in comparison with its role during the first half of the 20th century, private entities still provide many transit services, usually under contract with public transit systems.
The aim of this study was to gain a better understanding of the contracting approach to public transit provision in its many forms. During the past 20 years, numerous studies have examined the effects of contracting on service cost and quality, usually by scrutinizing the experience of individual systems. While the results from these studies indicate that cost savings are a main reason for contracting, they also point to a multitude of other reasons for the practice—from the desire for more flexibility in adding and withdrawing services to the special expertise needed for the provision of particular kinds of service, such as transportation for people with disabilities. Because so much contracting occurs under so many differing circumstances, it is impractical—if not impossible—to draw general conclusions about the practice on the basis of a relatively small number of system-specific studies.
To be sure, given time and resource constraints, a study-by-study evaluation was not a practical option for this project. In any event, the committee recognized from the outset that a comprehensive review of past studies on contracting would in all probability have generated more questions than answers. During the past decade, much of the debate over contracting has centered on the somewhat subjective matter of what proportion of transit agency overhead expenses should be allocated to contracted services. There is honest disagreement on which cost allocation model or accounting conventions are most suitable for particular circumstances; thus, the models and conventions used have often varied substantially from study to study. Likewise, previous studies of contracting’s effects on transit safety, on-time performance, customer satisfaction, and other aspects of service quality have varied widely in terms of study methods, assumptions, and data quality.
In the committee’s view, sorting out these differences among past studies and trying to use those studies to draw conclusions on the effects of contracting today would have proven futile given the time and resources available. Hence, the committee elected to conduct its own nationwide survey of transit service contracting practices and results. More than 500 public systems that receive federal transit aid were asked to report on their own experiences with contracting. Each public transit system has its own reasons for deciding whether to contract, and the systems’ general managers are in a good position to offer judgments on the results of those decisions. Therefore, the surveyed general managers were not given detailed instructions on how to define cost savings or measure service