Transportation
Saving Detroit's Public Transit By Privatizing It
The privately run Detroit Bus Company will try to pick up where the city's public transportation left off.
When a city's transit agency gets into funding trouble, it's easy to call on the private sector to whip things into cost-efficient shape. Of course, actually running a private urban transit company — rather, running a successful one — is a lot tougher than it may seem.
While the private sector can cut transit costs on the order of 5 to 19 percent, the result is usually "less service and higher fares than socially optimal," transit scholar Todd Litman wrote early last year [PDF]. A recent case in point: a few weeks ago, just months after taking over the Long Island Bus from New York City's transit authority, the private company Veolia announced $7.2 million in service cuts.