I’m in Bloomberg CityLab today. Key quote:
Postal and transit services have the same problem. We want them to attract high usage and we want them to go everywhere, but those goals imply opposite kinds of service. Pursuing either goal will cause outcomes that look like failure when judged by the other goal’s measures of success. It’s like we’re telling our taxi driver to turn right and left at the same time. When they can’t do that, we just yell louder and call them incompetent. Is that taking us where we want to go?
Transit, at least from the 1960s onward, is in a rather strange position.
Public services typically fall into one of two groups.
On the one hand, services such as police, fire protection, schools, parks, and libraries are provided without cost to the user. These services are not expected to be self-supporting at all, instead they are paid for through taxation.
On the other hand, utilities such as electricity, water, gas, and communications (telephone/cable/internet) charge fees, generally based on usage. Whether publicly or privately owned, these services are expected to be self-supporting, even profit-making. (Governmental authorities, such as public utilities commissions, may have the authority to set rates and service areas, to
Urban transit originally was a self-supporting privately-owned utility. While routes and fares were subject to regulation, the transit companies only source of income was the farebox. This changed during the early 60s, as farebox revenues began to be insufficient to cover the costs of providing transit service. Government at various levels stepped in and provided subsidies; however, in many cases, the subsidy was tied to certain performance levels (ridership, fares collected, etc.) This is about where we are now, a public service (like police, fire, etc) that is expected to gain at least part of its income from user fees.
There are a number of public services that are in that category (including the Post Office). Drivers often pay a small fee to drive the roads, but they don’t pay for the full value of the service (the roads themselves, let alone the upkeep). There are fees to visit national parks and forests, but they don’t cover the entire cost. There are statewide fees for various professions — everything from being a manicurist to a registered nurse. To open a restaurant, a bar, a brewery, you have to pay a fee. The fee doesn’t pay for everything related to the profession or the monitoring of the business — just a part of it.
In none of these cases is there an attempt to apply a private market mindset to the fee. If there was, like the post office, things would be very, very different. It would be hard to find medical care in rural areas, because the cost to monitor service in those areas is very expensive compared to that in the city. The same is true for restaurants, hair salons, and various other businesses. You would charge a bundle to visit the most popular national parks, while you could forget about a Senior Pass. States like North Dakota would have largely gravel roads, while cities would charge (and get) a bundle to drive in very nice roads. If you took a free market approach to any of these services, it would match exactly what would occur for transit or postal service: Excellent, high value service in the most cost effective situations (largely cities) and terrible service everywhere else.
Which is the exact reason why the comprehensive and efficient french rail system has been torn apart, route by route. Leaving just a few cash cows here or there, as the Paris-Lyon-Marseille overcrowded route.
It was serving a direct purpose : developping the small towns scattered throughout the country. By applying a market-based approach, successive governements (beginning by the socialists in 1984, after their rightist turn) did close all the small train routes. Closed all the post offices. Closed all the hospitals. Closed all the military quarters. Closed most of the schools.
Result? economic collapse of the small towns, Yellow jackets uprising. The state has no more presence in those areas, bar the police. All those state-led services were a peaceful way to make sure the central state is present and powerful everywhere in the country. They disappeared. The only remaining presence of the state there is hostile now. I’m not politically aligned with the yellow jackets (to stay polite), but their anger is unavoidable. They’re not clever or cultured enough to use the “taxation without representation” argument, but they could have – it fits perfectly.
I’m pretty sure that the tax income losses after the economic collapse of those rural areas costs far more to the central state than those public services did, back in the past (not even counting the direct damage done by the yellow jackets).
Pretty sure the rural French still have political representation.
What they don’t have is a high enough (perceived) return on investment. They believe they aren’t receiving anything or enough for the taxes they pay. In reality of course, they probably are receiving more government services than they pay in taxes… the same way red states in America suck up federal expenditures while blue states pay almost all the taxes. But in both countries, the rural folk simply don’t realize just how much they have been subsidized by urban and suburban taxpayers for pretty much the last century, and strongly resent how this subsidy has diminished from what it used to be (when schools, post offices, infrastructure used to be more plentiful in rural areas).
In other words, they resent that their subsidized lifestyles are going away. I personally think it’s worth national stability to have rural areas be heavily subsidized… but don’t kid yourself that rural folk still don’t have it much better than everyone else in terms of political representation or receiving benefits from the state.
Interesting. Probably true on both accounts – they are over subsidized, and feel under subsidized.
IMHO, the feeling of being under-subsidized comes from a very simple element : a bus that stops twice a day in a rural place costs probably more per passenger than the tram that stops in front of my flat. That’s more or less what Jarrett calls coverage service.
The thing is, I’ve got 64 square meters to live in (multiply by ten to have the square feet equivalent) with my family. I can go to the countryside, and get double the surface for the same price. But everything has a price, especially low rents. One of those costs, which you point out rightfully, is that the public investment is less efficient where you live, for mere reasons of density.
Coverage services, not limited to transport, are bound to lose money. But they have a political reason to be : stop coverage spending, and you’ll lose political control over those remote territories. And political control, ultimately, is safety. It’s even called strategic depth, sometimes.
Take an example : the less controlled part of France is the jungle of Guyane, at the Brazillian & Surinamean border. Despite big investments (the space center, the Legion quarters), a huge surface there is nearly uncontrolled and filled with illegal gold miners. There are a lot of efforts done to keep the area under control, for various reasons. The safety reason is obvious : those illegal gold miners are usually criminals, and increase the feeling of lack of safety in the urban areas.
The political representation of rural areas in french can’t be understood with an american grid. It’s very diverse, and while the local land worker has quite some influence, many poor living on social nets, pushed there by excessive land costs, have absolutely no weight. The countryside is overrpresented in the senate – which does not have much power. The assembly has the power, and delegates it to its boss at the Elysée (currently Macron, but it was the same under the previous presidents). Said another way, our countryside both has too much and not enough power, considering its importance.
All that to say that public service is a complex beast, and that should not follow private rules. Its main purpose is to help elsewhere (politics & overall economic development come to mind).
You have extraordinarily keen insights on public transportation, particularly on the tradeoff between ridership and universal service. I think you miss the mark on the USPS, though. Very importantly, Congress imposed a unique and crippling requirement on the USPS in 2006. This requires the USPS to pre-fund its retirement obligations for 50 or 75 years. No other organization carries a similar absurd obligation. There has been a bipartisan movement for several decades to privatize the USPS. This would leave vulnerable communities stranded, as a Wall Street-led postal operation would serve profitable communities only. The pretending obligation was intended to soften up the USPS, so it could be sold off for parts. It’s part and parcel of the neoliberal practice of cannibalizing public assets for private gain.
The USPS is self-sustaining without the pretending obligation. It is being deliberately sabotaged. The neoliberal playbook is to sabotage an institution or starve it of resources; claim a crisis; call for its privatization. The same thing has been going on with Social Security.
Transit and the postal service both carry things (people and envelopes) between lots of different origins and destinations. So they are really extremely similar services, and it’s not surprising to see this parallel.