Tuesday, 17 November 2009

Buses are not widgets

James Wickham: In a recent article in the Irish Times (29/10/2009) Sean Barrett criticised the new Public Transport Regulation Bill. He claimed it was like a situation where 78% of widgets were produced by one supplier, and this was then enforced by law. James Leahy and James Nix had a good reply last week in the Irish Times (11/11/2009). But let's look more closely at these widgets...

Actually, buses are not widgets. Just like its human counterpart, the rational economic man, the widget is a convenient fiction. But just like the rational economic man, the widget can often detract from reality. Whereas widgets are bought by consumers in a market free of institutions, buses are used citizens in a market defined by institutions.

There are actually three different ways buses can be operated:
  • (A) By a publicly owned company which has a legal monopoly. This is effectively the current Dublin situation since other operators are very limited (Aircoach etc.).
  • (B) By competition in the market (competition 'on the road'). Here operators do what they like, and regulation is just minimal safety requirements. This is what Barrett wants for Dublin and this is effectively the situation in the UK outside of London.
  • (C) By competition for the market (competition 'off the road'). The regulator specifies routes, standards etc. and actively plans the network. Companies bid to provide routes ('bundles') or the whole network. This is the situation in London, but crucially it's also the situation in many continental European cities.
Option (A) gives power to trade unions. Historically it also created 'good bad jobs' - jobs that were boring and not especially well paid, but were at least secure and free from arbitrary authority. Deregulate and you get cleaners and other support staff working at minimum wages as in London. Preventing low wage casualised jobs is important, but most of us would probably say that subsidising inefficient monopolies is a rather expensive way to do it.

But it's not that simple. A state-owned monopoly can (not must) ensure a reasonably efficient and above all integrated system, especially because there is only one owner. German and Austrian cities would be a classic example of this, as would be the RATP - the Paris public transport company. The problem in Dublin is that we have the worst of both worlds - state owned companies which do not provide an integrated service.

The problems of option (B) are well known and well described by James Leahy and James Nix. This is a world in which the bus is treated like a widget, users like consumers, there is no integration: ridership falls, and the service declines. This is a world in which the role of public transport as ensuring the right of citizens to move around their city cannot be discussed. It is a world in which the role of public transport in creating European public spaces and European cities is quite simply incomprehensible.

Option (C) needs a strong regulator to organise the network, and even more, it needs overall political direction. The example of London is quite good here. The elected mayor makes the political decisions and raises the funds. Transport for London (TfL) delivers the service through contracts with private companies.

Originally it looked as if the planned Dublin Transport Authority was going to come close to Option (C). But before the DTA was even set up, it's now merged into the new National Transport Authority. Like Barrett, but for very different reasons, I think this will be just another mess.

In all this, what are the unions doing? The paradox is that if we had no unions on the buses, most buses would have disappeared and we probably already would have the disastrous public transport system of most American cities. Yet union pressure now seems to have created a situation where Dublin Bus keeps its existing routes, but new companies can enter the market on new routes. As Barrett also says, the Bill also seems to mean there is no transparent contract for the services Dublin Bus will provide. This means there will be no political pressure to improve services. At the same time, the NTA will have no overall planning power. The unions have protected their existing members' jobs, but have made the provision of a better transport system for Dublin even more difficult.


Antoin O Lachtnain said...

Option (C) does not require a regulator as such. It requires a strategic provider, planner and manager. The roles of regulation and strategic planning/management are very different. The Act and Bill combine the two roles and this is a problem with the bill, one that could eventually result in a major constitutional and legal problem that could derail the Authority. This is probably the biggest single shortcoming of the bill.

You are talking about public transport and public spaces in Europe. This is really a planning issue rather than an issue that has an awful lot to do with public transport. Ireland has the lowest proportion of housing units in apartment blocks, and a very low amount of mixed residential/commercial development. This is the reason why we do not have the sort of feel you get in Spain or France. It has very little to do with public transport really.

The Nix/Leahy article is very unequivocal about things that are far from clear in reality about Option (B). For instance, it is far from clear that privatization in the UK is the disaster they say it is. See for example http://www.worldbank.org/transport/roads/rdt_docs/annex4.pdf , but there are many other papers you could look at.

Certainly, the UK public bus transport service operates at a much lower cost per vehicle km than the Irish model. There are plenty of UK cities other than London with perfectly good bus-based public transport systems. Glasgow and Edinburgh come to mind. York is another.

As I understand it, the NTA will have a role in planning public transport. Dublin Bus will not be able to continue operating any route without NTA's say-so, and NTA will be in a position to redesign the routes.

They will not have much of a land planning role, is true. But in practicality, there is going to be precious little land planning done in Dublin or Ireland for the next ten years as we struggle to fill the stuff we have already badly planned and built.

I really think that although a lot of what is proposed is 'a mess', there is still potential in it. I am optimistic, or at least hopeful. It is definitely wrong to say that it will make the provision of a better transport system even more difficult.

It really depends on how strong the executive team at the NTA are. They have to make some tough, bold moves to wrest control and bring real improvements.

Re political accountability - London is very different. They dom't have PR-STV, and that means that the system is much less clientist. The problem we have here is that public representatives keep convincing the transport companies to run services up back roads to satisfy small groups of constituents. These umpteen small diversions absorb capacity and slow down the service for the mainstream of users. In return for their responsiveness, public representatives support the transport companies in the Oireachtas. It's a vicious circle.

I don't quite know how you can say that if we didn't have unions, we wouldn't have public transport. I think what might underlie what you are saying is that public transport is traditionally used by the less well off, without private transport, and these also happen to be the people who are in unions. The thing is that we now need to attract a wider range of customers to buses to deal with issues of congestion and emissions.

Antoin O Lachtnain said...

One other thing - I think you are a bit unfair to Nix and Leahy and Barrett. Barrett did not say that buses are widgets. He drew an analogy between the market for bus service and the market for any other good or service.

I don't know what you mean with reference to institutions. The production and sale of goods in our market democracy is in general heavily regulated and circumscribed, or, to use your words, 'defined by institutions' (and in most respects, rightly so). For sure, transport plays a critical role in the community. But so do the food chain, department stores, and many other things. Bus services are not as unique as you make out.

It is absolutely not the case that a market based, unplanned network is always unintegrated and loses custom. Take the Internet for instance. It is all privately owned, and there is no central organizing authority. It is also not the case that a lack of a strong centrally planned and managed public transport system always results in falling ridership. The UK, for instance, has increasing ridership on buses and trains, for the first time in a number of decades.