[bloor_christie]

Privatization works because of competition - Air Canada (ex-crown), Greyhound, CN (ex-crown) - they are private transport companies that work. They are profit oriented and therefore people oriented. If they didn't cater to people, then their customers would switch carriers and revenues drop - bad for business.

Friends of mine in Liberty village would happily pay a premium (4 or 5 bucks) for reliable express trains with limited stops from liberty village to Union, instead of the snail paced Queen streetcar. Same for friends in the distillery district, and family at Eglington and Don Mills. Why not allow a private company build this? Why wait for the government? There is a market in Toronto for private and reliable transit.

If there were competition, TTC would probably lose ridership - it would therefore have to improve its own services to keep its customers. Also, a privatized TTC company with competition would have to find many cost saving measures - you would see a lot more automated entrances and a huge investment in automated trains.

You couldn't get rid of the workers union with privatization, but competition would weaken it. Look at what happened when VIVA went on strike - YRT was still operating. The VIVA union had to compromise - something public sector union members never do.

The situation we have now in Canada is that we must wait years for various governments to talk about their transport plans, then more years of studies, and we're lucky if anyone breaks ground after all this. Japan is currently building a new maglev with private money. Toronto is lucky if it gets new streetcar lines.

Stop being scared of the private sector - nothing will get done if we wait on the government. It's better to have something than nothing at all.

 

[kEiThZ]

But as has been pointed out, are there private companies clamouring to get into the transit business? There might be a few companies that'll run a jitney service but does any company want to run streetcars, subways or major bus routes? I doubt it.

You have to keep in mind that your experience in Hong Kong is unique. And in London thus far they've only really managed to privatize bus routes, which are so chaotic that most people take the Tube anyway. How much success have they had privatizing Tube lines? To the best of my knowledge the furthest they've gone on the tube has been PPP. They still don't have fully privately owned subway lines.

 

[hbl33]

Privatization works because of competition - Air Canada (ex-crown), Greyhound, CN (ex-crown) - they are private transport companies that work. They are profit oriented and therefore people oriented. If they didn't cater to people, then their customers would switch carriers and revenues drop - bad for business.

Friends of mine in Liberty village would happily pay a premium (4 or 5 bucks) for reliable express trains with limited stops from liberty village to Union, instead of the snail paced Queen streetcar. Same for friends in the distillery district, and family at Eglington and Don Mills. Why not allow a private company build this? Why wait for the government? There is a market in Toronto for private and reliable transit.

If there were competition, TTC would probably lose ridership - it would therefore have to improve its own services to keep its customers. Also, a privatized TTC company with competition would have to find many cost saving measures - you would see a lot more automated entrances and a huge investment in automated trains.

You couldn't get rid of the workers union with privatization, but competition would weaken it. Look at what happened when VIVA went on strike - YRT was still operating. The VIVA union had to compromise - something public sector union members never do.

The situation we have now in Canada is that we must wait years for various governments to talk about their transport plans, then more years of studies, and we're lucky if anyone breaks ground after all this. Japan is currently building a new maglev with private money. Toronto is lucky if it gets new streetcar lines.

Stop being scared of the private sector - nothing will get done if we wait on the government. It's better to have something than nothing at all.

I CONCUR with this post. Unions in Canada are way overpowered. The government and businesses often appeases its unionized workers than the public and the customers.

But as has been pointed out, are there private companies clamouring to get into the transit business? There might be a few companies that'll run a jitney service but does any company want to run streetcars, subways or major bus routes? I doubt it.

You have to keep in mind that your experience in Hong Kong is unique. And in London thus far they've only really managed to privatize bus routes, which are so chaotic that most people take the Tube anyway. How much success have they had privatizing Tube lines? To the best of my knowledge the furthest they've gone on the tube has been PPP. They still don't have fully privately owned subway lines.

Have you looked @ Japan as well? Almost all railways are privatized, and with little (and mostly no) government support, they are running well with profits and real estate boom along its rail services (yes its true though that Japan is right now in worse economic situation than we are in).

It doesn't have to be all Euro-like system from head to toe. And Hong Kong MTR is contracted by Chinese government to manage and build various subway projects throughout the country.

I would love to see transit deregulation in Canada as did US did with aviation industry. Privatization has been proven mostly effective in many industries from transit (MTR, to some extent, Tokyo Metro) to airliners.

 

[urbanfan89]

Privatization works because of competition - Air Canada (ex-crown), Greyhound, CN (ex-crown) - they are private transport companies that work. They are profit oriented and therefore people oriented. If they didn't cater to people, then their customers would switch carriers and revenues drop - bad for business.

If Air Canada has terrible service, WestJet can start better routes tomorrow. Ditto with Greyhound. Those who are not satisfied with CN can switch to CP tomorrow. Can someone dissatisfied with TTC Subways switch to a parallel private subway tomorrow? It may also surprise you that the government subsidizes air and bus routes to places which are unprofitable on their own: hardly free market.

Friends of mine in Liberty village would happily pay a premium (4 or 5 bucks) for reliable express trains with limited stops from liberty village to Union, instead of the snail paced Queen streetcar. Same for friends in the distillery district, and family at Eglington and Don Mills. Why not allow a private company build this? Why wait for the government? There is a market in Toronto for private and reliable transit.

Perhaps it would be profitable to have private railway lines if Toronto were like Hong Kong or Tokyo, but it's not. North America is way too spread out, and the competition is the automobile, which is vastly subsidized. Urban transit is an ultra-high fixed-cost initiative which will inevitably have government backing.

If there were competition, TTC would probably lose ridership - it would therefore have to improve its own services to keep its customers. Also, a privatized TTC company with competition would have to find many cost saving measures - you would see a lot more automated entrances and a huge investment in automated trains.

You couldn't get rid of the workers union with privatization, but competition would weaken it. Look at what happened when VIVA went on strike - YRT was still operating. The VIVA union had to compromise - something public sector union members never do.

Subways are a natural monopoly: I can't see any private investor forking over billions to build a parallel subway on, say, Bathurst Street to compete with the Yonge Subway. When there is a natural monopoly there is no rationale for privatization. There is no inner-city urban rail system in the world which is privately owned (some are privately contracted, which is not the same thing). Even the MTR was planned and built with HK taxpayer money, and today is majority controlled by the HKSAR Government.

The situation we have now in Canada is that we must wait years for various governments to talk about their transport plans, then more years of studies, and we're lucky if anyone breaks ground after all this. Japan is currently building a new maglev with private money. Toronto is lucky if it gets new streetcar lines.

A private company wishing to build a subway paralleling an existing subway line would also face years of red tape, which may or may not go anywhere. Finally, compare the population density of Kanto Plain with the population density of the GTA. Magnitudes apart...

Stop being scared of the private sector - nothing will get done if we wait on the government. It's better to have something than nothing at all.

Contrary to what the Fraser Institute wants you to think, the private sector has had its share of disasters, especially when a natural monopoly is involved.

 

[golodhendil]

# The TTC should be privatized, and competing companies should be allowed to build and operate their infrastructure.

This needs to be done ASAP!!

Toronto would see a lot more transit projects if private companies would be allowed to invest in it. In fact, this is how the TTC started - a bunch of private transportation companies.

The cities with the best transit systems, are often ones that are run by the private sector. I've lived and worked in both London and Tokyo.

Funny that you have lived in Tokyo and not known that both metro operators (Toei and Tokyo Metro) are government-owned, that the vast majority of railway infrastructure in the core was built and operated by government-owned or recently gov't-owned (JR East) entities, that these three together account for the majority of railway ridership in Tokyo, and that 4 of the 7 companies spun off from the "privatization" of JR are still owned by the government. Moreover re: hbl, the situation in Japan is unique with its ultra-high density so that basically any urban rail would be successful, and even then most private railway companies are successful not (just) because of their rail operations but their spinoff businesses such as real estate, tourism, and bus/coach ops.

As for the MTR in HK, after having planned and built all of the network you see today as a government-owned agency, after its recent privatization the HK gov't is still the majority stockholder, and transit planning is still strictly controlled by the government.

The London situation has already been explained by Keithz. All other "top" subway systems of the world - Paris, Berlin, Madrid, New York, Seoul, Singapore, Taipei, any of the Chinese systems - are all predominantly (for Seoul) or exclusively government-owned/run. So there goes your private urban transit paradise.

 

[kEiThZ]

^ Again, just because it happens in Japan does not mean it's feasible here. Show me a company interested in running transit in any Canadian city? Even in Japan, private operators are operating one-off lines here and there, not entire subway networks. That's similar to Blue 22 being a private service. And even there they got massive concessions with the government doing most of the heavy engineering and refurbishment of the rail line.

Do you really think private industry is up to build subways and rail lines in Toronto? I doubt they have the capital or the business case for it. Or we'd have heard about it by now. It's a government's dream to get a private operator interested in building transit, so that they don't have to spend their own funds.

 

[urbanfan89]

I know the government of Argentina privatized the Buenos Aires Subway and the suburban rail system in 1994. The suburban rail system fell into disrepair, and there was one extension of four stations on the entire subway system.

After the economic collapse of 2001, the system was renationalised and expansion has been steadier since.

 

[kEiThZ]

To take the discussion on a slight tangent, I do wonder though if allowing private bus routes could be beneficial to the TTC. They always say that bus routes are the least profitable operations of the TTC. So maybe privatizing some of them might take some of the burden off the TTC, allowing them to focus on the profitable subway network.

 

[urbanfan89]

What sets the TTC apart from other systems is that bus and subway are one system: you can step on a bus, transfer onto a subway, transfer onto another subway, and transfer onto a bus only paying once. Privatizing the buses will hurt the network effect and harm subway ridership.

In addition, the private companies will only want to operate on the busiest routes. Quieter routes will either be ended entirely or require the TTC to continue operating them, which either way will seriously cost public tax dollars. Perhaps some contracting out of bus operations could be permitted, with the operator awarded or penalized over punctuality, satisfaction, frequency, safety, and so forth. But CUPE will not like that...

 

[waterloowarrior]

But as has been pointed out, are there private companies clamouring to get into the transit business? There might be a few companies that'll run a jitney service but does any company want to run streetcars, subways or major bus routes? I doubt it.

You have to keep in mind that your experience in Hong Kong is unique. And in London thus far they've only really managed to privatize bus routes, which are so chaotic that most people take the Tube anyway. How much success have they had privatizing Tube lines? To the best of my knowledge the furthest they've gone on the tube has been PPP. They still don't have fully privately owned subway lines.

Right now Toronto's not very open, but I'm sure the transit companies would like to get in.. SNC Lavalin is operating the Canada Line and will operate Union-Pearson. I believe they also work with CN/CP on AMT. Veolia of course operates VIVA and many systems/lines around the world. Bombardier operates the GO trains. Numerous smaller Canadian cities and towns contract out bus service. The parent companies of our intercity bus and school bus companies operate transit in other countries as well.

Here are some major transit operators that might try to operate here... I was suprised by how many European systems incorporate privitization (e.g. Stockholm metro, Copenhagen metro ), I had thought it was mostly just the UK


http://en.wikipedia.org/wiki/Veolia_Transport
http://en.wikipedia.org/wiki/Arriva
http://en.wikipedia.org/wiki/FirstGroup
http://en.wikipedia.org/wiki/Stagecoach_Group
http://en.wikipedia.org/wiki/Transdev
http://en.wikipedia.org/wiki/ComfortDelGro
http://en.wikipedia.org/wiki/Ansaldo_STS (automated systems)
http://en.wikipedia.org/wiki/MTR_Corporation
http://en.wikipedia.org/wiki/Keolis

 

[GraphicMatt]

Contracting out the operation of a line to a private company is not privatization. There's some merit to doing this, if only as a way to try to skip over the union. I'd support contracting out other duties, as well - things like station cleaning, etc.

 

[golodhendil]

^ Again, just because it happens in Japan does not mean it's feasible here. Show me a company interested in running transit in any Canadian city? Even in Japan, private operators are operating one-off lines here and there, not entire subway networks. That's similar to Blue 22 being a private service. And even there they got massive concessions with the government doing most of the heavy engineering and refurbishment of the rail line.

To be fair, Japanese private railways don't operate "one-off lines here and there." The Big 15 (i.e., the major private railways excluding the JR Group and the legally private but practically public Tokyo Metro) each operate vast railways networks several hundreds of kms in length, representing some 20% of Japan's total railway trackage, and together carry about 30% of Japan's railway ridership (both in urban areas and for intercity). But again, Japan's situation is basically unique in the world.

In addition, the private companies will only want to operate on the busiest routes. Quieter routes will either be ended entirely or require the TTC to continue operating them, which either way will seriously cost public tax dollars. Perhaps some contracting out of bus operations could be permitted, with the operator awarded or penalized over punctuality, satisfaction, frequency, safety, and so forth. But CUPE will not like that...

If it has to be done, something similar to HK's bus franchises might work, where companies are awarded packages of routes in renewable franchises, with relatively strict conditions on minimum quality/frequency of service so that less busy/profitable routes cannot be cut nor compromised too much. However, strict free-market enthusiasts would probably find this system too restrictive (in their favourite example of a capitalist paradise), and it is true that bus companies in HK do post a loss on operation in certain years, only to be covered by other non-transit businesses so that the companies still post a profit overall.

 

[kettal]

The cities with the best transit systems, are often ones that are run by the private sector. I've lived and worked in both London and Tokyo.

Do you honestly believe any of the systems outside Japan are really private sector?

 

[waterloowarrior]

Here's a good summary I found that talks about different models of private sector involvement and regulatory and industry structure options... it's not black and white government monopoly vs anything goes

http://www.spp.nus.edu.sg/docs/fac/...ivery of Excellent Urban Public Transport.pdf

Public monopoly: Services are owned, planned and operated by a publicly owned enterprise. An urban region may have several of these state-run operators. There may be some private involvement in the form of management contracts or contracting out of certain other very specific tasks. In theory at least, the state takes total responsibility for the outcomes here. However, state-owned operators vary widely in their organisation, management efficiency and performance.

Proactive planning with service contracts: Services are planned by a state agency and procured from independent businesses (either private or state-owned) under service contracts. It is usually routes or bundles of routes that are the subject of contracts. The public sector agency takes primary responsibility for the planning of the network and for many of the service outcomes. A symbol of this is that system marketing and its public identity are created by the public sector coordinating agency, while the operators identities remain in the background. In the most ambitiously integrated systems the payment approach is often ‘gross-cost’, which means payment for bus kilometres run, sometimes in combination with other incentives payments, and the operators are limited in the tactical choices available to them. However, some variations use ‘net cost’ contracts, in which operators keep fare payments, and these usually involve the state taking somewhat less planning responsibility, less ambitious integration of the system, and require more tactical freedom to remain with the operators. Most focus in this chapter is on the more ambitious approaches above.

Franchises (well-regulated): Operators are given the right to serve a route or a whole area but with some obligation to do so in a comprehensive way and to meet service standards in return for exclusivity and discretion over many tactical details of service. Competitive tendering or other direct competitive pressures may or may not be present but the obligations are enforced effectively. Responsibility for outcomes is shared, and this may be symbolised by both the public sector regulator and the private sector operators having prominent public identities. Hong Kong, Singapore (until 2009) and many Brazilian cities have such systems in practice. Franchising the right to serve logical areas may be somewhat more effective than route by route.

Passive franchises: Operators are given the right to serve routes, usually with some simple service obligations and at least some exclusivity. Examples mentioned later include Kuala Lumpur and Seoul in the past. On paper, such systems can be similar to service contracts or well-regulated franchises above. However, the public sector fails to take active responsibility for planning of the route network as a whole. A related problem is that it often fails to adequately enforce obligations under the contracts. As a result, the network will often be a set of long-established routes, or merely be those proposed by operators. Incumbents often remain in place indefinitely with license renewals becoming routine and lacking any requirement for competitive tendering. Regulation tends to focus on fares and on protecting the incumbents from ‘unfair’ competition.

Deregulation: As used here this term refers to a set of arrangements in which the state has little direct influence over service outcomes. Almost always, it is the vehicle rather than the route that is the subject of licensing. Most typologies distinguish several variations. The most extreme form involves vehicle licensing with little or no barriers to entry or exit. Simple quantity limits may be added to this, but still with no obligation to provide service. Some basic features of quality may also be enforced. Effective deregulation may also exist if franchises for routes or areas lack exclusivity or allow for sub-contracting and do not impose any obligation for comprehensive service. Interestingly, deregulated services do not always have deregulated prices in practice.

A related but distinct dimension is the issue of how contracts to serve a route or area monopoly are awarded. This can be done in various ways, some involving more explicit competition than others. Options include competitive tendering, performance based contracts, negotiated renewable contracts, or some hybrid of these (Houghton and Hensher 2005).

 

[tkip]

Hmmmmmm.

From what I understand the vast majority of public transit systems around the world are government run or controlled.

I don't pretend to know the specifics of systems elsewhere but I doubt that turning over public transit to the private sector whose goal is make a profit would allow a system with as much coverage as what the TTC offers now.

I remember my brother once telling me that it is very difficult to make a profit off public transit, another reason why companies aren't lining up to try and provide competition.

Again, I'm not a expert. Just going by what others have mentioned.

And I always roll my eyes when people praise the private sector as the becon of salvation that will cure society's ills. I automatically question the accountability to the public when something goes wrong and it's a private company that has taken control of a public interest.

I also strongly caution against derregulation since in my mind it just opens the doors for potential abuse with little in the way of checks and balances to counter this.

"It doesn't work because turning a profit really shouldn't be a priority." I absolutely agree with this statement. Sometimes, profit shouldn't be the first and only priority when providing a service such as transit or healthcare. It goes against the best interests of said service to the public.

Making a profit just would not result in a extensive and reliable system of transit routes because the routes with less profit potential or losing money would get cut and you would have less options of travelling to your destination within the same system.