Since the half-cent Proposition A sales tax became effective in
1982, bus costs have escalated unnecessarily in Los Angeles. By
comparison, San Diego's bus costs have been dropping in real terms. If
Los Angeles had done as well, the Metropolitan Transportation Authority
would have saved $170 million this year and $2 billion over the past 15
During the first three years of Proposition A, fares were reduced to
50 cents and annual bus ridership shot up 40%, from 354 million to 497
million. But it has been downhill ever since. The basic fare is up to
$1.35. MTA ridership is down to approximately 360 million for all bus
services and the three new rail lines combined. Through Proposition A and
the subsequently enacted half-cent Proposition C sales tax, local
taxpayers contributed more than half a billion dollars annually to MTA
bus and rail operating and capital costs. And what has been the net
benefit? A barely 2% increase in ridership, about the same number of
riders as are carried on Montebello's small but well regarded bus system.
More to the point, ridership has dropped more than one-quarter since
1985, driven away by unnecessary fare increases. If MTA costs had been
kept in check, the savings would have been more than sufficient to
maintain the 50-cent fare on both bus and rail services. Based on
industry formulas, MTA could have provided 30% more bus service and the
same rail service to nearly 600 million passengers if it had done as well
as San Diego.
The MTA, unlike San Diego, is unable to make the tough political
decisions necessary to put the interests of the public first. San Diego's
success comes from two related factors: separating policy from operations
and competitive bidding and contracting.
San Diego's transit system is administered by the Metropolitan Transit
Development Board, which deals only in policy. It does not operate buses
and trains, it just ensures that they are operating. Not facing
day-to-day operational decisions, San Diego transit board members and
staff have been able to achieve substantial success. Not only have costs
dropped, but ridership has nearly doubled since 1982. A form of policy
separation was tried in Los Angeles from 1977 to 1992, but the policy
organization, the Los Angeles County Transportation Commission, had
insufficient authority to impose the needed reforms.
The most important factor in San Diego's success is competitive
contracting. Nearly 40% of San Diego's bus service is put out to
competitive bid, with public and private operators competing to provide
cost-efficient, quality service. Not only have costs dropped on these
services, but "ripple effect" savings have occurred on other services, as
management and labor, facing competition, have been forced to work
together to bring costs in line.
San Diego is not unique. The same formula is being used around the
world to produce more cost-effective and high quality transit services.
Transit systems in London, Stockholm, Copenhagen, Helsinki, Melbourne,
Auckland, Adelaide, Perth and Las Vegas are being or have been fully
converted to competitive contracting, with policy separated from
The Bus Riders Union in Los Angeles has it right. Bus riders are
paying too much and getting too little. The answer is not a new formula
for selecting MTA board members. Neither is the problem the general
manager or the MTA staff. It is much more fundamental. The problem is a
bankrupt administrative system infused with incentives that block reform
and ensure the future of the status quo. And the status quo does not mean
that things stay the same--it means they get worse.