Private buses make a comeback in NYC

by Stephen Smith

Transit activists have been bemoaning recent cuts in the MTA’s bus routes throughout New York City, but the cuts may have a silver lining, in particular for market urbanists: they may usher in the return of private buses to the streets of New York City. Private buses (and subways, and streetcars) were once the only transit options available to New Yorkers, but since the early 20th century, and especially after World War II, virtually all intracity routes have been subsumed by various levels of government, and the network has barely grown at all since nationalization (not withstanding the Second Avenue Subway, conceived eighty years ago by a private company).

Now that’s not to say that private operators haven’t tried to compete – the outer boroughs’ immigrant communities have had robust networks of informal private vans (known in NYC as “dollar vans”), which operate illegally but have been hard to prosecute, likely due to the fact that they are used mostly by linguistically-distinct immigrant communities. The recent cuts even propelled the bootleg bus phenomenon out of its immigrant ghetto, when a brave bus operator named Joel Azumah made headlines by operating a bootleg bus route along routes cut in Manhattan, Queens, and Brooklyn. This experiment was quickly quashed by an unrelenting bureaucracy, but at least it demonstrated the mutual desire on the part of riders and entrepreneurs for private service.

The city’s Taxi and Limousine Commission appears to have headed that call, and under the direction of chairman David Yassky is trying to replace at least some of the old bus routes with private buses. Unlike the city’s much-abused private van service, where operators are technically not allowed to pick up riders off the street who haven’t called ahead of time, the buses would operate with many of the privileges of regular city buses, with the added flexibility of being able to alter their routes to fit customers’ needs. Cap’n Transit has speculated that this discretion could be used as a back-door way to expand the private buses’ reach to areas not officially sanctioned by the program.

The pilot program has its detractors, the most prominent of whom are (not surprisingly) unionized MTA employees, who recently failed to get an injunction halting the program, which is scheduled to start in early September. Some transit activists also have mixed feelings about the program, which puts transit decisions in the hands of profit-seeking entrepreneurs. Benjamin Kabak at the NYC transit blog Second Avenue Sagas has argued that the private buses are a “necessary evil” and that “[i]nstead of offering services everywhere, privatized companies offer service only along profitable routes,” but considering that private operators are apparently making profits on the MTA’s least profitable routes, it’s unclear which current routes couldn’t also be served by the private sector. (In fact, only five MTA bus routes in the whole of New York City actually make operating profits.)

But even the transit union seems to view the program as to some extent inevitable, as they themselves have submitted an application to run one of the five routes up for grabs, which looks likely to be approved. (They plan on paying drivers their old union wages, though I’d be surprised if they can survive the competition.)

The program as it currently stands does not allow for unbridled competition, but as usual, the devil’s in the details. According to the TLC’s solicitation for bids, each “service area” has the potential to be served by up to three operators, which seems to allow for relatively free market entry and exit – even the wildly successful private subway and streetcar lines of the late 19th and early 20th century often negotiated exclusivity agreements with municipalities. The document also indicates that “preference” will be given to those who can offer $2 fares and accommodate wheelchairs, but if those two goals clash, it’s unclear which will take precedence. Fixed fares have also been a problem in the past – it has been argued the legally-mandated five cent fare doomed an earlier generation of private mass transit – and the fares charged by Joel Azumah’s nascent bootleg company were apparently as high as $6 for express service.

There are some ambiguities in exactly how the service will be regulated, but the mere fact fact that the program is being run by the relatively competition-friendly TLC and not the MTA is a promising sign. Despite the potential hang-ups, this program seems to be a serious step in the direction of privatization, and we at Market Urbanism will follow the story closely, as we’re eager to see private transport make a comeback in America’s commuting capital.