Public transit agencies across the nation are struggling to control costs without reducing service. One effective strategy used by a growing number of public transit agencies is to contract competitively for bus operations. Almost without exception, these agencies report that private bus companies can deliver equal or better service at a 20 to 30 percent lower cost.
The Massachusetts Bay Transportation Authority (MBTA) wants to use the same strategy and has accepted two bids to run 40 percent of its bus operations. The MBTA’s cost analysis shows that it will save 23.1 million over five years. However, a 1993 antiprivatization law (commonly called the Pacheco Law) sets up a series of tests that an agency must pass before it can award a contract to private company. In preventing the MBA from privately contracting for bus service, the Auditor has not developed his own comparisons of the MBTA’s in-house cost with the cost of private bids, nor has he provided any evidence that the service to be provided by contractors is likely to be inferior to the current level of services.
Bus transportation is a vital public service. The MBTA has recently announced a cost-neutral plan to maximize bus ridership by reducing service on certain bus routes in order to increase service on other, more heavily used routes. Many other transit agencies have discovered that privately contracting for bus services allows them to actually run mroe buses and still cut costs. Unfortunately, the Pacheco Law will prevent this from happening in Massachusetts.