Buses are not widgets

James Wickham: In a recent article in the Irish Times (29/10/2009) Sean Barrett criticised the new Public Transport Regulation Bill. He claimed it was like a situation where 78% of widgets were produced by one supplier, and this was then enforced by law. James Leahy and James Nix had a good reply last week in the Irish Times (11/11/2009). But let's look more closely at these widgets...

Actually, buses are not widgets. Just like its human counterpart, the rational economic man, the widget is a convenient fiction. But just like the rational economic man, the widget can often detract from reality. Whereas widgets are bought by consumers in a market free of institutions, buses are used citizens in a market defined by institutions.

There are actually three different ways buses can be operated:

• (A) By a publicly owned company which has a legal monopoly. This is effectively the current Dublin situation since other operators are very limited (Aircoach etc.).
• (B) By competition in the market (competition 'on the road'). Here operators do what they like, and regulation is just minimal safety requirements. This is what Barrett wants for Dublin and this is effectively the situation in the UK outside of London.
• (C) By competition for the market (competition 'off the road'). The regulator specifies routes, standards etc. and actively plans the network. Companies bid to provide routes ('bundles') or the whole network. This is the situation in London, but crucially it's also the situation in many continental European cities.

Option (A) gives power to trade unions. Historically it also created 'good bad jobs' - jobs that were boring and not especially well paid, but were at least secure and free from arbitrary authority. Deregulate and you get cleaners and other support staff working at minimum wages as in London. Preventing low wage casualised jobs is important, but most of us would probably say that subsidising inefficient monopolies is a rather expensive way to do it.

But it's not that simple. A state-owned monopoly can (not must) ensure a reasonably efficient and above all integrated system, especially because there is only one owner. German and Austrian cities would be a classic example of this, as would be the RATP - the Paris public transport company. The problem in Dublin is that we have the worst of both worlds - state owned companies which do not provide an integrated service.

The problems of option (B) are well known and well described by James Leahy and James Nix. This is a world in which the bus is treated like a widget, users like consumers, there is no integration: ridership falls, and the service declines. This is a world in which the role of public transport as ensuring the right of citizens to move around their city cannot be discussed. It is a world in which the role of public transport in creating European public spaces and European cities is quite simply incomprehensible.

Option (C) needs a strong regulator to organise the network, and even more, it needs overall political direction. The example of London is quite good here. The elected mayor makes the political decisions and raises the funds. Transport for London (TfL) delivers the service through contracts with private companies.

Originally it looked as if the planned Dublin Transport Authority was going to come close to Option (C). But before the DTA was even set up, it's now merged into the new National Transport Authority. Like Barrett, but for very different reasons, I think this will be just another mess.

In all this, what are the unions doing? The paradox is that if we had no unions on the buses, most buses would have disappeared and we probably already would have the disastrous public transport system of most American cities. Yet union pressure now seems to have created a situation where Dublin Bus keeps its existing routes, but new companies can enter the market on new routes. As Barrett also says, the Bill also seems to mean there is no transparent contract for the services Dublin Bus will provide. This means there will be no political pressure to improve services. At the same time, the NTA will have no overall planning power. The unions have protected their existing members' jobs, but have made the provision of a better transport system for Dublin even more difficult.

Posted in: Politics • Labour market • Investment

Tagged with: trade unions • Transport • publicservices