Can privatization solve all of Chicagos public transportation problems?
In Allen, John G. & Ian Savage (eds.), Re-inventing Mass Transit: Moving into the Millennium. Chicago, Ill.: Regional Transportation Authority. This paper discusses privatization in the context of transit provision in Chicago. The paper discusses the meaning of privatization in the form of “competitive contracting” and contrasts it with “deregulation.” It then discusses how privatization may assist the Chicago transit market. There is ample evidence that considerable cost inefficiencies were introduced into CTA operations in the late 1960s and 1970s. Competitive contracting has shown itself to be an effective method to reduce inefficiencies elsewhere in the world. As a consequence there will be a more socially beneficial balance between fares and service levels. Furthermore, lower operating costs will reduce the current need for operating subsidies, thus allowing reduced sales tax levies and/or improved transit service. This paper indicates where there would be very high social benefit
