Good Transit – Transit as a Good

Due to a peculiar aspect of American exceptionalism, unlike most countries, we persist in governing transit as if it were a public good. This misleading and inaccurate model prevents consideration of policies that will lead to better transit.

Public services are often provided by the public sector. However, not all public services are public goods – following the economic definition of public goods as neither excludable nor rivalrous, and thus capable of only being provided by a government or government-like entity. Many public services which are provided by the public sector in one place and time, are privately or cooperatively provided at other points in time (college is an example).

Every time someone arrives at a station or boards a bus, they must pay or can be prohibited from riding (or fined after the fact in the case of proof-of-payment systems). To be clear there are free transit systems, but that is by choice, they are excludable if not excluding. Many such as the Campus Connector on my own University of Minnesota campus don’t charge, but are also not particularly useful to non-members of the university community. These are functionally excludable, in that they are only of value to people in a particular geography.

Transit is in the short run sometimes rivalrous (when congested, if I have a spot on the train, you might not), sometimes not rivalrous (when uncongested, we can both sit on the bus – though stopping for me adds time for you), and in the long-run anti-rivalrous: the more people who use transit, the better transit gets. The Mohring Effect observes that each additional bus per hour lowers waiting times and schedule delays for travelers. Further note that creative scheduling (express plus local, e.g.) can lower travel times as well. We might extend that observation spatially as more direct routes are implemented with higher demand, reducing travel distances and thus times. Transit is a great mode in relatively dense areas where “everybody” uses it.

These characteristics define transit as more club-like than public. If we talk about transit accurately as a club-like good we can consider different types of institutional structures beyond the government department or agency, such as the utility model. Its institutional organization should reflect that.

My earlier post: Club Transit, discusses some of the ways we might reframe transit as a club good, with members rather than users.

4 thoughts on “Good Transit – Transit as a Good”

  1. Professor Levinson, what is your opinion about transit and competition?

    Do you think that government should liberalize everything (sort of what Thatcher did in Britain) amd allow competition in the market (such as Lima, Nairobi, etc)? Or do you think that govt. should have a role by giving concessions for certain lines (such as in most Europe nowadays)?

    My issue here is mainly about rail and systems that require right-of-way (LRT, BRT) which is on public land and streets. How can we manage free market entrepreneurship and transit avoiding “cowboy ride” problems?

    Thank you and congratulations for your blog and good work!

    1. It’s complicated of course. Curb Rights (Moore, Reja, Klein) is an interesting model for buses. I like the London bus model as well (certainly compared to the alternatives), which was done during Thatcher’s administration, and worked better than in other English cities. Spatial monopolies require regulation, but that’s is what re-compete is for. The UK concessioned inter-city rail system works well enough, though it is far from perfect. The London Underground PPP was a disaster. Conditions vary between markets, and an institutional structure (deregulation) that might work well in a thick competitive market might work less well in a market with thin demand.

  2. Yes, I am familiar with the Curb Rights proposal, however, as I read (http://publictransport.about.com/od/Transit_War/a/Review-Of-Curb-Rights.htm), nowadays is a fight to install one bus stop, imagine installing several, one for each bus company.

    Maybe the club transit solution that you presented is better, because in one bus stop various buses and vans can serve various customers, almost like “a bus stop = a small coach station”, where all the passenges already paid for the tickets in advance and are waiting for a bus.

  3. May I suggest an alternate term to “free transit?”

    My preferred term is “fare free.” I live in a community that provides fare free bus service, but when I pay my property tax, I can see that transit isn’t free.

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