UC Irvine Institute of Transportation Studies

Transit service contracting is a radical concept for an industry which has been organized around public monopoly principles for the past fifteen to twenty years, and even longer in many large metropolitan areas. The transit service delivery system which exists in most large cities has been predicated upon the concept that a single public organization should plan, operate, and administer public transit in that region. The mind-sets of local transit policy makers have been shaped by this practice; managerial skills and careers are geared to this system; and labor relations, work rules, and compensation practices in transit are those of a public monopoly. A shift to a system in which at least some transit service is obtained from private sector operators though a contractual mechanism thus poses a major challenge to the key transit actors at the local level. 

UMTA is fully cognizant of the radical nature of its private sector policy initiative, and aims to spark a veritable revolution in the way transit services are delivered, with service contracting assuming a much more prominent role in the service delivery system. Until recently, however, little was known about the current scope, magnitude, and characteristics of transit service contracting. Such information is essential not only to guide policy development, but also to determine the base from which UMTA hopes to increase contracting and to understand how public agencies are currently using contracting and managing this practice.

This information is now available, in the form of over 800 responses by public transit sponsors to a nationwide survey of transit service contracting. This survey obtained basic information on the operating characteristics, costs, and contractual arrangements of contracted transit services. Although UMTA hopes to stimulate a level of transit contracting which will quickly make the information from this survey obsolete, a substantial increase in transit contracting is likely to take several years to effectuate. Moreover, such an increase is by no means inevitable given the opposition of many important transit interests to UMTA's policy initiative. 

Accordingly, as the public transit industry stands poised at a point at which it could undergo its greatest change in the past twenty years, it seems appropriate to give a status report on the current use and characteristics of transit service contracting. How is the concept which is at the core of these potentially far-reaching changes being currently implemented in practice?