Competition

[sjc]

uneven quality of services for what one can afford/willing to pay is another entirely

I would like to see a variety of services offered at different price points. For example, I can currently pay twice the regular fare for express service on a very few routes. I'd like to see that extended to other areas where there are opportunities to get a larger fare from people.

For example, the TTC could add first class cars to the subway or a car that allowed beer sales. You can take a nice bus to the airport (privately-operated airport express bus), but there are no "comfortable bus" options for travel within the city.

Right now, for getting around town without a car, you basically have two options: TTC and Taxi. There is a very large price differential between the TTC and taxis except for very short distances. I would like to see more comfortable and/or quicker options priced higher than the TTC but still substantially cheaper than taking a cab.

 

[kettal]

Some relevant articles from today's Star:

Private transit less rare than you’d think
Contracting-out works in some cities, but London’s troubles show it can also be risky

How the Swedes are making it work
Stockholm saves $240 million a year by hiring eight private companies to run its transit system

Outsourcing: Where councillors stand
We asked members of Toronto council: Presuming you’re re-elected, will you be in favour of no additional outsourcing of city services, limited additional outsourcing, or large-scale outsourcing?

 

[SlickFranky]

I really think there's a ton of smoke and mirrors going on with this issue. This isn't really about privatization. That word doesn't factor in. This is about outsourcing labour costs to private businesses to circumvent the existing union. Any lame econ 101 talk about market competition or private sector efficiency is empty rhetoric.

This really is what it all comes down to. What are all these other operational savings that a private corp. could make on a bus route? What magic are these operators conjuring?

If you can answer that...why couldn't the TTC run their routes using those strategies, rather than paying someone else (plus profit) to do so? Maybe we should forgo the privatization and just hire the people that make those amazing private lines run so efficiently.

 

[kettal]

Re: GraphicMatt & SlickFranky

1. With an outsourced operation, the TTC can say to the private company "you will lose X dollars from your payout for every bus that goes off schedule (barring factors out of your control)". Then we know the private operator will do everything in it's power to run service on schedule and up to standards. Right now, there is little incentive for making the buses on time.

2. If the private operator does not do a satisfactory job in terms of customer service and whatever else, it will be held against them the next time the contract opens for bidding. This provides incentive to excel in these areas.

If there is some way that these can be achieved without outsourcing, I'd love to hear your idea.

3. These firms are large multi-national companies with lots of experience. Saying that the goons in the TTC could just do as good a job is like saying "why are we buying our car fleet from a car manufacturer? we have metal and rubber tires here, why can't we just build our own cars?"

 

[afransen]

If you don't believe that governments miss a lot of simple cost savings that competitive firms do, you probably haven't seen each kind of organization in operation.

 

[LAz]

1) What do YOU think of the Maltese proposition?

I see apple. I see orange. No can compare apple and orange. Ministate and huge metropolis, in our case.

2) Is this possible at all for Toronto? Or are the established political forces too strong?

Political forces are not relevant here. In almost all western cities reasonable competition in mass transit does not exist. The transit industry tends to be at a loss - big or small... and as a result there is no way in hell that any private company would invest in this. The investment up front alone would cost way too much.

Dude, can you even in your wildest dreams imagine a private company digging a subway line? They'll go bankrupt so fast. That is what was happening so often with private mass transit in north america... it went bankrupt so many times.

The only way to have a private company doing things is if there is continual support and investment from the government. I am against this.



Lets not forget where this all begins. It's all from the backbone on which neoliberal economic policy is based on... that public ownership is bad. Idiots like friedman have been saying that "GREED IS GOOD"... well, these policies have brought the US into a state of collapse... and are taking Canada down that same doomed path. Competition simply does not work in mass transit. In Chicago we had streetcars and elevated Metro lines going on the exact same route!! Like no wonder the idiots went into bankruptcy. The best transit systems are those where the government pumps in shitloads of money. Lets see now... applied to Toronto that would be... oh yeah, kinda like that song... "dream on". While Moscow's Metro system is extending itself each year by some KMs, we are falling behind the world and are a second tier city in terms of transportation - which nonetheless is better than most of the stuff that we see down in the US...
edit: This idea of GREED IS GOOD simply does not work for mass transit, because mass transit is a public good... now hey, I see GREED IS GOOD being applied to universities and colleges... sure enough the are cutting their classes/programs slowly/steadily. Reduction in quality...

 

[drum118]

I see apple. I see orange. No can compare apple and orange. Ministate and huge metropolis, in our case.

Political forces are not relevant here. In almost all western cities reasonable competition in mass transit does not exist. The transit industry tends to be at a loss - big or small... and as a result there is no way in hell that any private company would invest in this. The investment up front alone would cost way too much.

Dude, can you even in your wildest dreams imagine a private company digging a subway line? They'll go bankrupt so fast. That is what was happening so often with private mass transit in north america... it went bankrupt so many times.

The only way to have a private company doing things is if there is continual support and investment from the government. I am against this.



Lets not forget where this all begins. It's all from the backbone on which neoliberal economic policy is based on... that public ownership is bad. Idiots like friedman have been saying that "GREED IS GOOD"... well, these policies have brought the US into a state of collapse... and are taking Canada down that same doomed path. Competition simply does not work in mass transit. In Chicago we had streetcars and elevated Metro lines going on the exact same route!! Like no wonder the idiots went into bankruptcy. The best transit systems are those where the government pumps in shitloads of money. Lets see now... applied to Toronto that would be... oh yeah, kinda like that song... "dream on". While Moscow's Metro system is extending itself each year by some KMs, we are falling behind the world and are a second tier city in terms of transportation - which nonetheless is better than most of the stuff that we see down in the US...
edit: This idea of GREED IS GOOD simply does not work for mass transit, because mass transit is a public good... now hey, I see GREED IS GOOD being applied to universities and colleges... sure enough the are cutting their classes/programs slowly/steadily. Reduction in quality...

Look back to 1908-11 and you will find a P3 willing to build the Yonge subway as well the DRL then.

Other than a few systems world wide, transit loose money. Dream the impossible dream to have, to have transit make a profit is unreal.

Look south to see systems cutting up to 50% of existing service now as well jacking up fares by 50-100% they are in diet.

 

[Asterix]

That's one of the problems in this kind of debate in that we look at the 'profitability' of the transit system through a rather limiting lense.

While it would be next to impossible to identify and quantify the benefits of transit, there is a definite financial benefit to a city to being able to deliver thousands of people to employment areas in a reasonably efficient manner and without having to provide non-productive space to park or stack single passenger vehicles.

And that's not even looking at more macro items like reduced health costs over the long haul due to less combustion pollution or the economic development of a commercial streetscape (eg Danforth) whose businesses can be patronized by a pedestrian crowd travelling on convenient reasonably high speed transit. (An alternative would be a big box mall surrounded by acres of parking where for many, the walk to the mall door would be farther than the distance between downtown subway stations).

 

[LAz]

You might have been able to find someone. Though I think it would have been more reasonable to find someone to make an elevated metro. Nonetheless, these mofos would have gone into bankruptcy sooner or later. Plus, who would have done that? Canada did not have the moguls that the US had. Lets also keep in mind how the mofos built the metros back in those days - in the cheapest possible way. Chicago's Brown Line is still plagued with twists and turns that slow it down because rich asshole decided to take the router that was cheaper... no imminent domain back then.
If in any case they somehow got this all done... they would have failed again. The interwar period was quite harsh on mass transit. But yeah, before ww1 cars were scarce and many more people took mass transit. Granted that Toronto's suburbanization came later... but nonetheless it did come. So we are faced with a more broader question - do we support VROOM VROOM personalized transportation or mass transit... the question's a no brainer, especially if we think about sustainability. But... big money does not agree. And big money is not going into mass transit because there is no big profit.





But but but, some are not aware that it is impossible to have for-profit mass transit. That is the whole goal behind privatization. The private sector supposedly always knows best on how to extract more moolah. These idiots who want to privatize everything should be gagged. We have ruined ourselves by opting for this capitalist model of no state intervention. Our city has lost so much population and investment thanks to suburbs around it. It's a complete lack of foresight...

...and because of that all the discussion is in vain. Competition in mass transit is simply the last nail to close us up - the last joke that we need to make fun of this system.





edit:

And that's not even looking at more macro items like reduced health costs over the long haul due to less combustion pollution or the economic development of a commercial streetscape (eg Danforth) whose businesses can be patronized by a pedestrian crowd travelling on convenient reasonably high speed transit. (An alternative would be a big box mall surrounded by acres of parking where for many, the walk to the mall door would be farther than the distance between downtown subway stations).

The private sector is disgusted by this. You are suggesting that Cars are bad. You are talking in language that the private sector does not understand. A public good does not fit in with the model that GREED IS GOOD. We're dealing with .... some sort of fanatics who treat the unimpeded free market as a religion, and they then are fundamentalists. They worship crude principles of st. Andrew's cross - sideways cross, also known as straight lines of supply and demand.

 

[SlickFranky]

1. With an outsourced operation, the TTC can say to the private company "you will lose X dollars from your payout for every bus that goes off schedule (barring factors out of your control)". Then we know the private operator will do everything in it's power to run service on schedule and up to standards. Right now, there is little incentive for making the buses on time.

2. If the private operator does not do a satisfactory job in terms of customer service and whatever else, it will be held against them the next time the contract opens for bidding. This provides incentive to excel in these areas.

If there is some way that these can be achieved without outsourcing, I'd love to hear your idea.

3. These firms are large multi-national companies with lots of experience. Saying that the goons in the TTC could just do as good a job is like saying "why are we buying our car fleet from a car manufacturer? we have metal and rubber tires here, why can't we just build our own cars?"

None of this answers any of my concerns.

TTC can dictate the performance of the operator...they can do that now, internally. If managers need better performance incentives, provide those incentives. And the fact that those corps. are big?...I thought big was bad? That's the first complaint I hear about public operation in any field. Privates are supposed to be leaner, smaller, more agile.

Just saying that a private operator could be more efficient is rhetoric. More efficient how? What would they do differently? Ok, so TTC should do that. What can a private do that TTC cannot? All I see is a neat way around the ATU.

 

[GraphicMatt]

1. With an outsourced operation, the TTC can say to the private company "you will lose X dollars from your payout for every bus that goes off schedule (barring factors out of your control)". Then we know the private operator will do everything in it's power to run service on schedule and up to standards. Right now, there is little incentive for making the buses on time.

2. If the private operator does not do a satisfactory job in terms of customer service and whatever else, it will be held against them the next time the contract opens for bidding. This provides incentive to excel in these areas.

If there is some way that these can be achieved without outsourcing, I'd love to hear your idea.

These are good points, but they also rely on there being a number of bidders vying for these routes. What if a route gets no bids? How many companies are realistically capable of running a transit line currently. I can think of maybe two or three. I bet they'd have to be Canadian companies, too.

That said, there's no reason we couldn't have the same outcomes under the current operational model. The incentive for keeping the buses on schedule should be, for employees, raises, commendations and, yeah, not getting fired.

The problem with the TTC isn't a lack of private sector involvement. It's rising labour costs and a union that is incredibly difficult to work with.

3. These firms are large multi-national companies with lots of experience. Saying that the goons in the TTC could just do as good a job is like saying "why are we buying our car fleet from a car manufacturer? we have metal and rubber tires here, why can't we just build our own cars?"

I agree that the current situation is not good and needs to be addressed and that outsourcing labour is probably a good solution. I just want people to exercise caution when thinking that the private sector will give you good, efficient transit for cheap ("like magic!"). This conversation should not distract from the real issue which is that we need more transit funding from all levels of government.

 

[waterloowarrior]

These are good points, but they also rely on there being a number of bidders vying for these routes. What if a route gets no bids? How many companies are realistically capable of running a transit line currently. I can think of maybe two or three. I bet they'd have to be Canadian companies, too.

For buses likely Veolia, Stagecoach, FirstGroup, Tokmakjian, Miller (also potentially Pacific Western, GO Transit)
For rail Bombardier, SNC Lavalin, and Veolia (also potentially CN/CP?)

But I'm sure many multi-nationals would also be attracted like MTR, Keolis, Arriva etc for a City of Toronto's size.

This is just talking about operating, but some of those companies are also involved in maintenance, design, etc....

 

[kettal]

Yeah, York Region Transit alone has 6 different private operators working for them. If a TTC contract gets any less than 2 bidders, then the contract is flawed.

 

[waterloowarrior]

LAz... sure pure privatization doesn't make in most places in the developed world given the lack of density and availability of cars (which also aren't usually purely for-profit and generally require subsidies/involvement from government for at least the capital cost, just like transit, at least for large-scale projects and anything rural).

But there's a whole spectrum of options between 'government monopoly on running buses' and pure unregulated competition/jitneys everywhere. You can also separate transit into different components like planning/designing, building, operating, owning, maintaining, financing etc... and see which roles are better for private versus public sector (both can also be involved in each component). Or separate based on operations vs capital projects.

And it's not like the government is immune to being cheap either (some might say choosing LRT for Sheppard is short-sighted for example, not to get into that argument again )

 

[kettal]

None of this answers any of my concerns.

TTC can dictate the performance of the operator...they can do that now, internally. If managers need better performance incentives, provide those incentives. And the fact that those corps. are big?...I thought big was bad? That's the first complaint I hear about public operation in any field. Privates are supposed to be leaner, smaller, more agile.

Just saying that a private operator could be more efficient is rhetoric. More efficient how? What would they do differently? Ok, so TTC should do that. What can a private do that TTC cannot? All I see is a neat way around the ATU.

Theoretically, you're right, a monopoly could be super-efficient and deliver a great product... theoretically. But the likeliness of that happening is much lower than a scenario which involves competition as an incentive to find efficiencies and provide the best service.

If it becomes a single-bidder private crony operation, it won't be any better, but if it is a competition between multiple private bidders, that's where the incentives for improvement come from.