2/15/98
SOLVING TRANSIT PROBLEMS WITH A FREE-MARKET MODEL 
By Linda Seebach 
 
 
     The sparring over how Denver's Regional Transportation District should be run has obscured a more fundamental issue: should such a dinosaur exist at all. 
     A book published last year by the Brookings Institution says no. The authors of Curb Rights: A Foundation for Free Enterprise in Urban Transit are Daniel Klein, an associate professor of economics at Santa Clara University, Adrian Moore of the Reason Foundation and Binyam Reja of the University of California at Irvine. 
     They look at the persistent failure of public transit systems to attract more than a tiny fraction of potential riders, despite the expenditure of vast sums in capital costs and operating subsidies, and find the roots of failure in the perverse incentives that determine how public agencies operate. 
     ``It makes no more sense for government to produce transit than it does for government to produce cornflakes,'' they write. 
     Some of their recommendations: Deregulate transit; dissolve public agencies and sell off all capital assets; end federal involvement. If access to transportation is an equity issue, subsidize passengers rather than providers. 
     In place of the current system of inefficient, inconvenient and inflexible central transit planning, create a free transportation market grounded in property rights to locations where passengers board _ ``curb rights.'' 
     That means, for instance jitneys _ vehicles that travel a more or less regular route, but not on a fixed schedule. Curb rights allow jitneys their own places to operate, but also protect scheduled bus services from interloping, the practice of scooping up passengers from the bus stop a minute or two before the bus arrives. Unrestricted interloping can destroy a scheduled bus service by depriving it of the investment it makes in building passenger volume. 
     Several different kinds of curb rights are possible, tailored to local factors such as the amount of traffic and the time of day. That kind of detailed local knowledge is exactly what's missing when bus and train schedules are set for a whole city or region. And in the absence of any kind of market, no one has any reason to acquire the knowledge. 
     ``In a government agency,'' the authors write, ``service quality is generally neither rewarded nor punished by the legislators and others who make funding decisions. Bad service may even be met by increases in funding.'' 
     A market-driven system will probably not turn to any kind of fixed rail for salvation. Not because it's a ``19th-century technology'' as opponents scoff. The private automobile is a 19th-century technology too, just barely, and it's doing just fine. 
     The problem is that the capital costs of fixed rail are staggering, and Denver does not have, and never will have, enough people traveling along any given route to justify the costs. 
     I grew up on Long Island, and for a time commuted into Manhattan by bus and subway. Manhattan has three major subway lines, one every couple of blocks. They serve a population of 4.95 million people in the three central boroughs of Manhattan, the Bronx and Brooklyn _ 10 times as many people as Denver in 15 percent less area. Manhattan alone has 54,247 people per square mile (think 8.3 million people in the city of Denver). 
     The six-county Denver metro area, in contrast, has 489 people per square mile. It can only be served by a highly decentralized form of transit _ as indeed it is, if you chose to regard a private car as a jitney with one paying customer. 
     In the authors' economic philosophy, a market encourages the discovery of information by making it valuable, a view associated with Austrian economist Friedrich Hayek. But they don't speculate on what might happen if individuals could readily share information about where they wanted to drive and when. 
     Such mini-markets can arise spontaneously. In California's East Bay, there are informal rush-hour meeting places where people who want a ride into San Francisco can connect with drivers who want a passenger so they can zip through the car-pool lanes on the Oakland-Bay Bridge. 
     People would do a lot more of that, if it were easy and reliable. But the first step is to stop thinking that transit is something government does.