Why Private Transit is Destined to Fail

Publicly funded systems would be better suited to the economic and social pressures facing Canada's cities.

For people who despair of the costs of public transit systems but recognize their necessity in big cities, one of the panaceas is privatizing them. They believe that market-oriented business people will make better decisions, run the systems more efficiently, and relieve public budgets of big ticket items.

They’re dreaming.

The critical factor in transit provision is density. High-density areas can support high volume transit like subways. As the density is reduced, the supportable form of transit changes from subways to streetcars to buses to minibuses to jitneys. Putting the wrong vehicle in an area is an invitation to requiring operating subsidies, or to inadequate service that will lead to declining ridership.

The trouble with transit in Canada’s big cities is that the urban form is established, except on the fringes, and it changes very slowly – less than 1 per cent per year. On the fringes, it is growing in the low-density way known as sprawl.

The other serious problem is that since transportation planning and land-use planning were separated 40 years ago, density and transportation modes have been considered discretely. In Toronto, this led to much of the subway lines being developed in low-density neighbourhoods, where the residents welcomed the amenity of the subway but rejected the intensification of development necessary to make it sustainable.

Transportation expert Richard Gilbert says that having 40,000 people living or working within 600 metres of a subway station will allow it to pay for both its capital and operating costs over a 35-year period with the money it makes in fares. The oldest part of the Toronto system meets that standard, but most of it doesn’t. To intensify the rest sufficiently would be a heroic and aggressive exercise of city building which is beyond Toronto’s fiscal capacity.

So the transit infrastructure is in place, but cannot pay its way from the fare box.

A publicly operated system, which recognizes that transit is both an economic and social necessity, would be prepared to find the money to subsidize the fare box shortfall.

A privately operated system, which has less command of public budgets, would likely take the usual corporate cost-cutting measures, axing employees, routes, vehicles, and service. This would lead to such a decline in service that people would climb back in their cars and turn the air blue with smog as they sat angrily in gridlock.

It would be destined to fail.