Bus outsourcing so successful that county should try more
Written by Michael Lewis on April 24, 2018
Talk about terrible timing: just as the county transit union was asking voters last week to oppose transit outsourcing, the county’s first bus outsourcing wave was reporting better performance while saving taxpayers nearly 50%.
The great results are helping deflate ballooning transit operating losses with the glimmer of hope of simultaneously raising what is now plunging bus ridership via contractor operation, all with no loss of quality.
We applaud the county for dipping a toe into transit outsourcing during its contract impasse with Transport Workers Union Local 291. A six-month report on what has happened so far in bus outsourcing shows lower cost, rising ridership, improving safety and increasing on-time performance. It indicates that the county should move forward quickly not only on its 14 test routes but on others.
The genesis of this ray of transit sunlight in an otherwise gloomy portrait of performance came last spring as Mayor Carlos Giménez was lamenting an absentee rate of more than 20% among county bus drivers, falling ridership and a resulting decline in transit revenues. Anticipating a $23.7 million transit budget shortfall, he said that a contracted firm could handle under-utilized bus routes for $50 an hour versus $130 an hour under county operation, and that no drivers would be laid off.
The county analyzed every bus route and pinpointed those where a shift to smaller vehicles driven by a private firm could work. The study showed that 24 of the county’s 98 routes never carried more than 20 people at a time. The county planned to contract 14 of them out.
A just-released report from the mayor to commissioners shows that the shift worked financially as planned, saving 49% of costs on the routes in the first five months since the Aug. 27 shift to operator Limousines of South Florida Inc. At that pace, the country will save more than $3 million on the cost of those 14 routes in one year.
It’s not just the saving in outsourcing, it’s the fact that the 14 routes appear to be working better for the public as well, according to careful county field checks that sampled 37% of all trips for quality.
Some 84% of the routes started on time the first month, but that rose to 97% by the sixth month. On-time travels throughout each trip had been 76% under the county but were 77% under private drivers, with more gains anticipated. Complaints on the routes fell from 79 the first month to 20 the sixth.
Most impressively in a system where ridership is bleeding, total use of the routes rose from 1,632 a month the first month to 2,453 the sixth – a gain of more than 50%.
Admittedly, these may be the county’s least-used routes so the sample size is small. But wouldn’t it be fascinating to test outsourcing on more heavily-used routes to see if the company could win back some lost passengers – county bus operations in January alone lost 15.3% of rides year over year, a loss of more than 700,000 rides.
That’s why the transit union seemed to be putting its foot in its mouth by advertising in a full page of the Miami Herald last week that the county doesn’t need elected officials offering “empty promises, gimmicks, or outsourcing to unaccountable contractors.”
In this outsourcing, at least, all the evidence shows promises that were all more than fulfilled on these 14 routes by very accountable contractors whose every move seems to have been monitored by the county’s transit department for safety, quality, effectiveness and savings. The report card improvements speak for themselves.
We acknowledge that these 14 routes were orphans – they had few riders to begin with, though numbers are climbing. But clearly outsourcing has worked there.
The mayor reports that coming next are six more regular transit routes and six Life Line routes – Life Line because they’re required by the state to serve the elderly and disadvantaged by running once a week for a few hours from senior centers to markets or malls. The county should save money in that wave of routes too.
Given the good outsourcing record to date and the transit system’s continued bleeding, we’d hope that officials are already mapping out a third wave – far busier routes that offer twin possibilities of bigger savings and more riders returning to buses.
One thing is certain: no private contractor is going to tolerate a driver absentee rate of more than 22% like the county has that requires paying hundreds of extra drivers to be at work to fill in and others on call to work overtime rates to fill in for absent fill-ins.
That means that any competent firm can earn a good profit while being paid less by the county than the county pays for its own transit operations today. As long as the county monitors performance tightly, more bus outsourcing should be a gain for taxpayers, bus riders and county hall.