Private Sector Provision of Transit Services: Case Study

Abstract

Increasing attention on the privatization of transportation services has resulted in the identification of alternative models of service delivery. In this paper, five options for providing bus service in downtown Atlanta are examined. These range from having an authority, the Metropolitan Atlanta Rapid Transit Authority (MARTA), provide the service to having a private contractor deliver it. One over‐riding requirement is that the service be self‐sustaining. Results suggest that private sector involvement in a downtown bus‐loop system is potentially as successful as its involvement in traditional line‐haul service. In Atlanta it was demonstrated that a private bus contractor, to be self‐sustaining, must provide service of a generally higher quality than that typically provided by the transit authority. This is consistent with the results of other studies of profitable public transportation operations that offer premium service and typically address the needs of a specific market. A critical factor affecting the profitability of the proposed service is the wage structure of union labors.