Private Mass Transit in Detroit

Andy Didorosi has a plan for a private bus company in Detroit. Watch the above video for info and details. Since public mass transit is not working in the city, private actors are stepping up. Recently the M-1 Rail Group announced that they have raised nearly enough money to build the proposed Woodward Light Rail line, and that they will cover a decade's worth of operating costs. Didorosi's plan is less ambitious in some ways but potentially more innovative.

Public transit agencies in the U.S. nearly always have monopolies over transit services. A single, large agency controls the routes and technologies used to provide services. Transit agencies also have dual mandates the transit services must be 1) cost efficient, and 2) serve as much of the population as possible. Public agencies can't decide to forego a market because of the expense involved in providing service.* New services can choose their markets, however. This quote from Didorosi helps explain one of the key differences between private and public transit networks:

"We're not going to bite off more than we can chew. We're going to have a high bus density per route. So that will mean that we will have less routes to begin with and cover less area, but it will be more reliable."

Private transit networks will be smaller and denser than public transit networks because private agencies reply on fares to pay the bills and can't afford to be speculative in building service areas. Private networks can't afford to have excess demand, though private networks may be too small to be socially optimal. I have no idea if the new Detroit bus system will be successful, but it at least may provide an interesting case study of service networks and service innovations in transit. Since Detroit does not have a strong public transit agency, new services may not be threatened by existing monopolies and potentially can thrive. We'll see.

Some of the innovations in service are apparent right away. The buses will all have special paint jobs by local artists, music on the vehicles, wi-fi and GPS, and will be integrated with smart phone apps so that people can tell where the buses are. These may or may not attract riders. The fare will be a $5 day pass, which is also unusual. Overall I hope that some of these innovations work and that conventional transit agencies adopt what is successful plus develop their own innovative ideas. However, since many of these innovations cost money and not all will be successful it is difficult for public agencies to try new things. Transit agencies can't afford to be viewed as wasting public money on ideas that don't pan out.

I hope some of these projects in Detroit work, and I'm curious to see the overall effects on accessibility, network development and social welfare. Detroit is gaining a reputation as being a creative incubator, and we'll see if that holds for transit.

*Obviously transit agencies cut routes and add routes all the time, but they rarely abandon entire areas of a city.