A NEW LOOK AT URBAN TRANSIT: CONTROL VS. MARKET APPROACHES

The purpose of this paper is to take a preliminary new look at urban transit with regard to free market vs. government control. There is a sharp division between the free market emphasis in the literature and the government control emphasis in practice, in the United States and elsewhere. THE BROAD FIELD OF PUBLIC UTILITIES Discussion over the broad scope of governmental role in the transportation and public utilities field has been greatly increased by highly influential persons and groups, such as think tanks and conservative political organizations. The consequence has been virtually complete deregulation of rail freight, truck, and intercity bus transport, as well as commercial aviation, electric power, water, telephone service and other utilities. The general evaluation of this deregulation and transfer from government operation to private ownership has been highly favorable, but there are exceptions. Local telephone service is one of the best examples of partial failure; extensive advertising with offers with little validity, endless efforts by phone calls, often misleading, and other means to get persons to change their local phone company. Rail freight deregulation on the whole is working relatively well, but has given rise to some charges of discrimination; a large carrier will provide lower rates for shipments originating on its lines in its cars than for shipments originating on small connecting railroads, for example. But these are not too significant in the overall picture. Urban transit, however, is another matter, showing a sharp division between the two groups. Many of the distinguished economists writing in the urban field, follow the lead of John 1 Meyer (1984), and including other well know transport economists such as Charles Lave (1951), George Hilton (1985), Clifford Winston (1998), and others. This approach is essentially th