Solving the South Side transportation problem

The case for citizen-operated mass transit

One major reason it's been so far possible to continue inefficient profligate spending and debt in the public sector in this country is our history with a previously free and efficient economy. Until recently the massive structural deficits created by generous public handouts hadn't had an easily noticeable effect on public institutions and structures. It has been possible to set up and operate inefficient but politically advantageous systems, even while outlawing efficient systems to ensure the continued operation of those preferred.

But the debt has been mounting. And mounting. The fiscal realities at all levels of government will no longer allow a grossly inefficient public sector. So places like Chicago will have to restore the natural balance and allow the efficient ways of doing things to defeat the politically profitable. It is in this environment that city ought to soberly examine the ineffective and inefficient transportation systems on the vast South side of the city. It is not efficient nor feasible to build a South red line extension, and it makes no sense considering the nature of the transportation problem on that side of the city.

A solution for the South Side

The South side of Chicago is massive. Considering that the north red line carries more passengers than it ever has, despite the city's million soul loss, it should be very apparent that a lot of the South side is much less densely populated than it once was. This poses a problem for the transportation system as currently designed.  Currently the system functions most effectively when dealing with high ridership corridors. But its pretty clear that this is not the ideal model for the needs of this section of the city – transportation must be more flexible, both in responding to changing demand during the day and the year and in going where the commuters are, even as they spread out over a wider and wider area.

In much of the world this is a problem solved with share taxis.  These are vehicles ranging in size from those that are capable of holding a handful of people to those holding 50 or more. They function as minibuses with fixed fares – essentially the same as a CTA bus, except privately owned and operated. The difference is that they tend to have flexible routes, stopping on demand, following the commuter traffic, and not necessarily having fixed schedules. But herein lie their assets for solving this particular problem. Share taxis would generally be smaller and more numerous than CTA buses, so they can more ably match commuter demand – just as smaller pixelation results in a more exact match to the reality behind a picture. And share taxis can run closer to full than CTA buses all while coming more often – increasing the attractiveness of using public transportation. Their private operators are free to spread out over a wide area to meet demand.

But that's not necessarily even the best part. Share taxis have a low barrier to entry, so that private entrepreneurs can buy a van or small bus and then go in to business. Indeed, legalizing this form of transportation would encourage south side neighborhoods to be proactive participants in the solution to a major local problem! This could be a notable source of employment in communities that are begging for such opportunities.

A more substantial introduction to share taxis around the world. 

Problems with the provisions for share taxis in the recent taxi regulations overhall

Now, a curious thing has just happened. Whether through Gabe Klein's open lines of communication or no, a licensing classification for jitneys, also known as share taxis, has been included in the taxi regulation reforms passed earlier this year. However, there are several problems with this legislation according to my reading.

First, the legislation defines “jitney” to mean a vehicle with seven passengers or fewer. The kind of share taxis I'm speaking about are usually capable of seating 15 to 50 people. This makes it unclear as to whether share taxis have been given a capacity ceiling or whether share taxis would simply fall in the general “public passenger vehicle” category.

Second, the legislation restricts “jitneys” from their most immediately logical operating areas, namely the airports and the loop. I can only assume this is part of an agreement with the taxi associations that had “input” in to a law that increases barriers to entry for competition. (For taxis: Requirements to retire non-hybrid vehicles after four years?? Why? Just so individual entrepreneurs can't compete.) Speaking of which, any route the CTA wants to protect can simply be banned to jitneys by the applicable alderman. Apparently the CTA operates so efficiently that it deserves monopolies-on-demand.

Third, the high insurance requirements may deter private entrepreneurs from entering the business due to increased barriers to entry. Are owner-operators required to pay for their own workers comp insurance? That makes no sense; wouldn't that simply be health insurance? And vehicles larger than the 7 passenger threshold capacity mentioned above are not permitted to purchase the lower 100,000 level of public liability coverage. To me, it seems excessive to require anything in access of minimum legal state-required coverage, but I supposed that is a by-product of overactive lawyers. Philosophically, requiring more insults the entrepreneur's or the employee's wisdom in choosing for himself to work without workers' comp. Excessive public liability insurance requirements insult the entrepreneur's choice to take on the risks of operating, and the passengers' choice to take on the risks of boarding. Share taxis are likely to be just as safe as CTA buses, so long as the sensible regulations are followed, such as safely operating vehicle inspections and moving violation enforcements.

And... does CTA pay out for everybody injured or attacked in their vehicles??? Rather than excess insurance, perhaps common contract law provides a better solution.

Fourth, licensees have to attend city college courses. The whole idea behind share taxis for the south side is that barriers to entry are low. See above about insulting peoples' ability to choose for themselves to board a bus with a driver with no moving violations but no city college courses.

Even more troubling, the commissioner has future authority to regulate the industry to death just as with taxis. Minimum fuel efficiencies, maximum vehicle ages, mandatory fare levels, requirements that seats be plush leather, mandates on one air freshener per square foot of interior space, etc. This introduces very high risks of future increasing costs and may stifle entrepreneurial activity. Let's take two of these. Mandatory fare levels provide the capability for the city to set a price floor at the same level as CTA fare, effectively banning pricing competition. Maximum vehicle ages have no discernible purpose other than to destroy the private entrepreneur's ability to enter the market by himself.  They merely raise the barrier to entry and prevent competing bus services from ever setting up shop.

These possible future regulations do two things – they provide flexibility for further insulating the current transportation system from the possibility of future competition, and they therefore limit choice. They exhibit a lack of trust in people to make up their own minds about what the trade off ought to be between effective transportation and their own quality standards. They limit the choice of entrepreneurs to provide a service that people may want, and to make their own choices in pursuit of the public's preference.


The bottom line is that raising barriers to entry and introducing uncertainty in future regulation will prevent any of the bustling local transportation competition from ever appearing. The private system, with the advantages described above, has been singled out because it has the potential to out compete in these ways. Ensuring it never does also ensures there is no incentive for it ever to exist.

What the public should ask itself is this: would it prefer to be able to make the choice to use more effective transportation that is necessarily different in its offerings than the CTA?

Nevertheless, at least share taxis have entered the conversation. Lower insurance requirements for vehicles above 7 passengers, get rid of college courses as a licensing requirement, and remove the uncertainty about possible future onerous regulations (including allowing wide latitude for vehicle types so long as they operate safely), and then Chicago would see a spontaneous explosion of bottom up transportation solutions all over underserved areas of the city.

Leave a comment