Next stop for mass transit -- Deregulation Street?

First there was airline deregulation; now there's transit deregulation.

Faced with rising costs and the declining quality of transportation in many parts of the country, scholars and travelers are questioning the old assumption that urban transit is a ''public good.'' Often they find little reasoning, besides private interest, behind government regulation.

Some experts see taxi, ''jitney,'' and private bus systems adding new vitality to the American transportation scene.

After a series of fare hikes hit Chicago's Regional Transportation Authority (RTA) last year, some suburban commuters fought back. They organized clubs to charter their own buses, with names like ''Raiders of the Lost RTA.''

Today up to 5,000 daily commuters ride on these subscription services, which go unregulated by the Illinois Commerce Commission.

Others are trying to inject the same free-enterprise system into Chicago's ailing taxi industry, which is controlled by a city-granted monopoly.

''I can't absorb the idea that riding a cab is a luxury -- it's something that normal people should be able to afford,'' says Al Polk, president of Local 777 of the National Production Workers, and a Chicago cabbie for 36 years.

While some cabs of the Checker Taxi Company -- which receives 80 percent of the taxi permits granted by Chicago -- sit idle, unlicensed cabs prowl the South Side as jitneys -- cabs that run regular routes like a bus.

Similar operations flourish in cities like Pittsburgh (where reportedly you can phone for an unlicensed cab), Boston, and New York (where the city is currently trying to untie a snarl of cab regulations).

Some cities like Washington, San Diego, and Seattle have sought to solve the problem by deregulation. In Washington, part-time drivers, often students, abound.

In Chicago, Checker says that regulation has kept it from raising fares or running jitneys to cover costs. Some drivers, like Al Polk, say official rates are too high for their best customers -- the poor, elderly, and handicapped who have reduced their travel because of hard times.

Checker has added to the controversy by trying to sell its city permits to other operators. The city is challenging the sales in federal court.

Roy Bell of the Chicago Area Transportation Study, a state government group, says the historic reason for regulation and limitation of taxis has been: ''I've got mine, let's protect it.''

City and cab company officials say regulations are necessary for safety and traffic reasons. As for current limits on cab permits, Jesse Blackmon, the city official in charge of licensing, says: ''This was something they set up a long time ago. There's no specific reason.''

Union leader Polk says he favors continued regulation, but wants to see the number of licenses expanded.

Christine Johnson, who works for Checker and helped research a government study of the Chicago taxi industry, says total deregulation would be difficult.

''We have a surplus of taxis in Chicago,'' she says. ''The market doesn't warrant all the taxis we have now. I would like to see them loosen the regulations on the actual operation of taxis, such as jitney service, which is now illegal.''

''The taxis have taken a beating from things like hotel courtesy cars and dial-a-rides,'' she says.

Originally, Chicago had an extensive private transit network with rail, bus, and trolley lines providing more comprehensive service than any other city. While some lines were profitable, many were subsidized by developers. The city acquired lines through annexation and political deals, picking up the tab.

Joseph Schofer, a transportation professor at Northwestern University, says private bus and jitney lines offer more efficient and diverse service than the current system.

He adds that some transit lines would not be profitable as private enterprises. Competitive contracts for running rail and bus lines could improve these, he suggests. But he calls a totally private transit system ''conceivable but highly unlikely.''

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