31 replies to this topic

[davek]

A recent paper by the Conference Board of Canada finds productivity growth in most transportation modes was much higher than the entire business sector over the 1981–2006 period. From the highlights;

This performance was largely driven by privatization of Crown corporations, devolution of ports and airports, and price deregulation...
(t)he public transit sector did not enjoy such gains, as productivity decreased over this period.

Read all about it!

[VicDuck]

Since the BC Ferries were privatized, they have become steadily worse.

[davek]

I'll take your word for it. Of course, if they are a government protected monopoly, why should they improve?

[Bernard]

Since the BC Ferries were privatized, they have become steadily worse.

BC Ferries has not been privatized, it remains a crown corporation, all that has changed is the form of crown corp that it is, it is now inline with what it should have been years ago, the same sort of structure BC Hydro has.

[Phil McAvity]

Since the BC Ferries were privatized, they have become steadily worse.

I don't know what you're talking about, i've seen BC Ferries make huge improvements, from pre-bookings to the terminals, to it's website, to signs, it's like a completely different company from a decade ago. It's way better than it was. In fact, I can't think of another company that has a monopoly behave like there's competition.

[G-Man]

Steadily worse means steadily more expensive as compared to experience of the traveller I think...

I would have noting against a privatized collectivo system that competed with public transit. Though I have my doubts that they would be able to compete.

[Phil McAvity]

^Of course a private company can't compete with a government-subsidized monopoly since a significant portion of the money that transit needs to operate comes from government. I remember reading on a bus years ago that only 44% of all the money that transit takes in from fares pays for it's expenses which obviously means that if we were to pay what we should to ride the bus, it would be a lot more, although I don't know how much they make from advertising. Take out the tax money thrown at transit (ie:level the playing field), and then let's see who can provide better service-the private sector or a government-subsidized monopoly and like with everything else, i'm sure the private sector (vis-a-vis competition) would handily win.

[sebberry]

Steadily worse means steadily more expensive as compared to experience of the traveller I think...

I believe that I provided a similar reply in another thread that with the rising cost of maintenance, fuel, new ships, etc... the experience that the traveller will have can only get so good for the price of the service.

I'm not sure how much better the overall experience on a BC ferry can get. That's not to say that I can't expect the fares to increase as the corp's expenses increase too.

Then again, we could all still be riding boats from the 1960's and 70's and apy a few bucks less. To me it's worth the few dollars to ride a new boat with the quality of amenities that they presently have.

[davek]

Though I have my doubts that they would be able to compete.

As do I. Putting a private system up against a public system would be like putting a kid's lemonade stand up against McDonald's, if McDonald's had guns...

[G-Man]

Well I believe that we should have a publicly funded system but I have no problem with a private company trying and failing to compete, currently this is not allowed and that is actually unfair, people should be allowed to fail at whatever they want.

[Caramia]

^Of course a private company can't compete with a government-subsidized monopoly since a significant portion of the money that transit needs to operate comes from government. I remember reading on a bus years ago that only 44% of all the money that transit takes in from fares pays for it's expenses which obviously means that if we were to pay what we should to ride the bus, it would be a lot more, although I don't know how much they make from advertising. Take out the tax money thrown at transit (ie:level the playing field), and then let's see who can provide better service-the private sector or a government-subsidized monopoly and like with everything else, i'm sure the private sector (vis-a-vis competition) would handily win.

You are missing the huge subsidies given to cars by government Phil. We actually crunched the numbers for various sorts of transportations in an urban geography class years ago, using a method called "True Cost Accounting" which includes all those externalities such as government subsidies, pollution management, policing, accident costs, and a hundred other hidden taxes that allow the "private" automobile to dominate. The true cost is staggering. Taxpayers who do not own a vehicle or drive are providing healthy subsidies to car owners.

Don't believe me? There is a body of literature I can refer you to, unfortunately most of it is locked away in peer reviewed economics journals. A good starting point is Google Books - I found a couple of references for you.

[Nparker]

Taxpayers who do not own a vehicle or drive are providing healthy subsidies to car owners.

Where do I apply for my refund?

[jklymak]

Take out the tax money thrown at transit (ie:level the playing field), and then let's see who can provide better service-the private sector or a government-subsidized monopoly and like with everything else, i'm sure the private sector (vis-a-vis competition) would handily win.

I'm sure BC Transit could compete fine if they slashed all the unprofitable runs or ran far fewer busses in off peak hours. The subsidy pays to make the service complete, not to quell private competition.

[sebberry]

Where do I apply for my refund?

We re-pay you with the increased availability of seats on the bus

[Phil McAvity]

Well I believe that we should have a publicly funded system but I have no problem with a private company trying and failing to compete, currently this is not allowed and that is actually unfair, people should be allowed to fail at whatever they want.

G-Man are you high? The private sector has proven ad infinitum that they produce better quality goods and services at lower prices (and with little or no burden on the taxpayer) than the government does, in pretty much every industry, so why would transit be any different?

Caramia, only you could come up with a link to, "True cost environmental accounting for a post-autistic economy"! What the hell does that even mean?!?!? I couldn't get your other link to work.

jklymak, the bottom line is that transit is not profitable unless they are making oodles off advertising but as long as the company can fall back on the taxpayer, there is little incentive to improve. The thing I find amazing is how much BC Ferries has improved over the past decade when they too have a monopoly.

[davek]

... I have no problem with a private company trying and failing to compete...

But the government has a problem with a private company trying and succeeding to compete, because that eliminates the ability of politicians to manipulate the system for political advantage. So instead it uses regulation and subsidy to protect itself against private competitors.

I'm sure BC Transit could compete fine if they slashed all the unprofitable runs or ran far fewer busses in off peak hours. The subsidy pays to make the service complete, not to quell private competition.

The subsidy can only be used to make the service "complete" because regulation has been used to quell private competition. In the absence of regulatory prohibition, I believe public transit would have to use subsidy in order to hold on to any routes.

But there is no need to rely on theorizing. Consider Santiago, Chile, where a profitable private system serving all segments of the market was 'publicized'. Hilarity ensues! Jobs are lost, commuting times soar, El Presidente apologizes to everyone (especially the poor), and the first year nets a loss of around $600 million! But apparently the ten private companies still permitted to operate under the new government monopoly find the absence of competition much to their liking...

[spanky123]

G-Man are you high? The private sector has proven ad infinitum that they produce better quality goods and services, at lower prices (and with little or no burden on the taxpayer) than the government does, in pretty much every industry, so why would transit be any different?

Caramia, only you could come up with a link to, "True cost environmental accounting for a post-autistic economy"! What the hell does that even mean?!?!? I couldn't get your other link to work.

jklymak, the bottom line is transit is not profitable unless they are making oodles off advertising but as long as the company can fall back on the taxpayer, there is little incentive to improve.

The private sector does well when there is competition to level the playing field. The private sector does very poorly when given a monopoly to run (ie BC Ferries or Hospital cleaning).

[jklymak]

But there is no need to rely on theorizing. Consider Santiago, Chile, where a profitable private system serving all segments of the market was 'publicized'. Hilarity ensues! Jobs are lost, commuting times soar, El Presidente apologizes to everyone (especially the poor), and the first year nets a loss of around $600 million! But apparently the ten private companies still permitted to operate under the new government monopoly find the absence of competition much to their liking...

Interesting example. Not sure if a city with a population density more than 20 times that of Greater Victoria is the best comparison though. If we didn't subsidize the busses here there would be a lot fewer of them.

[Phil McAvity]

Spanky, I'm not sure how you managed to completely misunderstand my point, but somehow you did, and my point was (for the third time now), that BC Ferries has dramatically improved in spite of being a monopoly which I don't understand since there aren't exactly a wide array of options for people that want to drive to and from the mainland so where the impetus for innovation came from I can't quite figure out.

[jklymak]

jklymak, the bottom line is that transit is not profitable unless they are making oodles off advertising but as long as the company can fall back on the taxpayer, there is little incentive to improve.

You are right, transit is not profitable, any more than maintaining roads is profitable - they provide a service. On the other hand, governments certainly have incentives to improve. They aren't as do-or-die as a goods-producing industry, but people want to be promoted, politicians want to be re-elected. Some of them may actually want to introduce improvements because they take satisfaction in doing a good job and accomplishing something. I don't argue for a minute that private industry is great at innovation and providing services, but I don't buy the polar viewpoint that governments are useless.

BC Transit is actually pretty darn good in my opinion. Could they do better? Sure, but they cover a lot of ground and have regular schedules, the busses are clean, most of the drivers are courteous. The only people who seem to complain bitterly about them are car drivers.