Cities use private firms to fill transit gaps

Urban mass transit -- for the past two decades largely the province of government -- is now seeing growing involvement from private enterprise. In Ann Arbor, Mich., the local transit agency has contracted with a private taxi company to provide rides at night rather than pursue the more costly alternative of running its own buses then.

In Orlando, Fla., an 11-mile rail-like link is being considered to connect Disney World with a commercial district -- a $375 million project that would be almost totally funded by private interests.

In New York City, some 50,000 people a day commute to Manhattan on private subscription buses.

The trend toward private involvement in mass transit has been gradually building at least since the early 1980s. But it has recently accelerated partly as a result of prodding from the Reagan administration and declining government aid for public transit.

The penetration of the private sector is not overwhelming. Businesses still operate less than 5 percent of all urban mass transit in the United States. But that's up from about 1 percent in the late 1970s. Moreover, many transportation experts see private involvement continuing to be a major theme in the 1980s, as cities search for ways to shore up transit systems in the face of stagnating ridership and rising costs.

``We are seeing a true renaissance on the part of the private industry in providing, on a selective basis, transportation services,'' says Kenneth Orski, president of Urban Mobility Corporation, a Washington D.C.-based consulting firm.

The change isn't without controversy, however. To backers -- notably the Reagan administration -- it is a way to spur more efficiency in public transit without siphoning off government funds.

To detractors -- including public-transit managers and union leaders -- it is seen as leading to a patchwork system in which private operators will grab the most profitable routes and leave public agencies servicing low-ridership areas. Critics don't see private business as a replacement for federal aid.

Indeed, the issue has become one more lightning rod in the enduring debate over the administration's attempts to spur greater private-sector involvement in many traditional government activities, ranging from garbage collecting to firefighting.

With mass transit, the administration has been trying to boost business participation partly through jawboning. The Urban Mass Transportation Administration (UMTA), for instance, has adopted a policy requiring public agencies that receive federal funds to allow private operators to bid for contracts when new routes are established or existing ones restructured.

But the UMTA is also studying more stringent actions, including federal legislation that would mandate recipients of federal aid to turn over a percentage of their operations to private business.

Even without these measures, however, pressure has been building on public-transit agencies to economize in the face of freezes or cuts in federal assistance.

``The issue is how much service can be put out for how much money,'' says Ralph Stanley, UMTA administrator. ``When you have spent $43 billion in 15 years and seen the number of urban trips go down . . . it is clear more subsidies aren't going to produce more riders.''

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