Wednesday, 12 March 2014

How public monopoly prevents transport innovation


For perhaps the wrong reasons we're focused again on issues relating to public transport. And this is done knowing that the majority of Brits favour the nationalisation of the railways and, I assume, believe that mayors or councils should run the buses, trams and tubes.

The problem is that we're in a time of new opportunity and change that challenges the dominant idea that city transportation schemes need to be planned. That challenge sits in our pocket or our handbag.

Just as we've seen with financial transactions, governments and the agency businesses that feed off the granting of monopolies are resistant to the disaggregated and dispersed self-service models emerging as a result of the smartphone's growing ubiquity. And in doing so we do the public a disservice.

Before I talk about some specifics - drawing on US examples where the challenge to public transportation monopoly is more developed - here's a section of Boris Johnson's 'tribute' to union boss, Bow Crow:

"Whatever our political differences, and there were many, this is tragic news," he said.

"Bob fought tirelessly for his beliefs and for his members.

"There can be absolutely no doubt that he played a big part in the success of the Tube, and he shared my goal to make transport in London an even greater success. It's a sad day."

Now I'm sure that these were nice words about the boss of a key London 'stakeholder' but it beggars belief to say that a union forcing costs up and resisting change or efficiency is in the interests of London's transport systems.

So to San Francisco where there have been a series of battles around what are know as "tech buses" - these are services, provided by Silicon Valley business, that take workers from the city out into the valley for work. And they are unpopular with users of existing (more expensive and less reliable) public transport systems. Resulting in a variety of bus-based class warfare:

This December, several anti-bus rallies were held in the Mission District by a group that called themselves the San Francisco Displacement and Neighborhood Impact Agency. The group blocked buses and held up signs with statements like “Warning: Two-Tier System.” One man made headlines by dressing up, and, after claiming he worked for Google, berating the protestors with appalling class rhetoric. But it turned out he was really just an imposter, having worked previously as an Occupy organizer. Another protest in Oakland led — as ones there often do — to bus vandalism.

Note the words 'two-tier system' - hipster techie folk who earn good money out in the valley get a lovely shiny bus service whereas the other folk have to make do with late, dirty buses. And it spills over into the Bay Area's gentrification rows:

“In case you’re wondering why this happened, we’ll be extremely clear. The people outside your Google bus serve you coffee, watch your kids, have sex with you for money, make you food, and are being driven out of their neighborhoods. While you guys live fat as hogs with your free 24/7 buffets, everyone else is scraping the bottom of their wallets, barely existing in this expensive world that you and your chums have helped create."

The problem isn't American capitalism though. The problem is the municipal monopoly - the unholy alliance between the city government and unions to deliver an inefficient, expensive and unresponsive transportation system:

Muni, the city’s local bus, rail, and cable car service, is similarly inefficient. A study last May found that its on-time ratings hovered around 50 percent due to rail cars that regularly broke down. These delays cost an estimated $50 million in productivity — yet Muni has California’s second-highest paid transit workers.

The government-run rail that follows a similar route as the tech buses is Caltrain. Today, its customers endure a plodding, 90-minute ride from San Francisco to San Jose. This same trip takes under an hour by automobile, helping explain why some companies now bus in their employees.

Those 'tech buses' are a response to a failed service monopoly (and that monopoly's owner - the city council - has got its rents from the 'tech buses' by charging them a fee to stop at a bus stop) that doesn't meet the needs of local commuters. Looking a little deeper we find that the San Francisco authorities want to stamp out any innovation - not just the 'tech buses' but the growing use of ridesharing, a business that threatens the lucrative taxi monopoly (a license in San Francisco is over $250,000, in New York the coveted 'medallion' sells at touching $1m).

Indeed the business threat of this 'sharing economy' (we've seen the same regulatory response to Airbnb, for example) is repeated across other US cities - Seattle, for example, has threatened rules that would limit the numbers of drivers using services like Uber and Lyft, and one Seattle councillor proposes that the cab drivers become 'unionized city employees'.

Back in San Francisco, where Uber started, the debate is stuck at finding ways to control these new private transportation systems, to force the 35,000 people using the 'tech buses' back onto the old creaking public system and to regulated cabs rather than find a neighbour to share your ride with.

For Britain (outside London) the situation remains more flexible with a mixed economy of provision as well as the widespread availability of mini-cabs as well as Hackney cabs. There are moves by public transport authorities towards more directed and planned models such as 'quality bus contracts' and local councils jealously guard the revenue generator that is the taxi trade. But what isn't happening - with one or two striking exceptions - is the exploration of new economy solutions to urban transportation. Indeed the debate, such as it is, seems to me moving more towards greater use of monopoly power to prevent innovation than towards actually meeting the transport needs of local residents.

But then, so long as we think union bosses like Bob Crow are part of the solution rather than an obstacle to better services we will be stuck in this dead debate. Even worse if we persist with the 'Big City Boss' approach to delivering those services that Boris Johnson (drifting ever nearer to Bloomberg's urban fascism) seems to prefer. The development of better transport really isn't down to pouring billions of borrowed money into the ground and cosy deals between union bosses and city mayors.


1 comment:

Neil Garratt said...

I suppose the difficulty lies in correctly separating those situations in which a natural monopoly exists or where competition is difficult, such as London Underground, from situations where competition could be created or would naturally arise if not stifled.

One of the reasons why I think roads are fundamentally better than rail is that rail naturally leads to rigid central planning and monopoly provision, whereas roads naturally lead to competition, enterprise and innovation.

This is why I think autonomous cars are so interesting, as they offer a combination of the innovation, flexibility and competition of roads but with many of the efficiency advantages of public transport.