Monday, May 20, 2024
Public transit

Consolidating Inefficient Private Transit Systems

I need to take a break from writing 1000+ word articles, so here’s a shorter one: What if we could consolidate competing, overlapping, and inefficient transportation systems, operated usually by for-profit entities on behalf of a combination of for-profit and non-profit (and even public) organizations, and use that consolidation to build a better unified transportation system?

I am thinking about this after watching a bunch of Henry Ford Health System buses idle in Detroit’s New Center neighborhood, picking up and dropping off employees. I wrote about this a bit during my exhaustive (and exhausting) 2018 study of transportation in Southeast Michigan, in which I interviewed hundreds of respondents about the role of transportation and mobility in workforce development. I was surprised at the time to learn how many institutions– ranging from large corporations like Quicken Loans to health systems to universities- operate or contract their own transportation services, usually to ferry employees from a distant parking lot to a centrally-located office or other facility. It makes you wonder: what would happen if these institutions could get together with even a complete train wreck of an agency like the Detroit Department of Transportation, and fund better service for everyone, probably at a slight improvement in efficiency?

To figure out what the answer to that question looks like, and without even addressing theĀ  we have to look at the cost. A ballpark estimate would suggest about a thousand-some dollars per day per vehicle, if they’re running constantly, which would make more sense from an operational standpoint. These vehicles might carry something on the order of 10-20 people, and, based on my survey of the vehicles picking up and dropping off this morning in New Center, the lower end of that estimate seems more probable.

colorful city transit buses
Institutions like universities, health systems, or large companies, often contract with private transit operators to ferry employees to and from parking lots. While this is always a great reminder of why parking should be priced as a market good rather than subsidized, it’s also an opportunity for us to consider what kinds of economies of scale might result if we were to consolidate multiple disparate private transit operators under the umbrella of, say, a public agency like DDOT.

Short Bus Vs. Lomgboi

How much does a city bus cost? Inevitably a lot more, with some cities saying it costs around $200 per hour to operate a bus. (No way it’s anywhere near that in Detroit, but let’s continue down this path a bit).

Of course, this accounts for multiple factors, and the actual marginal hourly cost of running additional service is probably nowhere near this much, but we also know that public sector agencies are notoriously inefficient. 24 hours at $200 an hour would work out to $4800 per day, which I’d assume would include the depreciation, maintenance, fuel, and labor, all-inclusive. It’s more than double the high-end estimate for a smaller transit vehicle, but city buses also have 2-4x the capacity of the smaller vehicles. As capacity is less important here than connectivity, we’d be imagining city buses running in a loop, or at least servicing a good portion of a loop, between destinations of relevance to the major institutional contributor here.

Let’s also consider that a car costs the average person $10,000 a year. Even if you assume two hours of usage every day, 365 days per year, that’s $27 per day. Approximately a third of people either can’t drive, can’t afford to drive, or would prefer to not drive at any given point in time, and this figure is especially valuable to consider in Detroit, where a huge percentage of households don’t own a car. Therefore, it’s pretty easy to figure some napkin math that the avoidance of having to own a car could easily save enough money to offset the cost of the bus’s upcharge over the private transit operator.

How much?

Let’s say that 500 people take the private bus each day. If a third of them could forgo car ownership altogether, that works out to several thousand dollars per day in savings– just a little bit less than the extreme high-end cost of operating that city bus for 24 hours straight. We’ve now demonstrated– through admittedly vague napkin math, but math nonetheless- that the upcharge for operating the permanent, fixed-route city bus is actually less than the total cost incurred to maintain this private system that, at present, cannot serve anyone but the private employees of the private institution.

Sound like a good value proposition?

There are a lot of pesky details, of course, but they mostly would have to do with figuring out how to schedule service, or potentially figuring out how to relocate the seas of parking lots around a place like HFHS to make it fit in better with the urban fabric of the city. (HFHS has made no efforts to do this, and as it stands, basically anything between the hospital on West Grand Boulevard and 2nd Avenue in Midtown is just a solid parkingscape. It’s almost like maybe it’d be worth getting the HFHS folks together in the same room as DDOT and discussing what we might be able to do!

I did not bother asking HFHS for comment on this story after my last debacle with them taking a month to respond to an inquiry, but maybe I will one day!

colorful city transit buses
Cities often lack the funding to provide additional bus service, while large institutions do not seem terribly interested in collaborating with the public sector on the development of more robust regional transportation infrastructure, instead usually opting to run their own transit service.

Nat M. Zorach

Nat M. Zorach, AICP, MBA, is a city planner and energy professional based in Detroit, where he writes about infrastructure, sustainability, tech, and more. A native of Lancaster, Pennsylvania, he attended Grinnell College in Iowa, the Kogod School of Business at American University, the POCACITO transatlantic program, the SISE program at the University of Illinois Chicago, and he is also a StartingBloc Social Innovation Fellow. He enjoys long walks through historic, disinvested Rust Belt neighborhoods at sunset. (Nat's views and opinions are his own and do not represent those of his employer).

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