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Tracing the Fault Lines Between Public and Private Transit Operators

Should private transit companies enjoy the same federal gas tax
exemption that many public operators receive? How does the existence of
private inter-city bus service affect the government's development of
new high-speed rail lines? And does it matter that private transit
firms are eligible for public subsidies, even if at a much smaller rate
than public rail and bus agencies?

30streetcar.600.jpgA private firm recently signed a deal with New Orleans officials to help run the city's streetcars, seen above. (Photo: NYT)

Few definitive answers to those questions were on offer today at a transit panel sponsored by the Mobility Choice
coalition, which allies members of conservative-leaning think tanks
with a handful of environmental advocates and urbanists -- but the
discussion yielded some provocative evidence of the fault lines between
public and private operators.

Principally sponsored by the Institute for the Analysis of Global Security (IAGS), the group describes itself as adopting "a fiscally responsible, free market oriented approach to expanding
competition among transportation modes for the purpose of reducing
oil's strategic value."

American Bus Association (ABA)
Chairman James Jalbert, whose group represents private bus and
motorcoach companies, lamented that the U.S. DOT's implementation of
its $10.5 billion high-speed rail program -- which is expected to
receive billions more in federal funding in the coming years -- did not
envision a role for private-sector firms that already provide
inter-city service.

"A good-quality system that could be
included in a rail project is now going to be run over by that rail
project," said Jalbert, also the president New Hampshire-based bus
company C&J. "We want to be part of the solution, but we need to be invited to the party."

private bus operators into proposed passenger rail projects has to
start at the state level, where officials make the call on whether and
how to pursue federal bullet-train money, Jalbert added. He described a
potentially successful partnership between public inter-city rail and
private bus companies as a shared scheduling system, where passengers
could purchase tickets for rail during peak hours but an equivalent bus
journey during off-peak times, when operating a motorcoach could be
more efficient.

Tom JeBran, ABA vice chairman and president of Trans-Bridge Lines
in Bethlehem, Pennsylvania, went further than his private-sector cohort
in suggesting that public transit agencies receive an unfair advantage,
thanks to their operating subsidies and exemption from the federal gas

"The only way I'd support" raising fuel taxes and
adding new interstate tolls to pay for nationwide transport
improvements, JeBran said, would be if both private and public transit
operators got an exemption from those new charges.

Robert Padgette of the American Public Transportation Association (APTA),
the transit industry's leading D.C. trade group, fired back at JeBran's
depiction of government subsidies that go only to public operators. The
U.S. DOT's Section 5311 grants, Padgette noted, do make taxpayer funds available to smaller, private inter-city bus companies.

Jalbert distanced himself from JeBran's push for a tax and toll
exemption for private operators, he could not help but answer Padgette.
The public subsidies for private inter-city bus companies average about
8 cents per passenger, Jalbert told the panel attendees. "With all due
respect," he quipped, "it's butt dust."

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