[M II A II R II K]

Private transit less rare than you’d think


Mar 03 2010

Tess Kalinowski

Read More: http://www.thestar.com/news/gta/tra...4--private-transit-less-rare-than-you-d-think

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It’s the conversation some say Toronto’s council has been afraid to have — whether contracting out could lead to a better, more affordable TTC. Until the mayoral race and budget deliberations suddenly brought the issue to the surface, “There’s been an absolute refusal to even consider it,†said Councillor Peter Milczyn, who sits on the Toronto Transit Commission. “There may have been people in the civil service who’ve seen the value of this, but they wouldn’t be allowed to pursue it.â€

Privatized transit might be a radical notion in downtown Toronto. But at least two major regional transit operators already contract their operations.GO Transit is about halfway through a five-year contract with Montreal-based Bombardier Inc. to crew its trains. Worth about $23.9 million annually, the contract was designed to ensure a higher level of service than the previous supplier, CN. It was also expected to save GO $1 million to $2 million per year.

York Region Transit’s regular bus service and its premium VIVA bus rapid transit are based on the system of contracted providers inherited from communities such as Markham that were amalgamated into the regional system a decade ago.

“It’s good value for our citizens and we have very substantive contracts,†said York Region chair Bill Fisch. “We have a process. If they do badly they lose money; if they do well they get bonuses.†York, which has four private bus providers, also contracts some routes to the TTC. Each supplier is allowed to operate in only two of the four regional service zones so the system is unlikely ever to shut down entirely because of labour or operational issues. When VIVA drivers employed by Veolia Transportation went on strike two years ago, riders still had the option of using the YRT routes. The flip-side is that the employer, not elected officials, are responsible for how long a labour dispute drags on.

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[T.O.Fanatic]

Perhaps it can save money, but look at what these two systems are meant to do. GO and VIVA/YRT are suburban transit/commuter rail systems, where most people have cars to perform their daily tasks, only taking transit to work because it saves on parking for the whole day. The TTC in contrast is used all day, many who cannot (or do not want) cars use our system to get around the city, whether its to buy groceries or head out for a night on the town. The reality is that no private operator would make a profit on a bus route after 8 PM, but those routes are VITALLY important. If the contract required a certain level of service, how many private bidders do you think there would be?

If we go down the route of (semi)privatization, be prepared for reductions in service. All of you who stay out late on weekends, prepare to take cabs home!

 

[Second_in_pie]

^^ VIVA and YRT both run a lot of service at night when it's "not profitable." That's not the point of the system or privatization though. The privatization is essentially "Ok, you manage the drivers and vehicle maintenance, and we'll pay you." Simple as that. There's no fancy "You have to have a certain passenger quota" or "You'll have to run your routes through x amount of neighborhoods." It's just a convenient system of micromanaging that not only micromanages, but ends up being a ton more efficient because the companies' pay is on the line if they can't manage their unions or give bad service.

I think I've said this line before, "Capitalism as it's supposed to happen."

 

[afransen]

It's absolutely astonishing how many people confuse outsourcing to a third party and privatization. Arguing that a private transit operator wouldn't operate a route after 8 pm even though you're paying them a flat fee to run the route is like saying a landscaping company you've hired won't cut your grass because he doesn't live in your house.

 

[Cranky Old Fart]

There is so much at the TTC that can be outsourced to 3rd Party Service providers leaving the TTC to concentrate on it's core responsibility ie. providing Public Transit for the citizens of Toronto.

Administrative functions at the Davisville Head Office. Property Management, Maintenance & Real Estate Development of Stations & Maintenance Yards. Maintenance of Vehicles and Transit Infrastructure. Cleaning of Facilities. Heck why is the TTC even purchasing vehicles and not leasing them ?

No need to dump Unionised Transit Operators once you take a blow torch to the overly bloated Management Staff at Head Office & outsource non-core resposibilities.

 

[DavidH]

THeck why is the TTC even purchasing vehicles and not leasing them ?

How would introducing a profit centre for a financing company into the TTC's operations improve things? All you will do is increase TTC's overall vehicle costs because there is now interest to be paid.

Many of the other things you've mentioned could be oursourced but that would not automatically be better. It would depend on the terms of the arrangements.

Oddly, though, it seems as if you would outsource all of the TTC other than the operators.

 

[Cranky Old Fart]

How would introducing a profit centre for a financing company into the TTC's operations improve things? All you will do is increase TTC's overall vehicle costs because there is now interest to be paid.

Many of the other things you've mentioned could be oursourced but that would not automatically be better. It would depend on the terms of the arrangements.

Oddly, though, it seems as if you would outsource all of the TTC other than the operators.

You do not think the TTC Borrows money at interest when purchasing Vehicles ?

Airlines have been leasing Aircraft for decades.

I would have to think that with lower short term payments that come with a lease over finance charges from buying these savings could be used to maintenance of station or to introduce Fare Automation.

I haven't crunched the numbers but I cannot see how the TTC is saving money buy borrowing money to buy fleets of $300k buses, keeping those buses for 30 years & maintaining & rebuilding those buses with their own unionised labour force with the associated salary, benefit & retirement leagacy costs of those workers.

I'm also thinking that leasing over buying would help introduce innovation & newer vehicle technology quicker.

 

[W. K. Lis]

Banks and financial firms could demand between $2 billion and $3 billion from more than 30 public transit agencies, potentially causing the agencies [2] to make significant cuts to services, transit officials have said.

That quote is from November of 2008. Transit agencies had made lease arrangements with AIG for transit vehicles. See this link for the article. How quickly we forget.

 

[SimonP]

You do not think the TTC Borrows money at interest when purchasing Vehicles ?

Airlines have been leasing Aircraft for decades.

It makes absolutely no sense for Toronto to lease vehicles. Airlines have poor to mediocre credit ratings (Air Canada is a B-). They thus have to pay high interest rates for loans. It makes sense for them to choose a lease over a loan. Governments have far better credit ratings (the city of Toronto is AA). Cities thus pay a fraction of the interest on a loan that an airline does.