that notion out of the way, let’s take a look at his other points.
Kyle informs us that 11 of the 50 largest bus systems use this “outsourcing” model (that’s in quotations because he uses the word privatize, and he’s an idiot).  These are cities like Phoenix, Las Vegas, Honolulu, and San Diego!  Wow!  That’s like SO important and SO like, a good argument for MARTA to jump on board too!
Except, Phoenix moves 133,000 a day, Las Vegas 167,000, Honolulu comes in at 1,700 and San Diego at 86,000.  MARTA buses move 225,000 passengers a day.  You want to compare a system that moves almost a quarter of a million people a day to one that doesn’t even move two thousand.  That hardly seems like a bright idea.
How about you compare MARTA to our peers, Kyle?  We’re up there with cities like Boston, San Francisco and Baltimore.  I’m pretty sure those guys aren’t outsourced.
Finally, let’s take a look at the cost savings gained if we outsourced MARTA bus operations.  Kyle estimates that MARTA would save $22 million a year, up to $43 million!  Holy shit!  Man, I wish I could run my finances like Kyle, then I’d be a billionaire or something!
If MARTA were to outsource their the operation of their buses, the company that would inherit the fun would also inherit the employees and labor contract.  The number one expenditure of MARTA is salaries.  Whatever company might win the bid and the contract, they can’t fire those employees or throw out the ATU contract, remember, those feds are some picky sons of a gun and those union members are protected.  So the only cost savings gained would be the salaries of the handful of managers on MARTA’s side.  The last time I checked, they weren’t being paid millions of dollars.
So Kyle, I do not accept your argument for privatization.  Do your homework next time, buddy.
3 Comments leave one →
  1. Kyle Wingfield permalink
    May 27, 2010 9:55 am

    Thanks for sending me the link to your blog. If you read my column, you will have noticed that I was very careful to refer to privatized *services* not systems — i.e., infrastructure. And if you follow MARTA closely then you know the union contract is currently due to be renegotiated. So, it’s actually the right time to be having this debate.

    As for your numbers: I’m not sure where you got them, but they don’t correspond at all to what I found. I used the Federal Transit Administration’s National Transit Database for 2008 (the most recent year available), available here:

    You want the self-extracting RY 2008 database, table 19.

    You’ll see that Honolulu (line 555) ran 439 buses supplying 301,159,500 passenger miles in 2008, while Atlanta (line 551) ran 504 buses supplying 213,459,600 passenger miles.

    Phoenix (line 56): 450 buses, 186,894,700 PM.
    San Diego (combine lines 249 and 250): 413 buses, 173,404,400 PM.
    Las Vegas (line 1056): 251 buses, 218,426,100 PM.

    Some transit officials like to use “unlinked passenger trips” because not every passenger rides a long distance. Those figures are, in order:

    Honolulu: 69,759,900
    Atlanta: 67,519,400
    Las Vegas: 65,196,100
    Phoenix: 52,588,100
    San Diego: 48,964,800

    Again, I’m not sure where you got your data. But the NTD figures, which are the data cited by the American Public Transportation Association (the transit industry’s trade group), show that Atlanta is hardly in a different league from the cities I used as a comparison. It’s very similar to Honolulu and Las Vegas in the amount of service supplied, which is what we should really care about (that is, outputs versus inputs).

    And btw: Baltimore does outsource about 20 percent of its bus service. And I’m not “pretty sure” about it; it’s all in the NTD.

    Thanks for reading my blog.

    • cctgirl permalink*
      May 27, 2010 10:40 pm

      Hi Kyle.

      Thanks for responding. The numbers I gave were the average weekday passengers, unlinked, from the APTA reports. Most transit agencies report those as their figures. Or so I figure. But that places MARTA serving more people overall than those agencies/cities listed and in a different league than those cities you gave as examples, based on the same data you cited. Trust me, I’m already way too familiar with those reports.

      I suppose the figures one uses for an argument, at this point, is simply how you like to mine your data. I prefer passengers over miles because MARTA is restricted to two counties, and while Honolulu is restricted, I’m guessing Las Vegas and Phoenix get to venture out a little further. And MARTA buses link to heavy rail, reducing miles overall because people hop off the bus and onto a train.

      However, privatizing is still the wrong word to use here, as when you’re contracting out a service, it’s outsourcing. The word privatize confuses people and simply isn’t appropriate, so I take offense to the word, more than the practice. Outsourcing *can* be effective, but only if handled correctly. I.E. the city of Atlanta’s parking fiasco.

      And in the case of MARTA, it just isn’t practical. MARTA board member Michael Walls and I discussed this today (sorry to see you weren’t at the meeting, Kyle) and this is what he had to say:

      ” The truth is that it is simply not possible for a responsible private operator to operate MARTA more efficiently and increase service on less money. Eighty-three percent of MARTA’s operating budget goes for two big items: wages and fuel and electricity to run the buses and trains and those costs will remain the same regardless of who operates the system. No one would contend that a private operator could buy fuel or electricity at prices less than the market rate, so there are no savings to be gained there. What is less obvious, but equally true is that, because of Federal law, a private operator would have no discretion to make significant cuts in pay either. In essence, Section 13(c)of the Urban Mass Transit Act requires that, in order to be eligible to receive Federal funds, MARTA must use a system under which an arbitrator appointed by the Governor has the authority to set wages in the event that MARTA and the Union cannot agree on them. That requirement continues to apply continue to a private contractor / operator and so, at the end of the day, labor costs will be basically the same for a contractor operator as they will if MARTA operates MARTA directly. With 83% of MARTA’s operating costs off limits the only place that a private operator can look in order to get funds to add additional service and to turn a profit for itself is to defer maintenance and upkeep of MARTA’s buses and rail cars; in short, to adopt the same sort of shortsighted practices as Massey Coal and BP. We don’t need that.”

      And while our state government continues to be biased against MARTA, they also tend to be just as opposed to organized labor, so I agree with Michael that there just wouldn’t be a change in wages or benefits. It’s really hard to take pay away from a group of organized people, and when you factor in cost of living increases and the fact that they haven’t received pay increases since the middle of the last decade, I don’t foresee and changes in that budget line item. Besides, HB 277 prohibits capital reserves or any new funds going to pay increases and with MARTA’s forecast, they’re not that stupid to raise themselves out of a job.

      As for Baltimore’s usage of outsourcing, it appears that the 20% you’re referring to is commuter rail and paratransit, not bus service.

  2. UrbanCommuter permalink*
    May 31, 2011 3:35 pm

    Wow. Good sir, Kyle, that is what I like to refer to as getting schooled. Also if you really want to know how well a privatized mass transit system works, look at Chicago and Pittsburgh. There was a reason why they went to a public system. And need I remind you, the last time a mass transit system (most streetcars in America) were private they were bought out, dismantled and have now placed us into the traffic nightmare that most of our cities sit in today mainly due to private and political corruption. In fact nearly every streetcar and light rail project proposed in America is to serve as a replacement to one that operated decades ago, but was put out of business thanks to the likes of BP, Firestone, and GM. The ones that survived, and arguably some of the greatest transit systems in the world, and the country, are those that were absorbed into a public agency.
    There is also another side that you failed to explore which has been researched, studied, and reported the world over. Contracting these services out has attributed to lower ridership, a significant increase in accidents, and an overall decline in the service provided, often with an increase in the fare. Most of these are consequences of a private company hiring incompetent operators, or those of low skill. So if you are dissatisfied with MARTA now, wait until another company who is in it strictly for profits gets a hold of the system.

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