The last few weeks at Cap'n Transit Rides Again and Human Transit have included an interesting discussion on private transit.
I've earlier written on the use of rail as a method for governments to experiment with different types of transit services. I do not mean to advocate the large-scale privatization of transit. For transit to function efficiently, it must function as a cooperative network. But that begs the question: Must the network paths be determined by some sort of central coordinating agency, or can a most-efficient solution emerge from the rough-and-tumble give and take of market competition?
One some level, the network effect is fundamentally valuable, and a private operator would recognize that connections to other transit services is the way to go. In unregulated developing countries, informal 'hubs' for bus, taxi, and jitney operations arise.
On the other hand, private operators don't go where there isn't any money. 'Coverage' services providing essential social services for seniors, the disabled, the young, and the poor... would almost certainly cease to exist. Providing para-transit costs UTA more, on a per-rider basis, then bus, TRAX, or FrontRunner. Largely because Para-transit functions as a sort of specialized taxi. While the price per ride is much higher than a bus ticket, ($4.00) it's still a superior alternative to taking a regular taxi.
Another problem is 'clustering'. Small private operators are bad at providing 'backbone' service, and thus tend to cluster around terminals for other high-volume services. Most taxi operators make their living giving rides to and from the airport, not running people around down-town Salt Lake City. Waiting an hour for the near-certainty of a pick-up at the airport beats out waiting an hour for the hope of a pick-up in downtown.
In New York city, small private jitney operators frequently compete with buses--following established bus routes. On one level, they compete with buses, taking passengers that would otherwise ride the buses. On another level, they act as an unofficial 'frequency boost', adding more vehicles per hour on the route.
For high frequency buses, where passengers arrive at random intervals and expect to be picked up within a reasonable period of time, jitneys would compete with buses. But for less frequent buses (on 1-hour, half-hour or even 20 minute headways), limited privitization of local bus routes would provide a mechanism for agencies to experiment with bus frequency without undertaking any long-term liability.
UTA could 'badge' private providers with licenses to operate along existing UTA routes, with the private providers being allowed to experiment with different schedules (and frequencies) to determine which ones are most effective.