Many of us rely on public transit every day. We need it to get to work. To medical appointments. To do our groceries. When transit is publicly owned and delivered, our needs shape decisions about routes and times. When private companies take over, profit comes first. Typically, that means higher fares and fewer routes.costs and a focus on profit-making routes at the expense of less profitable ones.
Declines in service quality
Since private companies are accountable to their shareholders, they often look for “efficiencies” that will help drive up profit. This can lead them to cut corners. Less than two years after a private company took over transit services in Fort McMurray, Alta., complaints skyrocketed. An audit found serious issues with the services, including delayed construction of a new bus facility as well as failure to implement a system to provide real-time ridership information.
Communities left behind
When transit is privatized, the main goal of the operator is to make profit. Since businesses don’t provide services at a loss, this means routes that do not turn a profit are slashed, leaving behind members of the public who rely on those services. In particular, rural and inner-suburbs routes which see less traffic, are often cut.
As private transit crept into Northern Ontario, public routes that connected remote communities to urban centres were scaled back. When a private company eventually cut unprofitable routes, many communities were hurt. People in need of serious medical care lost their lifeline to vital treatment in urban areas.
An additional cost-saving measure by private companies is service cuts during off-peak hours even though they provide essential transport to those without cars, such as seniors who rely on public transit outside of rush hours or shift workers who need buses to travel to and from work.
When services are privatized, the public still pays
There is no free ride for the public when private companies become involved in transit. Even in cases of transit privatization, development of new infrastructure, equipment, and routes is still heavily subsidized with public dollars. About two-thirds of the $2-billion capital costs for the Canada Line in Vancouver (built through a public-private partnership) was paid with public money. Additionally, the private company’s initial investment was fully repaid through ongoing annual subsidies.
When transit is publicly operated, profits made by the government can be reinvested in the transit system, meaning improved infrastructure and service. When services are privatized, those profits are pocketed by wealthy private companies. After Fort McMurray decided to bring its privatized transit services back into public hands, the city received an additional $1 million to $2 million in profits that were re-routed back into the public transit system.