Public Transport and Capitalism: The Perfect Pairing

It is often said that a Developed Nation is one, not where the poor can drive their own cars, but the rich take Public Transport.

Public Transport, for a long time has been associated with Socialism. However, that isn’t always the case. Efficient Public Transport, along with its parent field of Transport tilts heavily towards Capitalist tendencies.

Let us examine the connection between the two and try and make some sense of the two.

Premise

Let us create a premise in order to go forward with this piece.

I’m defining capitalism as an environment, where anyone, be it an individual or a group of individuals, put in the capital, aka the investment, and earn their returns on it, in the process, employing others to operate the investment. A simple example of Capitalism would be if me and my friend invested in setting up a simple shop selling provisions to the people in a locality. We invest, operate the shop, maybe on our own, or if it is a larger one, employing a few other people, and earn back our investment over a period of time. Now, in the transport scenario, the simplest example of Capitalism would be:

A two-laned road exists from point A to point B. Traffic on this stretch is slowly increasing and the government decides that the road needs to be widened to four lanes, but doesn’t have the money to do so. It ropes in a private player who invests in the construction of the road, maintenance and operation of emergency services for a certain time period and collection of toll in the same time period. The concessionaire [I refrain from using the term Toll Operator or Contractor here] has to make up the cost of investment as well as make profits in order to pay its employees within this time period, known as the Concession Period, thus making it imperative for them to treat it as a business and not Social Service or Charity. Of course, if a company is unable to break even [forget earning profits], the quality of its services are bound to tank, right?

Equipment

The first major connection between Public Transport and Capitalism is equipment. By equipment, I’m opening a broad tent to fit in anything from Buses to Trucks to Earthmovers to Dumpers to Road Rollers to Concrete Mixers to Electric Cabling to Railway Tracks.

Let us take BEST as an example. Without capitalism, BEST wouldn’t be able to buy a Tata Starbus, or a Cerita or an Ashok Leyland, let alone a Volvo, because these vehicles wouldn’t exist. Can one imaging traveling from Andheri to Ghatkopar in an ICF Coach like the ones running on the Suburban Line? [I’m sure people from Calcutta are right now sulking.] Heck, even the printers used to print tickets by IR are TVS Dot Matrix printers, another private enterprise! Even the signals used by IR are made in Pune by a firm called PaisaFund, which operates out of Lakshmi Road. Imagine, if all buses were built by a state organisation. They’d be in bad condition, take ages to get delivered, and servicing them would mean that the bus would be off the road for god knows how many months.  Capitalism is what enables a Transport Corporation to purchase good quality equipment, at the best prices for that particular piece of equipment.

Operations

Another important point that links Capitalism and Public Transport is Operations. Operations involves private entities operating a service on behalf of the government. A simple example would be the earlier mentioned example on a Toll Road.

What all can be mentioned under Operations? A lot!

In the cities of Surat, Ahmedabad, and Nagpur, a Special Purpose Vehicle [SPV] was set up by the Municipal Corporation to operate city buses. These buses were owned and operated by Private Agencies under the Municipal name. Of course, buses under JnNURM were always owned and operated by the Government entity due to restrictions by the Central Government.

However, take a look at Delhi. Delhi is currently an interesting example of Private parties operating buses, both regulated and unregulated. Earlier, the killer Blueline buses were an example of how an inefficient government transport fleet wsa supplemented by private providers, although they were running amok killing people on the streets. The government changed the model to make it safer, ensure that operators have the basic minimum safety requirement buses and viola! You have the Cluster Buses. They don’t kill people like their older siblings, but they do their job of keeping Delhi running during troubled times such as the Odd-Even mela.

Privatised operations, too a certain extent also help in healthy competition that allows Transport bodies to understand their organisation and management skills. An example:
MSRTC has run their Shivneri and Ashwamedh on various long distance routes, including Mumbai-Bengaluru and Mumbai-Hyderabad. Both were subsequently scrapped. Why? ST couldn’t live up to the competition that private players and neighbouring STUs like KSRTC and TSRTC were offering. Hence, it decided to refocus its buses on the routes it does the best in: Mumbai-Pune with more diversified routes, such as to Hinjewadi and Mantralaya. Similarly, they had to pull out of their Shivneri Corporate service, because they couldn’t compete with BEST’s A77Express.

Recently, the government announced that it would amend the Motor Vehicles Act of 1988 to enable Private Players to get into Public Transport. This would make it better for corporations that are inefficient to curtail their loss making services and hand them over to a private player. It would also reduce inefficiency caused by labour unions.

Right to Choose

The most important aspect of Capitalism in Public Transport is that it gives me the right to choose. The right to choose whether I want to go to my destination by train or to drive there. If I want to go from Four Bungalows in Andheri to IIT Powai in Mumbai, I can choose to drive, take a 425, take an AS422, take a Metro to Saki Naka and a bus, or take an Auto, Taxi or an Ola/Uber. Why must I have only one way to travel?  If I have to travel from Kovaipudur to Gandhipuram in Coimbatore, I can take a bus, either via Ukkadam or via Perur. Till recently, there was no alternative. Autos are not metered and there are no proper cabs. Calling a Red Taxi or a Go Taxi would cost a lot and an auto, too much. Now, there options such as Makkal Auto and Ola/Uber which make travel affordable and comfortable.

These three are the most important connections that Capitalism has to Public Transport. Private Players, as long as they are answerable to a Government body, implement things faster, finish work faster, operate more efficiently, because efficiency is a direct indicator of income in the long run.

Public Transport and Capitalism: Made for Each Other Click To Tweet

Have anything to add, feel free to drop a line in the comments.

Note, a partial follow-up was written by me for Swarajya Magazine:

Karnataka: Govt Wants To Nationalise All Bus Routes. Here’s Why It Is A Bad Idea

831 total views, 3 views today

Flattr this!

Author: Srikanth

BEST? Bus! Vroom, *pulls bellpull* Hi, I'm Srikanth. I'm a freelance media fellow with a fascination for buses, toll plazas, fire trucks and drones.

9 thoughts on “Public Transport and Capitalism: The Perfect Pairing”

  1. Without capitalism, BEST wouldn’t be able to buy a Tata Starbus, or a Cerita or an Ashok Leyland, let alone a Volvo, because these vehicles wouldn’t exist.
    Sharing the load may be ? TSRTC and APSRTC build at least 80% of their low-end buses on their own. They overhaul their own non-ac buses and they have grown up to build their own super luxury buses. Isn’t this a success story ?

    Recently, the government announced that it would amend the Motor Vehicles Act of 1988 to enable Private Players to get into Public Transport. This would make it better for corporations that are inefficient to curtail their loss making services and hand them over to a private player.
    NO !! The changes to MV act will not help the corporations in any way. Corporations will be the worst affected by these changes. Would railways give up on profit making cargo because the market needs to be open ? Corporations in ap and ts are surviving only because the high end – high frequency services give them more epk than cpk . This cash helps them operate buses (atleast the dying ones) to remore villages. This also helps them keep the fares ridiculosly low at 55p/km.
    Why are the corporations so ineffecient ? Let them function as proper “corporations” first. Why is that the chairman of road transport corporations is always some random dude looking to stay in public life. Why are the corporations forced to operate on obviously loss making routes ? Why is there no effort in creating alternative revenue sources. Just look around and soak in the awesome network they have built over 60 years. Don’t they deserve more love.

    It would also reduce inefficiency caused by labour unions.
    No, There is little evidence that labour unions cause inefficiency. I believe labour unions are the best when it comes to save the integrity of corporations. In early 2000’s when aprtc was going in to oblivion with heavy burden of loans and financial mis management, the labour unions went on strike and fought for the wellbeing of the corporation. It is because of their valiant efforts that today the state government is reimbursing the corporation money lost because of the subsidies.

    Finally, any amount of privatization within the corporations is not helpful for them. For example, TSRTC has stopped hiring people in the shramik cadre who are supposed to do jobs like cleaning, diesel top up and other little jobs. They are outsourcing these jobs instead. There have been cpmplaints of contractors usurping the funds supposed to be disbursed to the employees, false entries in registers and so on !! I dont think the market is ready for this yet. Hire buses, there are numerous cases where hire bus drivers over speed and cause accidents because they are subjected to unreasonable working hours. There are a lot of glitches out there and the top down approach of opening up the market will cause great problems. Hope you understand this !

    1. Hello,

      You are wrong on all counts. All of them.

      The MV amendment is NOT supposed to help corporations. It is to help commuters and enable proper allocation of scarce resources to increase economic efficiency and thus increase consumer welfare.

      Labor Unions do reduce efficiency. The evidence for the same is tremendously huge. You wont find it in EPW though.

      Privatization is different from contracting. Contracting by PSEs still suffer due to structural inefficiencies in PSE functioning.

      Do read up.

  2. Well said. If you can pay extra for an auto, and are willing to pay for Uber surge prices, why not for transportation?
    If there are four people selling coconut milk on the street, they’ll all have minimum prices to attract customers. But if one day, only one of them is present, prices will go up. If you are willing to shell out for that, then you are already subscribing to capitalism.

    1. True that. Even Khadi is capitalism. The intent here is too help the commuters and not the corporation alone.

  3. Completely agree. Without Capitalism, would you BEST or BMTC be able to implement their ITS?
    The agreement with Trimax is a Private-Public Participation. Trimax supplies equipment, cards, machines, trains the staff and earns a percentage of tickets sold.

Leave a Reply

Your email address will not be published. Required fields are marked *