Platform 27
Active Member
Indeed, the 407 situation proves that all the supposed customer-service benefits of private ownership actually aren't caused by the "private" part. They're caused by the "competition" part. They fly out the window once said private entity is operating in an environment where it holds an effective monopoly.
Individual transit lines virtually always represent natural monopolies. It's only when you hit Tokyo-like levels of service density where you can plausibly have real competition between operators for riders making individual purchasing decisions.
Indeed, economic theory tells us that merely having the ability to support two parallel competitors doesn't guarantee customer-experience-driven competitiveness. Oligopolies can still be ugly things: Look at all the talk given these last few days to how Wind's entry might finally shake up the mobile phone marketplace. The state of that industry in Canada today provides a pretty damning indication that three competing firms can still provide a lousy product with artificially high prices.
Individual transit lines virtually always represent natural monopolies. It's only when you hit Tokyo-like levels of service density where you can plausibly have real competition between operators for riders making individual purchasing decisions.
Indeed, economic theory tells us that merely having the ability to support two parallel competitors doesn't guarantee customer-experience-driven competitiveness. Oligopolies can still be ugly things: Look at all the talk given these last few days to how Wind's entry might finally shake up the mobile phone marketplace. The state of that industry in Canada today provides a pretty damning indication that three competing firms can still provide a lousy product with artificially high prices.