Comparative Performance in Urban Bus Transit: Assessing Privatization Strategies

The recent surge of interest in privatization reflects citizen and politician desires for reducing costs and improving quality of public services. This study assessed the costs and benefits of privatization in the context of urban bus transit. Five ownership-management structures were compared on a series of performance indicators. The results indicate that privately owned and operated systems produced more output per dollar and generated revenues than other types of systems. Publicly owned systems managed by contractors, however, performed no more efficiently and effectively than publicly owned, publicly managed systems. Despite these findings, large-scale shifts toward private ownership or away from contract management may be unlikely because of other factors influencing choices about ownership and management in the urban transit industry.