In virtually every major city in the Western world, more and more people rely on the private automobile, fewer and fewer take public transit. This, despite punishing taxes on gasoline, despite other anti-car measures such as car-free lanes and car-free zones, and despite lavish government subsidies that transit receives in attempts to keep fares down and lure people out of their automobiles.
Except for one major city: London. There, public transit has gained market share against the car, not through even more lavish subsidies and not by discriminations against private automobiles. London has steadily increased its public transit use over the past two decades by slashing subsidies, by deregulating, by privatizing, and most recently, by tolling roads.
London proves the left wrong: Public transit does not depend on subsidies; it can thrive in a free-market environment. And London proves the right wrong: Public transit is not inherently inferior to the private automobile; it can outcompete the car where market forces reign.
Twenty years ago, U.K. prime minister Margaret Thatcher, thinking transit was outdated and the car society inevitable, deregulated public transit and cut its heavy subsidies. Until then, London’s transit system was in long-term decline. Without those heavy subsidies, Thatcher and almost everyone else agreed, public transit would soon reach a dead end. No sooner did she inject a modicum of free enterprise into public transit, however, than it did a U-turn.
In the first decade following Thatcher’s reforms, the cost of running a bus on London streets dropped by almost 50% per passenger kilometre, and the cost per passenger trip dropped by 33%. Chastened by competition, management became preoccupied with customer service, leading to better buses, more convenient routes, shorter wait times and 33% more kilometres travelled. Although fares rose in the absence of subsidies, passengers were willing to pony up for the better service: Bus trips increased by more than 10%.
The second decade saw more gains. Between 1996-97 and 2003-04, London bus patronage grew by 38% and then a further 5.3% in 2004-05. London buses now log more kilometres than at any time since 1957.
Where the state-run monopoly system was notorious for poor service, the private bus companies that now compete for customers increasingly draw raves. To discourage crime, 80% of London’s bus fleet now has on-board CCTV. Close to 100% of London buses have handicap-friendly features, such as low-floor accessibility and room for wheelchairs – the bus companies discovered that such features attract all manner of unexpected customers, including mothers with strollers and people with back problems. Smart cards eliminate wasted time standing in ticket queues. Service reliability on London buses is at its highest level since records began in 1977. In central London, after a new road toll system eliminated much of the traffic congestion, bus service levels especially soared.
The London Underground system has also responded to market forces over the past two decades, just recently thanks to a public-private partnership in which two private-sector infrastructure companies are responsible for maintaining and improving the Underground’s trains, track, signals and stations. The companies receive bonuses for above-par performances and provide the Underground with compensation if they fail to meet expectations. In the first full year of the partnership, the Underground met five out of six targets and in the second year, all six. The Underground now operates an all-time high of 69.4 million trans-kilometres, just above its target of 68.9 million. It carries 12% more passengers than it did in 1998-99.
Light rail transit is also up, giving London a singular achievement: In the past four years, public transit use is up by more than 16% while car travel is down by 4%.
Public transit deregulation is now beginning its third decade in London, and London’s transit authorities are confident of more gains. By 2010, they expect a whopping 45% increase in public transit patronage, compared with 2000 levels.
Meanwhile, transit authorities in the world’s other major cities, because they cannot contemplate even a first decade of deregulation, are going nowhere.