Hibbs on Paratransit

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The Paratransit Light Vehicle
A Report to London Transport and the Secretary of State
for Transport
by the Adam Smith Institute

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TABLE OF CONTENTS
Public Transport 1
Deficiencies in the Present Configuration 1
The Light Vehicle 4
Advantages of the Paratransit Light Vehicle 5
The Effect of the Light Vehicle on Existing Traffic 6
The Assumptions Behind Paratransit Operation 8
Successful Light Vehicle Operations 9
(i) Hong Kong 9
(ii) Manila 9
(iii) Cairo 10
(iv) Buenos Aires 10
(v) Kuala Lumpur 11
(vi) Nairobi 11
(vii) Puerto Rico 11
(viii) Singapore 11
(ix) Calcutta 121
(x) Istanbul 12
(xi) Los Angeles 12
(xii) Other Cities 12
Light Vehicle Operation 13
Conclusion 14
Adam Smith Institute reports are the work of individual scholars presented as a
contribution to public policy debate, and do not necessarily reflect the views of the
Institute.
The Adam Smith Institute,
50 Westminster Mansions,
Little Smith Street,
London SWIP 3DQ
Tel: (01)-222 4995
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PUBLIC TRANSPORT
Public transport in London, as in most British cities, operates on the basis of five
major assumptions concerning supply. These are that it shall involve.
(i) Public sector provision and subsidy
(ii) Co-ordinated central planning
(iii) Large vehicles
(iv) Fixed stops
(v) Relatively fixed routes.
Its purpose is taken to be that of supplying a city-wide transport system during the
day, with a commuter mass transit system superimposed in the mornings and
evenings.
Each of the five major assumptions contributes in some ways to gaps and
deficiencies in the service which results from their application, leading to the
conc1usion that a new and additional class of service is required, a service derived
from totally different assumptions.
DEFICIENCIES IN THE PRESENT CONFIGURATION
The current mixture of surface rail traffic, underground trains and large buses has
the function of moving large numbers from point to point.
(a) Inflexibility: One weakness of the present configuration is that point to point no
longer means door to door. The system was created in the past when both needs and
dwelling patterns were different. The large scale operations have not been able to
relocate routes and stops to the new areas of demand, and are thus no longer in the
most suitable locations.
(b) Inconvenience: The potential passenger has to contend with travel to and from
the pick-up points, and changes en route. The evidence shows that door-to-door
time is of crucial importance to passengers, to be weighed against price, reliability
and comfort.
(c) Standardised supply: The use of large vehicles necessarily involves conveying
large numbers along a set route. The pattern of travel has people arriving at the
pick-up point from scattered locations, and dispersing to different destinations at
the other end. The large-scale supply has to treat as identical people whose travel
demands are dissimilar.
(d) Expense: Public sector supply is expensive to both consumer and taxpayer.
Public services tend to be characterised by more restrictive working agreements and

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less efficient use of manpower than their private equivalents, and to be slow to
introduce cost-saving capital equipment. The result leads to high costs, which are
split between prices which inhibit demand, and taxes which create political
problems. The debate concerning the balance between price and subsidy misses the
point that the overall cost of public supply is always higher than for a private
equivalent.
Even though many individual motorists have to bear the capital cost of the vehicle,
the annual car tax, the fuel bill, including fuel tax and the high cost of parking, the
major rush hour congestion each morning and evening shows how many still prefer
to be independent of public transport.
(e) Under-capitalised: Transport, like other public sector operations, finds itself
under continual current account pressure. Savings made at the expense of the capital
side result in an ever-decreasing proportion spent on capital. This means out-of date,
shabby and costly equipment. For passengers it explains their poor rolling-stock and
lack of modern services.
(f) Producer-orientation: lack of alternative choices for consumers gives the
producers a greater claim on service output. It is geared more to the accommodation
of the convenience of the workforce than any competitive system would be. The
result is an indifferent level of service in which the consumer is treated in an offhand
manner instead of being courted by high standards of attention. This in turn affects
reliability levels, resulting in delays without explanation, cancellations when staff
fail to appear, lack of cleaning and catering facilities. All of this takes place despite
high manpower levels; overmanned, but understaffed.
(g) Loss-making: The present transport system runs services at a loss. It has to seek
support from funding authorities, local and national, for support, and is unable to
provide new services as required, or to maintain an adequate level of investment.
(h) Political arena: Because transport in London operates as a public service, many
decisions relating to it become political ones, which ignore service needs. There is
political pressure to keep fares low, and to reduce simultaneously the rate burden.
Even detailed decisions concerning routes and service density can be influenced by
the electoral implications, rather than by the requirements of the service or the needs
of consumers.
THE LIGHT VEHICLE

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Many of the deficiencies of the present configuration could be resolved by the
addition of a new class of service based on light paratransit vehicles operating in the
private sector. The light vehicle, carrying anywhere from 8 to 16 passengers, makes a
major contribution to overall transport needs in many of the world's leading cities,
and could undoubtedly add a great deal to the quality of service available in
London.
The light vehicle is flexible and fast, making up in total numbers what it lacks in
individual capacity. Each one can convey a small number of passengers on a more
suitable, more individual route than can the large vehicles. It can cut down the door-
to-door travel time, tempting travellers to leave their cars at home.
Operation from the private sector brings with it efficiencies which keep down both
cost of operation and price of ticket. Comparisons from cities overseas show that the
light vehicle is cheaper to maintain, spends less time out of service, and is more
enthusiastic about picking up passengers and collecting fares from them than is its
larger public sector counterpart.
ADVANTAGES OF THE PARATRANSIT LIGHT VEHICLE
(i) Cost: The light vehicle overturns conventional ideas on the economies of scale.
Although smaller, it is more cost-effective to run. There are several reasons for this.
The large vehicle might carry more passengers for fuel or driver costs on a
theoretical journey, but the small vehicle scores in practice. Its capital costs per seat
are very much less. Very often the light vehicle is converted from an off-the-shelf
mass production vehicle, instead of needing to be custom made.
Secondly, the small vehicle fits more passenger journeys into its working day. Its
lower waiting time at pick-up points, its greater manoeuvrability in traffic and its
need to stop only when passengers require it give it a faster journey time and a
quicker turnaround.
(ii) Fares: Fares charged by light vehicles abroad are often lower than those charged
on the public system. Even where they are the same or higher, there is no difficulty
in making a profit, or any shortage in applications for licences to operate. Passengers
are prepared to pay for the more flexible service which they provide.
(iii) Viability: The paratransit light vehicle has an established record in many cities
(see below). It maintains lower garage costs, and lower network costs. It normally
operates with a lower loan proportion than public sector operation, and therefore
does not carry the same burden of debt repayment. It uses its staff more efficiently
and more flexibly, making use of part time work where demand patterns make this
an obvious economy.
(iv) Service: The typical light vehicle service is a flexible one, serving a planned route
without fixed stops. Passengers will generally board them at well-known points, or

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will hail them at convenient stopping points. Passengers similarly tell the driver
when they wish to alight. This gives a much more personal service, more tailored to
individual needs. Large numbers counter the small capacity of each vehicle. The
fewer stops to set down and pick up, together with the manoeuvrability, make its
service faster.
THE EFFECT OF THE LIGHT VEHICLE ON EXISTING TRAFFIC
(a) Creaming off: It is sometimes alleged that paratransit vehicles take away
customers on profitable rush-hour routes, and leave other areas unprovided. This is
alleged to increase the losses of the established service.
It is the rush hour peaks which cause the public service to employ more people than
they need to operate a day through service. Because the public sector rarely employs
part-timers, it finds itself paying for a full day those whose real function is to carry
the morning and evening peak loads. By lightening the rush-hour loads, the light
vehicle service can enable the established service to operate more efficiently by
rationalising both its manpower and fleet size requirements.
(b) Unprofitable services: Private service provided for profit might give insufficient
cover on "weak" routes, for night or Sunday services. The problem is that cross-
subsidy has been assumed, with "profitable" services helping to fund the others,
although it is by no means clear that the overall subsidy can be ascribed to fringe
services.
Less demand naturally means less supply, as the provision of night taxis in London
shows: but there are night taxis. Similarly the paratransit services abroad do cover
the fringe services, albeit with lighter density. There are some cities where light
vehicles cover only the poor areas, with the conventional system serving the better
parts. The shared cab contributes to this coverage, and it may be that consideration
should be given to licensing multiple use of vehicles for passengers going to
different destinations.
The need of some persons for a subsidised service is best met by subsidy provided
for the person rather than for the service. The provision of tokens for the
handicapped or the elderly would meet the problems of subsidy within a private
service. Weak routes not susceptible to sufficient cover even by informal transit
could be catered for by a contract service.
(c) Driving quality and safety: The quality of drivers, and the safety standard of
vehicles could both be assured by published standards appropriate to the vehicles
and their load. There is no reason to suppose that picking up and setting down at
points of convenience causes more congestion than the obligation to pull in at fixed
stops. Indeed, it allows the driver more flexibility to meet on-the-spot conditions.

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(d) Regularity and Reliability: Since the light vehicle follows no set timetable and
has no fixed stops, the traveller depends on there being one coming along soon with
available seats. The answer lies with numbers; sufficient licences must be awarded
to ensure a regular supply.
(e) Feeder services: As the paratransit vehicles become established, they have an
important role to play in feeding scattered passengers to and from the fixed points
of the conventional system. Thus outlying and difficult areas at the tail end of
routes, which contribute substantially to, public sector losses, could be chopped off
and replaced by light vehicle feeder services.
THE ASSUMPTIONS BEHIND PARATRANSIT OPERATION
Paratransit challenges all of the five assumptions of the conventional service. Firstly,
it operates more efficiently from the private sector, where the need for profit keeps
costs down and efficiency up. Secondly, it works best where it is allowed to meet
local demands. Where drivers apply for licences to operate which routes they wish
to cover, transport demands are met more effectively than where a central authority
tries to allocate supply and to determine time and frequency of cover.
The point is that the spontaneous order which emerges when light vehicles can meet
local demand contains far more information than does the bare plan of a central
administration. It is also more flexible and more responsive to changing conditions.
Paratransit small vehicles challenge the large-vehicle assumption by delivering
versatility and speed in place of bulk.
Fixed stops are a hindrance for small vehicles, and a nuisance to passengers. The fact
that the vehicle stops only when the passenger wants it to, and where the passenger
wants it to, gives a considerably improved service. Even the assumption of relatively
fixed routes can be challenged by paratransit, and replaced by general predictability
about where they operate and where one stands a good chance of catching one.

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The experience of many important cities shows that the paratransit light vehicle is
no mere theory. It has an established record of major contribution to transport
service stretching over many years. Theoretical discussion of its likely consequences
should be supplemented by practical knowledge of its performance where it has
operated.
SUCCESSFUL LIGHT VEHICLE OPERATIONS
(i) Hong Kong: Public Light Buses, legalised in 1969, were carrying a quarter of all
public transport trips within 3 years, and one third within 6 years. At that point the
government fixed their numbers at 4,350. They are profitable, recovering two-thirds
of purchase cost within a year, and popular. There are no fixed routes, stops or fares.
More is often charged for peak and nighttime services. Widely available, they are
preferred to conventional services. The government has supplemented them with a
"Maxicab" service to act as a feeder to major routes, and the private taxis have
continued to flourish.
(ii) Manila: Manila is famous for its Jeepneys, the brightly painted vehicles originally
based on US army surplus jeeps after the Second World War. Jeepneys account for
half of all public transport trips, and official figures put their number at 28,000,
though it may be twice that.
The jeepneys seat about 14 passengers, charge the same as the ordinary buses, and
add considerably to the colour and character of the city. Whereas the conventional
bus services are struggling, the Jeepney numbers are kept down by policy,
illustrating their success
The jeepneys foster a large domestic industry estimated at 500,000. This figure
includes 100,000 directly employed as drivers, operators, builders and services; and
a further 400,000 dependent subsidiary workers making equipment and accessories
or working at terminals.
(iii) Cairo: In the late 1970s a jitney service was permitted on fixed routes. Vehicles,
now up to 15 passenger capacity, leave well-known departure points when full.
Seats vacated en route may be filled. Jitneys leave every few minutes, charging more
than the conventional buses do.
Despite this they are profitable. One in five is owner-driven, many are owned by
outsiders and leased to drivers. A union determines routes and fares, and charges a
5% surcharge on tickets to cover terminal facilities. The normal transport system,
although it charges less, runs up huge losses.
(iv) Buenos Aires: The collectivo has grown from the 7 seats of its inception to 23
seats today. It carries three-quarters of all public transport trips. Urban transport
was privatised in 1962, since when collectivos have grown in numbers to 13,000,
about 4 per route mile. They are organised into associations for each route, called
"Empresas," which set rules, schedules and fares under government supervision.
Collectivos are owned individually (one third by drivers) or by partnerships. They

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are profitable, and are the mainstay of a city of 9 million people spread over 1,500
square miles.
(v) Kuala Lumpur: Minibus numbers were fixed at 400, the number they had risen to
by 1978. At that time they were carrying over half the peak passenger miles, with a
total capacity of less than one fifth of that of the conventional buses. They are very
profitable, returning more than one-third of capital outlay each year to licensed
operators.
The limitation on numbers, while it makes them more profitable, causes
overcrowding for passengers. In Kuala Lumpur, as often elsewhere, it is done in the
name of protecting an existing bus service. The more sensible alternative would be
to allow the one the public prefers to use and to pay for to expand at the expense of
the loss-making operation.
(vi) Nairobi: The matatu are a range of vehicles in the 12-25 passenger seating range,
and represent a service which developed informally. They were carrying 66,000
passengers daily in 1979. Two, in five are owner driven, and many have drivers paid
by the owner. They are profitable, paying off vehicle capital at 50% per year, but
have been criticised for poor upkeep and safety features. The government is trying
to bring them within the ambit of a formally regulated system.
(vii) Puerto Rico: The publicos are limited to 14 seats, and charge twice the fares of
conventional buses. They are publicly regulated, and are reckoned clean, reliable
and fast. A 1980 study in Caguas found them making five-sixths of all public
transport trips. They carry double the load factor of the big buses, and are profitable
where the others are not. Most are owner driven.
(viii) Singapore: School buses and certain other vehicles were allowed to carry
people to and from work, paid by monthly contract at whatever rates can be agreed
upon. Since work starts at different times from school opening, this leads to efficient
bus use. The buses cannot stop to pick up on public roads, however.
(ix) Calcutta: Despite having 10 million people compressed into a small area, the
Calcutta State Transport Corporation makes huge losses. Private buses, permitted
since i966, had grown to 2,000 by the late 1970s, 500 of these being minibuses Today
they are responsible for two-thirds of all Calcutta bus trips, and operate
without subsidy. Private route associations regulate services and schedules. Fares
are roughly the same as on the loss-making services run by the state body.
(x) Istanbul: Istanbul's paratransit is based on 4,000 minibuses, 12-seaters most
commonly, and 16,000 of the famous Dolmus vehicles. The Dolmus is basically a
shared cab, mostly 5-seaters, but with some which take 7. Between them they
account for over a half of Istanbul's public transport trips. They are very profitable,
but often overcrowded because of limitation on numbers. More minibus licences
would undoubtedly solve most of Istanbul's current traffic problems.

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(xi) Los Angeles: The Rapid Transit District (RTD) service was given competition in
1982 when 15-seat jitney vehicles were authorised. Numbers were up to 56 by the
end of the year, with 6,500 passengers per day being carried. The RTD fares,
subsid1sed down to 40% of the projected charge give fierce competition. The jitneys,
charging the same fares, seem to be holding their own without public subsidy. Even
if forced to increase fares, they expect to stay in business by providing a quicker,
more personalised trip. Other US cities with Jitney services include San Diego,
Indianapolis, Atlantic City, and several cities in Florida.
(xii)Other Cities: Shared taxicabs operate as paratransit light vehicles in several
cities, including Belfast, where they have been estimated to account for half of all
public transport on the routes they serve. They are called Por Puestos in Caracas,
and Sheruts in Israel, where they serve inter-city traffic. They used to operate in
London, taking passengers from Green Park to Victoria before the Victoria line
opened: five passengers at 6d would pay the 2/6 charge.

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LIGHT VEHICLE OPERATION
Although there seems to be an enormous variety of different types of service
throughout the world, the reality is that the paratransit has many similar operating
characteristics wherever it is found. The apparent differences stem from the vehicles
with their exotic names; the principles behind the service remain surprisingly
constant.
The vehicles are small, as are the operating units. Hundreds, rather than tens of
thousands of vehicles, form the larger fleets. Many are owner operated; many have
owners linked to drivers by profit sharing schemes.
All of them use the lower capital costs and easier maintenance of the light vehicle, to
make it an effective and low-cost piece of transport equipment. They use its size to
give a more individually tailored journey, and to give a faster trip for passengers.
They use its private sector operation to keep its operating and staffing practices
efficient, and to keep it responsive to service needs as they develop and change. The
competitive market keeps them alive to the need to court customers and to provide a
service they actually want at a price they are willing to pay.
The light vehicle has an impressive record of turning public sector loss-making
services into ones which are soundly-based private business ventures, and of
providing a popular service while it does so.

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CONCLUSION
The paratransit light vehicle, or minibus, or jitney, or by whatever name it is known,
could play a major role in reshaping London's transport to the needs of its
inhabitants. It could provide an important supplement to the fixed routes and fixed
stops of large vehicle public sector operations.
The arguments for it are soundly-based, and the economics of it are excellent.
Examples of its operation abroad show an impressive record of service and success.
The time has come to give London some experience of this vehicle and its method of
operation. It is suggested that sample services be initiated, and that further
applications for routes be sought
(The Institute is much indebted to research papers made available by Prof.Gabriel
Roth and George Wynne. and to papers presented at the World Bank Seminar on
Urban Transport. Bangkok, 1980).
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