5.0 CASE STUDY CONCLUSIONS

The case studies provided in Sections 3.0 and 4.0 are consistent with a growing body of evidence that private provision of public transportation can be less costly than monopolistic provision. With regard to competitive contracting, experiences in Houston, Denver, San Diego and Los Angeles indicate that the biggest advantage of competitive contracting is savings in operating costs. In most cases, savings of 30-40 percent were realized by the private contractor, because of its ability to provide the service more efficiently. A public transit agency's inability to reduce operating costs is primarily due to higher wages and overhead associated with unionized labor. Drivers' wages constitute approximately 70 percent of operating costs of bus services. Cost savings by the private contractor are due in large part from more efficient use of manpower and lower overhead.

The success of competitive contracting depends of three fundamental principles: public control, competition, and open access. First, public control ensures that quality and quantity standards are met. Second, contracting programs must foster the development and maintenance of a truly competitive mar\(et so that costs are kept under control. And third, these two principles can be best served when all interested parties are allowed to participate. Experiences with competitive contracting also indicate that monitoring and enforcement, as well as a clear definition of the service that needs to be performed, usually yields better results.

With regard to private paratransit services, the success of these services is related to two factors: high ridership and cultural preferences. In some cases, paratransit can provide a complementary service to public transit in high demand corridors, while in other cases it can provide service to a particular market segment of riders. In San Diego and Miami, the overwhelming majority of paratransit customers are of Hispanic background. While regulation and stepped-up enforcement have suppressed paratransit services, the steady influx of people with varied cultural background into so!t1e areas of the United States provides an environment within which jitneys could attract ridership.

The success of Atlantic City jitneys stems from high passenger turnover, a compact tourist town, steady stream of traffic, and reliable services at good value. A key factor in their success has also been self regulation and efficient service practice. The Association and its members recognize that the key to long term survival of Atlantic City's jitneys is policies that promote both efficiency and fairness. To ensure fairness among drivers, the system guarantees that each driver will have an equal opportunity to drive the most profitable routes.

On a cost per passenger basis, commercial paratransit services can have an edge in certain high ridership areas. Miami's jitneys cost 70 percent less for every passenger carried than comparable bus services. San Ysidro jitneys per passenger costs were 20 percent lower mainly because these jitneys compete with one of the most productive bus routes in the country.