Public-Private Contractual Arrangements: Delivering Quality, Cost-Effective Transit Management
Today the private sector helps deliver excellent public transit in many U.S. cities. In fact, some 20% of city and county transit systems now contract out all or portions of their operations to the private sector. That’s up from less than 10% in 1998. There are a variety of well-documented public-private arrangements that are utilized in many U.S. cities to operate and manage transit and rail services under contract to local governments.
Transit agencies vary in what they choose to contract depending on their circumstances and needs. Some contract out all of their transit bus service, and not their paratransit, while others do the opposite. Some contract both transit and paratransit service. Others contract out all aspects of the management of the transit agency. In public-private sector contractual arrangements, policy control remains with the public sector. Transit agencies or their Boards retain control over all key policy decisions, including service levels, fares, annual operating plans, contractual compliance and more. The government or agency also retains ownership of all assets, vehicles and facilities. Competitive contracting does not impact the workforce’s right to organize –approximately 75% of the U.S. private contracting transit workforce is unionized.
Employees remain members of the same unions. Agencies that contract with the private sector continue to be subsidized by federal and local grants, like all transit agencies. The government or agency manages the competitive bidding process through its normal procurement processes.
Contract Type 1: