Opinion Column (Op-ed)
Los Angeles Times
18 August 1997

L.A.'s Bus Riders Pay Too Much for Too Little

By Wendell Cox

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 years.

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 operations.

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.

Wendell Cox is an International Transportation Consultant Based in Belleville, Ill. He was a Member of the Los Angeles County Transportation Commission from 1977 to 1985

Copyright Los Angeles Times
Reproduced by permission of the Los Angeles Times

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