People usually do what they have incentive to do. That’s what makes most government assistance programs so destructive. They offer incentive to stay on the program rather than to get out of it. It’s also why most government services of any kind do not work as well as market alternatives. I’m going to use our local paratransit service as an example. I’m not picking on Dallas Area Rapid Transit (DART) specifically. I doubt any similar program functions much better. The reason, put simply, is incentive.
First let me explain what it is since not everyone will be familiar with the terminology. Paratransit refers to an alternative to fixed-route bus and train service developed to serve those who are not able to use or have difficulty using those options. It is a curb-to-curb shared ride system. Typical users are physically impaired in some way or may have cognitive challenges. It was developed in response to the Americans with Disabilities Act (ADA) of 1990, a law whose merits are debatable, but that’s another post. Among its requirements are that transportation providers create comparable alternatives to fixed-route services for those who cannot use them due to disability.
So out of the gate we have a problem. Compliance is not the same thing as cooperation, and when something is mandated, compliance is the most likely outcome. The incentive then is to do the absolute minimum to comply with the law. Anyone who has dealt with disability for very long can tell you that this is in evidence everywhere, not just on the bus. Are we better off? Certainly it is better to have these accommodations than not to have them, but as the segment of our population facing disability grows, who knows what innovation has been stifled?
The public transportation system is plagued with problems without even mentioning the paratransit issues, which I’ll get to in a moment. Again this is because the incentive is not really to serve the customer. The customer does not provide the bulk of the funding for most public transit entities. City, state, and federal subsidies do. So the organization is going to try to please the people with the money. Fares are too low to support the business and scheduling inefficiencies abound.
What if the market was allowed to develop a solution? Mass transit might be more expensive, but it would serve the areas that can support it. If we got the cities out of the practice of controlling private taxi service for the benefit of the big companies, prices there would come down to more reasonable levels, making it available to people who can’t afford it now and therefore must rely on mass transit or even paratransit services. Smaller scale shared ride systems serving commuters and niche markets would be free to innovate. Everyone would be better off. Small entrepreneurs would make money. Individuals would have more options, and overall prices for customized services would be lower.
I originally published this article in 2013. Uber and Lyft, car services that connect you with drivers using their private vehicles, existed but had not yet come to Dallas then. Uber might have been here but I didn’t know about it. They found a way around the Taxi cartels, and prove the point I was making. I use them regularly.
I imagine the loudest argument against this would be that individuals with meager means would be priced out of the market. I think it would be better if the government stayed out of the relationship altogether and let mutually beneficial arrangements and charitable organizations work it out, but if necessary some kind of voucher might be provided. However, as soon as you introduce that, you’re back on the way to government control of the industry because the customer is no longer the primary provider.
My wife and I have had first-hand experience with how the current system works, or doesn’t work. We are grateful that it was available, but I wouldn’t call it a customer centered experience. Unlike calling a taxi, clients must make a reservation for a ride a day in advance. One cannot make a reservation more than two days in advance. (As of this update there’s an online reservation system with limited capability that will give you four days.) Because it is a shared ride system you may be one of several people in the vehicle, and you cannot be guaranteed to meet your arrival time. Route planning is often poorly done by the dispatchers. Whether this is due to incompetence, malfeasance, indifference, or just bad software I don’t know. I suspect some combination of these. We have learned to plan to be at our destination thirty minutes before we really need to, which usually means arriving even earlier than that. When I want to go to a morning Bible study that meets at 6:30am I know I can get away with providing the actual time since it’s so early, but I would still often be picked up at just after 5:00 and arrive at 5:30. At this time the doors are locked, no one is around and I must stand outside and wait. I appreciated the independence it gave me and rather than trouble others to come and get me I used it until Uber and Lyft came along..
Reliability is another problem. The scheduling is inconvenient, but it too often happens that the schedule is not kept. This is particularly so when the rides are farmed out to local taxi services. One day my pickup did not arrive until it was almost time for my return trip from the destination. One time, my wife and I waited an hour past the end of the pickup window we were given. When I first called to find out where our ride was, the dispatcher said we were listed as onboard. The driver said he had computer problems, but I have my doubts. We were then driven all over the Dallas area and he refused to keep the air conditioner on, though the day was warm.
My point here is not to bash DART, but to point out one reason why the service and others like it are so bad. The end user is not the one the organization is beholden to. I do not doubt that individuals in the system desire to do a good job and take care of the people they are serving. I’ve had some wonderful drivers. But the system doesn’t help. The incentive for the company is to make sure the money keeps coming in. It will serve the end user only as far as is necessary to keep the spigot open. The customer is not the primary payer. The price for a trip is $3. The average cost of that trip using a full-sized paratransit van is $46 if I remember correctly. I don’t know what they pay the contracted cab drivers, but I do know at least at one time it was a fixed amount and the driver paid for the gas. It made for very unhappy cab drivers when they were routed all over town unnecessarily. Once I was driven within a mile of my house, then the driver went several miles in the other direction before coming back and dropping me off.
It is the same with bus and train service. Though buses are much more likely to be on schedule, I have had numerous experiences with busses showing up much earlier than their schedule dictates. Riders are told in the literature to arrive 5 minutes early, but buses have often been even earlier than that. It’s against the rules and if you complain they say they will send a supervisor out to monitor the route, but the problem persists. Again, there is not a sufficient incentive to really serve the customer. The trains are generally more punctual. They are usually not affected by traffic and they have to keep to the schedule lest they affect the whole system. However, I often see on DART’s Twitter feed notifications of delays due to malfunctioning equipment. Our track system doesn’t have many points at which anything can be done to route around problems, so the whole system is impaired, especially if the problem occurs in or near downtown where every single line runs on the same set of tracks. The system has never had enough ridership to pay for it, and if it did the capacity would not be there to support it. The price would have to be higher, reducing the ridership even further. I like having the trains and buses, but the reality is that without subsidies they probably wouldn’t exist, and the subsidies skew the relationship between customer and provider, leading to service that pleases virtually no one.