Although I'm no fan of mass transit, that's generally because it's a publicly-funded debacle. Mark Aveyard points me to a City Journal article that explains some of the problems New York is having with its bus system and how those problems are the result of a corrupt public financing system.
Responding to complaints about poor service on the private lines, the mayor has demanded that the Metropolitan Transportation Authority take over the routes—which in one stroke would absorb them into one of the most expensive, heavily subsidized public transit systems in the nation. But the problem isn’t that private firms run the routes, as the left-dominated City Council and other anti-privatization critics have charged and as the businessman mayor seems to believe. The problem is that the city hands out those transportation contracts under a no-bid system that breeds inefficiency and cronyism. ...A "genuine privatization" scheme would eliminate subsidies entirely, and I'm not sure that's what's being proposed here. Nevertheless, it's a step in the right direction.To lower costs, genuine privatization is necessary—and that means setting up real competitive bidding for transportation contracts. Denver, Houston, Los Angeles, and San Diego have all realized sizable savings by turning to competitive bidding in this area. In Denver, bid-out routes cost 46 percent less to run than those the city still runs directly; in Los Angeles, which now contracts out more than half its bus service, the savings amount to roughly 40 percent.
Light rail could work in the same way, although building a line would require a massive capital investment by the developers. Such an investment could be financed with bonds, though, in the same way municipalities pay for public works projects.
The issue with public transportation, particularly those systems in larger cities, is that it reduces traffic, pollution, and importantly demand for more roads and highways. Subsidies are warranted in so far as without them, new road construction would be needed..it becomes a matter of picking your poison.
Though I agree that privatization should be looked at.
M: In some cases, like New York, yes. Part of the problem is that mass transit is an ideology to some people, even when it doesn't make economic sense, or when people don't want it.
We at Freedom Road Transportation Authority, a non-profit, are trying to set up a private mass transit system funded with federal, state, and private money. Are we headed
in the right direction?
Karen: Uh, it's not "private" if it's funded with state and federal money. That's tax money. That means it's public, or at best, subsidized.
So if a private company come in and take over-give them at least five years and they will need govenment funding and we will right back to square one-with poor service-because it coast million to runs this operation