Government Is Strangling Transit; J. Semmens

Despite this sorry record, many urban politi cians are eager to build new rail systems,whichwill typically cost more than $50 million per mile to construct. The outlays will likely have even less impact on urban mobility than what already has been spent over the last two-and-a-half decades. Transit policy has failed to adjust to changing urban needs. Most forms of transportation origi nated over 50 years ago. Fixed-route bus and train transit flourished from the 1920s through the 1940s, but have been in decline ever since. Total ridership and market share peaked in 1945 at 23 billion passengers and 32 percent of urban trips. The current eight billion annual trips amounts to a market share of only 2 percent. A major factor in the decline of public transit has been the nation's growing prosperity. Rising personal income changes people's living habits. They move away from the high-density neighbor hoods served by traditional transit. They buy cars.

Mr. Semmens is an economist for the Laissez Faire Insti tute in Tempe, Arizona. They acquire a taste for convenience. Walking to a bus stop, waiting in a train station, fighting crowds for a seat, and worrying about missing the last departure are all inconveniences that modern urban travelers prefer to avoid. Yet these inconveniences are the trademark of public transit. Instead of developing ways to reduce such inconveniences, transit policy has entrenched them through regulatory barriers and belowcost subsidized pricing. Most urban areas prohibit unauthorized transit operations. Certificates of public convenience and necessity are required before a new transit service can be offered. Typically,the wouldbe provider of new services must prove they are needed and that they cannot be furnished by existing operators. The low-load factors, excess capacity, and deficits exhibited by existing operators usually are enough to secure regulatory rejection of any newly pro posed service.

A semi-fixed route, jitney-type service might be able to offer passengers reduced walking and wait ing while providing shorter transit times. Unfortu nately, this type of service has been suppressed by regulatory policy. A rationale of "preserving the distinctions" among modes of travel relegates the options to cheap-but-slow buses and trains versus fast-but-expensive taxis. Preserving such distinctions is clearly out of step with the times. For example, with conve nience at a premium, "one-stop" shopping cen ters have proliferated. Merchants seek to provide better service by shedding some distinctions. Many food stores now sell drugs, while many drugstores sell food. The fading distinction between these stores is a rational response to changing consumer needs. There is no reason why transportation should be exempt from this phenomenon. Private autos now account for nearly 95 percent of urban trips, while public transit provides only 2 percent. In protecting this 2 percent from new competition, regulatory policy prevents public transit from competing effectively with the auto mobile.

Transit alternatives and innovations not killed by regulatory means are likely to be undermined by subsidized competition. Government funding permits belowcost, predatory pricing of publicly operated transit. To be price competitive, private sector competitors would have to operate at one third the cost of publicsector transit. Rather than continue to waste large sums in an effort to perpetuate inconvenient and unpopular forms of public transit, we should be moving toward a market system of transportation. Instead of jealously guarding the edifice of publiclyowned transit, we should be deregulating and privatizing transportation. Deregulation will open the way for new com petitors. Intermediate forms of transportation such as jitneys or shared-ride taxis could offer a more convenient option for many travelers. The legalization of for-profit car pooling could enor mously expand the capacity and flexibility of urban transit. With more carriers available, more people might be willingto leave their cars at home.

Locating and structuring transit stops to accom265 modate buses, jitneys, taxis, and car pools could help revitalize the system. In this respect, transit operators can learn from shopping malls, which provide common locations for competing busi nesses. The availability of many stores attracts more customers than if each merchant tried to go it alone. The elimination of government subsidies would promote greater efficiency and encourage more entrepreneurs to enter the field. For example, rather than losing a billion dollars a year, the New York City subway system could be turned into a profitable business. A study performed for the Metropolitan Transit Authority a few years ago revealed that the subways could show a profit if fares were doubled. How much more could be accomplished if the excessive wage rates prevail ing in public transit were trimmed to reflect market conditions? The few examples of privately run subscription buses in urban regions indicate that commuter ser vice can be provided at up to 50 percent less than the cost of publiclyowned transit. This impliesthat privatization of municipal bus systemswould yield more cost-effectiveresults.

The argument that government ownership is needed because of market failure is nonsense. The market has been suppressed by government regu lation and subsidies. Government doesn't have to own and operate transit in order to promote urban mobility.In fact, the evidence indicates that government ownership retards such mobility. D The Facts Have Spoken H ow little the management of the NewYorkCit.y subways is touched by the spirit of business was proved a short time ago when it tri umphantly announced economies made by cutting down services. While all private enterprises in the country compete with one another in improving and expanding services, the municipality of New York is proud of cutting them down! When economists clearly demonstrated the reasons why socialism cannot work, the statists and interventionists arrogantly proclaimed their contempt for mere theory. "Let the facts speak for themselves; not economics books, only experience counts." Now the facts have spoken.

-LUDWIG VON MrSES writing in 1953 IDEAS ON LIBERTY $ 266 Hitting the Phantom Curve by Donald G. Smith M y son developed an interest in sports at an early age. As I recall, he was throw ing a ball in the playpen while ignoring his stuffed animals. A born competitor, he grew up seeing me as a batting practice pitcher and punt return man as much as a father, and our blood bond was forged in the fires of competition. A most important plank in our relationship evolved from the phantom curve, a rather clever bit of chicanery that I sold to him as the "unhittable pitch." I had used it in my playing· days with the Dakota All-Stars, but only sparingly because I was acutely aware that this weapon could ruin the game of baseball. I jealously guarded my awesome secret and refused to teach the pitch to anyone else. As a player I had used it only in crucial situa tions and threw it no more than three or four times a game. As the story went, no batter ever came close to hitting the phantom curve.