the evolution of logic in privately planned transit

Step out into most developing world cities, and you'll see something like this:


 Lots of vans sitting around, or looking maybe like they're about to go somewhere useful.  Vague cardboard signs in the windows suggest they may or may not be public transit of some kind.

They're called mutatus in Nairobi, colectivos in Latin America.  Over much of the world these informal, private, for-profit vans, run at low cost for low fares in areas of high demand, forming the basic public transit for a city.  Generally they run along a particular route out of a hub like the one above, but sometimes it's possible to vary the route depending on what you can negotiate with the driver.  You can count on them to hit key locations but not necessarily the exact path they'll take.  You also can't be sure of when they'll go.  Sometimes they wait until they're full before leaving.  

Today in Atlantic Cities Emily Badger tells the story of the Digital Matatus project, an attempt to map and describe the spontaneously evolved patterns that these semi-fixed-route buses operate.  Although nobody planned this network, it's more orderly than you'd guess.  Download the sharp, complete map here.

Matatu map slice

What do I notice?  Practically everything goes downtown!

Matatus have organized themselves into routes because that's to their benefit; they train customers where to wait for them along reasonable paths so that they aren't driving around looking for customers individually.  The idea of the route — and of an efficient, non-duplicative spacing between routes — arises spontaneously from the economics of the product.

But they almost all converge on downtown, creating huge jams there.  Nairobi is clearly big enough to  have large flows of people crosstown to many non-downtown destinations, suggesting that a more efficient and liberating network would have more grid elements.  This is a common thing that goes wrong in privately evolved systems.  Every matatu wants to go downtown because it's the biggest market, and a mutatu driver doesn't have to be coordinated with anyone else to fill a bus going to and from there.  This  problem that bedevils privately routed and scheduled operations everywhere.  

Crosstown service, by contrast, requires frequency on a single path connecting several major dots, and it has to leave from organized non-downtown hubs where many other services connect to it.   That requires more organization, so it's less likely to arise spontaneously out of private operators optimizing for themselves. 

So you get a single market overserved and other markets underserved.  This is very much like the way a narrowly-focused transit agency will throw too much service at a single market rather than building a network useful for many markets.  It takes more planning and management to create a network, and this usually requires a government willing to impose order.  

This same problem was observable after the wholesale privatization of buses in Britain.  Suddenly there was lots of duplication of bus service into the biggest downtowns as everyone chased the easiest prize, but service disappeared from crosstown markets that could have done well, but that required a network of organized connections to succeed.  That network is what privately motivated transit has trouble delivering, because it usually requires cooperating with people who are perceived as competitors.

Now and then, these systems get reorganized by government into more logical routes that spread the network across the city for easier everywhere-everywhere travel, as happened in Santiago in 2007.   The transition is hell, but when you're finished, you have a network that's much easier to use to go all over the city, and a much smaller knot of buses downtown.

The moral?  Disorganized transit systems "planned" by the actions of many private actors do naturally evolve certain forms of efficiency, but they do not naturally evolve into the most efficient and productive network for the whole city.  That final push into coherence requires network design!

16 Responses to the evolution of logic in privately planned transit

  1. Morgan Wick February 13, 2014 at 6:44 am #

    But! But competition and the free market and… </USconservative>

  2. Alexis February 13, 2014 at 8:30 am #

    To put it in math terms (your favorite, geometry!) they find a predictable local maximum, but because going from that maximum to the global maximum requires crossing a minimum unless coordination is imposed, it doesn’t happen spontaneously.

  3. neil21 February 13, 2014 at 11:08 am #

    I was trying to think of the die-hard free-marketeer’s response to the limits of this naive/emergent downtown-centricity. I suppose the profitable routes should subsidize unprofitable feeder routes, in their own customer-generation self-interest. Maybe it doesn’t happen because of transaction costs or information asymmetries, which opens the door to the government as mediator. I wonder whether technology (and perhaps cartels/clubs) like little GIS trackers would work: drivers could earn points from the other buses for running the lower-traffic feeder routes.
    Also a freemarketeer on twitter has reiterated your point about the unsophisticated public transit planner sometimes ending up here anyway. Taking something public is no guarantee of good management.

  4. Tim Gould February 14, 2014 at 12:28 am #

    Morgan Wick> Sadly this is neither a conservative nor a privatised issue. It’s a vision issue.
    In Brisbane and its surrounding cities, a reformed cross-town network was proposed based around connectivity, cross-town services, and transfers. It was implemented in full by the private operators in the surrounding cities. In Brisbane, however, where the bus service is Council owned by a right-leaning Council, it was not implemented because the changes were seen as too politically difficult.

  5. Carl W February 14, 2014 at 6:57 pm #

    To some extent, this helps the free market champion argument. While the system here is not optimal, it is better than MOST centrally planned transit networks in the US. Why? Sometimes politics – the triumph of the narrow interest. But also mediocrity common in the profession. That same mediocrity creates failed matatu business in Nigeria.

  6. Jeff Wegerson February 15, 2014 at 5:04 pm #

    Without government regulation to keep the market “free” it should eventually evolve into a monopoly as each small individual route gets bought into a larger route.
    Then in theory the single private entity could optimize the service into a grid. But the catch would be that they can make just as much profit at some lesser level of service that maximizes their profit at the expense of optimizing service.

  7. Shlomo February 16, 2014 at 7:19 am #

    In Israel, the government decides on bus routes and timetables it wants operated in a certain region, and private companies compete to submit the lowest bid for providing this service. Every few years, the process is repeated.
    Ever since this system was begun just over a decade ago, there has been a significant improvement in the route coverage, frequency, and ticket price of the bus system. This is marketed as “privatization”, but is obviously quite different from the UK’s privatization. I’m really scratching my head as to why a country would let bus companies choose on their own what routes should exist. The pitfalls in that approach are so obvious.

  8. Shaun Cleaver February 16, 2014 at 9:23 pm #

    Can someone who knows Nairobi comment on whether matatus are the only form of public transit vehicle in that city?
    Here in Lusaka, some of our most important orbital routes are provided by shared taxis. In one case that’s useful to me, a shared taxi that connected 3 radial lines began, and a few months later had sufficient ridership during the peak hours to fill Hiace minibuses (=matatu). From a rider’s perspective, the difference is mostly just a matter of technology; but from the roadside one looks like transit since it involves a van with 20 people loading at a “station”, whereas the other one just looks like a car with 5 emerging from a very typical looking taxi rank.
    I am hoping that both options are effectively covered in this project:

  9. John Smith February 17, 2014 at 4:19 am #

    This same problem was observable after the wholesale privatization of buses in Britain. Suddenly there was lots of duplication of bus service into the biggest downtowns as everyone chased the easiest prize, but service disappeared from crosstown markets that could have done well…
    Utter claptrap, I’m afraid, Jarrett.
    Since privatisation, most towns and cities in England have better bus services than before – largely provided at no cost to the public purse. Pre-1986 many cities required huge subsidies for buses to go where planners (and politicians) thought they ought.
    To me, the evidence seems to suggest that the free market closely matches supply with demand; the planned transport market costs more to deliver than the assumed benefits it provides, but it does keep the planners (and their consultants) in full employment!

  10. Joseph Alacchi February 17, 2014 at 6:25 pm #

    You’re wrong John that matching supply with demand makes the service “better”. It’s maximizing the mobility of individuals in all directions, not just in directions that have demand.

  11. David February 17, 2014 at 7:00 pm #

    What you’re observing here is a known but not-too-well-known problem in economic theory that I first noticed in my second year of my economics degree.
    Simply put, economic theory is posited in “economic space”, not “geographic space”. The real world doesn’t have many examples of pure “economic space”, but the internet is the one major example: if you want some kind of webservice, like website design, then it doesn’t really matter where in the world the competitors are located so long as they are all located in the “economic space” of the internet.
    But when you apply economic reasoning that is developed in the imagined world of economic space to real world geography, especially transport related, all sorts of weird things happen.
    Competition “collapses” onto a few corridors or locations (depending on the nature of the business), with equilibrium conditions that are demonstrably not the efficient ones predicted by economic theory – and sometimes there isn’t even an equilibrium condition at all (the example of the location choice of three ice cream vendors on a beach comes to mind).
    Monopolization tends to be one outcome, with deliberate non-standardization another. For technologies like railways, you can get gauge wars. If roads were a private sector endeavour from planning to operation, we’d probably have right- and left-hand drive cars on competing roads.

  12. Simon Vallée February 18, 2014 at 7:55 am #

    Carl W, transit in Nairobu has an inherent advantage on transit in the US: most people do not own cars nor can they afford to. Kenya has only 24 motor vehicles per 1000 people. Therefore, Nairobi has a very strong captive market which creates a huge demand for transit. So of course there is going to be a lot of lines on the major routes. US cities do not have the same context, most people own cars and the cities often are built to accommodate them (urban freeways and abundant parking). The result is that even major routes have too low demand to be profitable.
    But even then, Nairobi’s transit map shows that a lot of places are under-served and mobility apart from the major routes is very poor. That’s because in a state of competition between small agents, there is no incentive to create feeder lines or interconnections between routes. The advantages of feeder lines and interconnections act through the optimization of the major routes, but if we’re talking of small individual transit operators, there is no reason to make little or no profit to provide feeder lines that will lead more people to the major routes, because it’s the different transit operator of that route that will reap the benefits.
    Now, a big enough private company can make those calculations and provide feeder lines to its own routes… BUT in this situation we cannot really call this an unfettered free market anymore. The company has become so big that it is able to PLAN the sector of the economy it operates in. Much of what we call “free-market” capitalism is in fact big corporations centrally planning economic activities, just like a government agency, except with less ability to acquire subsidies from other sectors of the economy to subsidize its activities.
    BTW, I think Bogota has lessons here about free market vs planning. IIRC, before the Transmilenio, Bogota had private bus companies using bus only lanes in the middle of highways. A bit like Nairobi, for in Bogota too most people do not have cars and as such are transit-dependent. This system was highly inefficient, leading to a lot of congestion and pollution. With the Transmilenio, the local government decided to establish routes and more order in the transit system, contracting out the route to private companies. The result was a much better bus system, that was faster, more dependable and increased mobility. The perceived quality was also much better (humans like order and will tolerate slightly worse outcome if it can be more ordered).

  13. Benjamin S. February 19, 2014 at 1:36 pm #

    I have the feeling that some of the forces of demand behind the evolution of this kind of network in Nairobi are really more analogous to the emergence of omnibuses and streetcar radials in 1850s – 1930s North America than they are to the efficiencies of grid systems in industrialized countries today. Specifically:
    1. A monocentric business district. If you look at Nairobi on satellite maps, it’s pretty clear that there’s one very big agglomeration of density, and that’s downtown. Whether this is due to official planning, land tenure law, or business decisions I’m not sure, but it doesn’t look very much like the polycentric cities of Los Angeles, Tokyo, or Toronto, or the mostly-homogenously-high-density of cities like Paris proper. In these cities, grid-like frequent transit isn’t just official policy, it’s also a good idea. But in a heavily monocentric city, grid transit will almost never be as workable. (I would be interested to see a map like this for, say, Jakarta/Jabotabek area.)
    2. Overall density, and low income. In low density, high income cities with segregated uses, people will tend to pay for transit to get them faster to distant non-work-commute destinations, such as shopping, school, worship, etc. But if you live in a relatively high-density city (Nairobi metro density = Boston proper density, roughly) with corner stores, local schools, and so forth, I suggest that people with low incomes (i.e. most Nairobians) are likely to ration their transit use to only the things that absolutely cannot be walked to in a short time – such as CBD commutes. Much like in pre-automobilized North America.
    3. This one is purely speculative, but would make sense given the context: difficulty in creating and enforcing cooperation or transfer contracts, and perpetual fragmentation of ownership. Like Simon Vallee says, if it’s very difficult or costly for a company or association to form and start building a multi-mutatu transit provider, and run orbital/grid services that feed into its own radial services, then yes, this sort of thing will happen. But businesses being held down to a small size because of the impossibility of getting permits and licenses, enforcing contracts, and having access to loans, is a perennial problem in a lot of African cities. It affects all sorts of enterprises, from grocers to manufacturers. This could have a lot to do with interchange/cab-stand inadequacy too – if you can only ever own one matatu, why would you put money into building your own “station”, especially if you can never get land title? (However, I can’t really agree with Simon’s characterization of the calculations of a private transit company being “central planning” – if new competitors are allowed to enter the market, and are not kept out by subsidies or franchise monopolies, and bankrupt businesses are allowed to be disassembled and bought up, then it ain’t really “central planning” as we know it. Now, if the company uses its size to extract protections from government, then that’s another matter…)

  14. DAODAO March 30, 2014 at 12:11 am #

    In most countries, including the UK, Stalinist-style socialist direction of the organisation of public road transit is regarded as an anathema. The capitalist model of private provision and competition is more efficient and avoids a drain on public finances.

  15. Ken March 31, 2014 at 2:04 pm #

    In most countries, including the UK, Stalinist-style socialist direction of the organisation of public road transit is regarded as an anathema. The capitalist model of private provision and competition is more efficient and avoids a drain on public finances.
    Did you even read the article?

  16. Sascha Claus May 2, 2014 at 4:18 am #

    Sorry for the delay, I’m lagging behind with your blog …
    There is another thing very similar to the lack of grid elements, one that requires network design, too: Terminating downtown-bound routes at the first rail station on the way. You don’t even need private competition for this – on this side of the pond, county-owned regional bus companies used to be very fond of paralleling suburban or light rail (the former usually run by national rail companies and the latter by the city).

Leave a Reply