Saturday, March 14, 2009

private company to shuttle people to Derby this year

From Sheldon Shafer in the C-J...

For the first time in 62 years, a private bus company, Miller Trailways, will shuttle thousands of race fans to Churchill Downs for this year's Kentucky Oaks and Kentucky Derby. And it will charge more to do it.

The Oaks and Derby express service is the first large chunk of business that Miller has wrested from the Transit Authority of River City, after numerous challenges to TARC operations in the wake of federal transit rules that took effect last spring.

Miller will charge $20 for the round-trip service between downtown and Churchill, according to a company brochure, and $15 for the trip to and from Papa John's Cardinal Stadium for both days, and the Kentucky Exposition Center on just Derby Day. TARC charged $10 for all routes....

"It is disappointing that the federal government had to get into this level of regulation," said Barry Barker...

It'd be interesting to know if Barker and supporters of TARC are fans of federal regulation in many other spheres.

Barker said TARC last year made $167,000 in revenue over the two days, weighed against $135,000 in expenses -- including labor, fuel and other costs....

As an economist, I'm attracted to the numbers here-- and the alternatives. Should bus services be public or private? Should one charge $10 or $20? Has Miller picked a better price in terms of profits?

Since TARC is so heavily subsidized, you'd hope that they'd profit-max this event-- to limit the damage done to taxpayers by their service. (One could argue that they should profit-max every event. But the desire to have public transit is not usually based on profit-max and assumes a willingness-- if not an eagerness-- to lose money.)


At March 14, 2009 at 11:11 PM , Blogger Mike Kole said...

Usually, bus systems are subsidized to the tune of about 80% of operating budget. Doubling fares would be a good start for most of them.

They should be private enterprises, in any case.


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