I really think Mr. Vegter is confused about a number of topics, and it is difficult to not get into a position of pointing out where he outwardly contradicts himself.
In opening paragraph, the statement is made “[p]ublic mass transit has rarely been a profitable proposition”. It’s not clear under what circumstances Mr. Vegter believes that public mass transit is supposed to be a profitable proposition, or that the purpose of public mass transit is about generating a profit. This confusion continues “and almost always, the taxpayer foots the bill for a constant drain on the public purse” and “[g]overnments around the world sink billions into their favourite transport systems” as though we’re talking about some kind of glory projected initiated by the CEO or Board of Directors of a company, and as though we were not talking about an entity, government, a large part of whose function is elements such as providing public transport to everyone, and all the downstream benefits that public transport brings to everyone citizen – there is a reality that citizens, actually people irregardless of their citizenship status, are entitled to the social, economic, cultural and so forth downstream benefits that transport provides and therefore have a right to public transport, and it is largely the function of governments to exercise, enable and move forward people’s rights and access to socio-economic opportunity. The fact that the ‘taxpayer’ (a nebulous concept, incidentally) ‘foots the bill’ is neither here nor there. The problem with arguing in this fashion, is that a number of arguments get put forward, none of them concretely, and none of them in anything like an organized fashion. Here are some of the arguments being made:
- That public mass transit cannot (except rare instances) be made profitable: the underlying premise being that public mass transit should be operated on a profit-basis.
- That public mass transit is only justifiable if it is operated on the basis that it is profitable: the underlying, broader principle, being that systems – in particular transport systems – are only justifiable in planning and implementation, if they are able to generate a profit, and non-profitable planning and implementation should not be sought on the basis of its profitability.
- That propositions in terms of operations such as public mass transit must be justified to the taxpayer in terms of what they pay: the underlying broader premise being that because taxpayers, in virtue of the fact that they pay taxes, and on that basis alone, are entitled to a determination of what government should be spending or investing money into.
No doubt Mr. Vegter will not take issue with the premises as stated, although I suspect, coming from a sort of neo-liberalistic human-rights based orientation there may be some argument as to the nature of the premises that he is suppressing or using to formulate his arguments. In particular, the underlying premise of (3) above is particularly hard to square with any kind of rights-based language.
“In his article, he answered his own question: “Projected operational shortfalls of urban transport networks are well in excess of what most cities can afford”
One becomes very confused because this is not the conclusion that Ghalieb Dawood was making in general, and not certainly not what the conclusion he was drawing specifically. It’s as if Dawood’s words are being read with a specific view towards drawing a conclusion that has already been found, i.e. that public mass transit doesn’t get done right. Dawood’s words are somehow, in this context, holy writ to the effect of that conclusion. Let’s offer at least one opposing idea: perhaps, and in the context of what Dawood was actually stating, the conclusions that he was drawing, and without quoting him out of context and turn, what this statement does tell us is that (firstly) there is a financial funding problem with urban transport networks in the country, and that (secondly) there needs to be an operational readjustment, additional financing or the running of a financial reorganization process and (thirdly) that metropolitan’s cannot be expected to carry the operational burdens present because of urban transport networks, largely because, at present, the operational shortfall exceeds their ability to pay. It is difficult to see how these sorts of conclusions, which Dawood was himself drawing, can be turned into a complete repudiation of the system of public mass transit and the current models used.
“Clearly, then, we are not getting public transport right. A system that is a constant drain on the public purse, to the extent that it becomes unaffordable, is one that will inevitably decay and, if not bailed out, collapse.”
There are several problems here – let’s try to organize them and run through them:
- The reasoning that because there is an operational shortfall that the cities/ metropolitan’s exceeds their affordability with regard to public transport is somehow directly translatable into a statement that the entire public transport system is not workable, is problematic and it’s a non sequitur.
- There is a confusion here about what is meant by the ‘public purse’: are we talking about treasury? The fiscus? Are we separating out the metropolitan urban transport budgets, from the metropolitan budgets, from provincial budgets from the national budget? In what sense does all public transport get lumped together in this fashion? In what sense do we make statements to the effect that the ‘public purse’ is a big cash register of kinds in the government store? There is an additional confusion here about the fact that there seems to be some idea that government is some kind of super-consumer, supported by the household of taxpayers, that is charged with purchasing goods, services and utilities for this household, by itself and so forth. This is very simplistic economical understanding: government is not a consumer, or a household or anything of the kind. This kind of simplistic economical reasoning is not applicable to governments.
- There is a problem here with the argument that if something is a ‘constant drain’ to the extent that it ‘becomes unafffordable’ then it will ‘inevitably decay’ and ‘collapse’. The issue that public transport represents what Mr. Vegter’s calls a ‘drain’ is neither here nor there and misses the point. The affordability of public transport is not the underlying rationale underlying the provision of public transport, and really it shows a failure to understand the role of government: government is not here to provide public transport on the basis of its affordability, which is again a completely moot point. Further to this, public transport is not a massive edifice, or building of some kind, but something that evolves, changes and requires constant funding and financing, ‘drained’ from the ‘public purse’. There is never going to be a scenario where public transport is not required to be funded on an ongoing basis, i.e. that it is never not a ‘drain’.
- There is some equivocation here between the outlay costs of public transport, which are enormous, and between the operational costs of public transport, and there is some misunderstanding about how government budgeting takes place, how finance cycles work and so forth. At the time of implementation of the urban transport networks, notably the IRPTN systems, these systems were met a test for affordability that did assume that there would not be economic shrinkage, that there would be fewer divergences from and strains on treasury then we have experienced in the last few years, that a corporatization in management style would affect affordability positively, that tendering out most aspects of the urban transport networks to private enterprise would result in more positive affordability for these networks, and that the systems would have been built and implemented quicker than they have been. There has been economic shrinkage, treasury has become exceptionally strained and there has been no significant increase in the underlying revenue base for government since at least 2012, the corporatized public-management system put in place has not worked and has largely resulted in an explosion of corrupt activities (notably at PRASA), tendering has only served to escalate the costs incurred in running urban transport networks and there is an established pattern of collusive activities and actions on the part of corporate entities (least to say that there has been a system of monopolization put at work by these corporate entities), and finally, tendering out the building and implementation of urban transport networks has escalated the costs dramatically. It would be interesting to see what the result would be if government had been more interventionist with regard to the planning and implementation of these urban transport networks, if there was a more nuanced public administrative position taken with regard to the networks, and if corporates and private enterprise had been kept out of the process altogether.
“South African Airways is an infamous example. It extracts billions of rand in bailouts from government every few years. In return, we get an airline that has unaffordable fares on monopoly routes, and predatory fares on competitive routes in order to force out private rivals. Many valiant airlines have tried to offer better and cheaper services, but not being supported by lavish taxpayer bailouts, most have failed: 1Time, Flitestar, Nationwide, Sun Air, Velvet Sky.”
It is quite telling that SAA is always the example used in these sort of arguments, mainly because there is a very clear understanding that SAA is problematic. It’s interesting though that issues such as restructured loans, etc. are called ‘bailouts’, without there being an understanding that we’re talking about one aspect of overall government organization not only meeting general governmental responsibility and obligations with regard to ensuring the financial stability of internal enterprise, that purely in the name of credit viability and raising credit at any other point, government must ‘bailout’ such enterprises, and that the word ‘bailout’ completely misconstrues what is happening, as it is suggestive of paying out money because an enterprise failed to exercise complete financial diligence, instead of looking at SAA as what it is. SAA is not indicative of public transport, and is not indicative of urban transport networks. It is difficult to understand how one jumps around like this, making a set of unsupported claims, then jumping to SAA which is not part of the picture. SAA was never meant to be affordable or profitable, and the issue is that a large part of why SAA is kept functional is to ensure that there is a national air passenger carrier. In some respects it could even be regarded as a vanity project on the part of government in the name of creating a national identity and a ‘national image’, which of course, is an important part of issues that Mr. Vegter surely takes importantly like Foreign Direct Investment flows, which are affected by the image a country projects (which does undercut the argument that SAA is purely a vanity project). If we are going to say that the fares are unaffordable, what it is the basis for making such a statement? Unaffordable compared to what? If it is unaffordable, the argument isn’t clear: it’s unaffordable because it extracts ‘bailouts’ from government? What isn’t being addressed is that running on many of these ‘monopoly’ routes is simply not, and never going to be, affordable or profitable. If one talks about transport then one has to address a demand and supply side orientated form of transport. The issue here is not that SAA is unprofitable because it crowds out competition, or because it gets bailouts, but simply because it is operating in conditions in which it would never be profitable or affordable. If there was such a clear distinction between this completely inept and non-functional state entity and private competition, and private competition could operate these routes more effectively the profit and affordability margin would be great enough, if there is a point here, to entice and create competition. It’s not possible under current operating conditions to create this idealized competitive air passenger transport sector in South Africa, it has been tried and it has been a failure, and it’s unlikely to work. There’s also an issue here: SAA has unaffordable fares and yet predatory fares, and I do understand we’re talking about monopoly versus competitive routes, yet it’s not clear how this is actually the case. SAA operates on a fairly standard set of rates that are comparable route to route: the actual per-km fare from Johannesburg to Cape Town is within the same region of the actual per-km fare on, say, East London to Port Elizabeth. It’s not entirely clear here how some fares unaffordable and some are predatory. It’s also not clear who these private rivals are: the only comparable airline that operates in South Africa is British Airways and their associated brands, who operate under the same sort of regime as SAA in terms of their relationship to government. In fact, this national carrier and what Mr. Vegter mistakenly sees as monopolization is in fact a generally condition of how the international airline operates. With the exception of the United States, there are no private rivals to speak of in almost any airline sector anywhere. It’s not even clear what is meant by a competitive route within the context of a discussion on airline routes. Even to engage in this kind of argument is to suspend or ignore the fact that airlines are not meant to operate within the bounds of a profitability or affordability framework, that fulfilling the mandate inherent within the operation of these sorts of carriers inevitably leads to a ‘drain’ and ‘bailouts’ (it sits squarely within the preconditions of these sorts of operations), and the flat ignorance of the reality that there the problematic status of SAA is more tied into its management and operational issues.
I don’t understand how an airline competing against a national carrier, such as SAA, becomes ‘valiant’. By virtue of what? It’s valiant because it’s competing against something which isn’t supposed to be, or meant to be, held in a state of competition? One might say, ‘foolhardy’ instead of ‘valiantly’. It should also be made clear that these operations didn’t fail because they lacked government ‘bailouts’ but because they couldn’t compete in and of themselves. 1Time had planes that were falling apart, that, at one stage, could not get off the runway. The airlines discussed here actually operated on some of these ‘monopoly’ routes that Mr. Vegter talks about, and were unable to generate a profit.
“It is no different when governments or municipalities try to implement rail or bus networks. Most major international public mass transit systems do not run at a profit, and are heavily dependent on public funding. Meanwhile, they crowd out private competition.”
This paragraphs contains some of the most outrageous examples of the fallacy of equivocation at operation. ‘It is no different’ although there is almost every difference between SAA and the methodology and mechanisms under which rail or bus is operated by government and municipality. It is ridiculous to assert a claim regarding SAA and then advance the further claim that, because SAA operates in this conditions, ergo ipso facto, all governments and municipalities operate under the same mechanisms and the same manner as SAA, for a reason and rationale not provided. It is beyond any reasonable method of argument to make the jump that because SAA is problematic that, and that because SAA is a state enterprise, therefore, it runs that all public transport state enterprises are problematic. Note the use of the two suppressed premises here that if one state or government enterprise is problematic, therefore all government or state enterprises are problematic – it’s the same reasoning so that that if part of one apple on a tree is rotten then all the apples on the tree are rotten. The reason why using the logic in this way is that it shows how ridiculous the jump in premises here is. As for the next sentence, this error in understanding gets made again: namely the error that public transport is meant to be a profitable exercise, and the argument that runs behind this one is that ‘taxpayers’ are ‘investing’ in ‘government’ and should receive some sort of ‘dividend’ on their ‘investment’.
It’s as though Mr. Vegter believes that taxpayers are shareholders in government. There are two related lines of belief that are normally associated with this one: firstly, that taxpayers should receive services, goods etc. from government in proportion to the taxes that get paid, and secondly – in a similar fashion – that only taxpayers are entitled to make a determination around how government spends revenue originating from taxation.
Equally obnoxious is the line of reasoning that fiscal spending from government onto public transport somehow ‘crowds’ out competition, when in fact public transportation is not a sector that should be orientated and geared towards the market. It’s not clear from Mr. Vegter’s line of reasoning why public transport, in particular, should be subjected to competition and market forces. The argument that he seems to make is that:
- Taxpayers should get value for their taxes in a direct manner;
- That public transportation is a service offered that provides real value, both in terms of its own tangible value provision and its downstream value adding;
- That whenever money is being provided to a service provider, those providing the money should see the maximum return on what is argued to be an investment;
- Putting (1), (2) and (3) together, we get to the conclusion that because public transportation is a service and that taxpayers are providing the investment for that service, it should be as profitable as possible;
- Competition as a particular form of economic activity is what generates the most effective set of conditions under which the greatest profit for investors can be obtained;
- Therefore from (4) and (5), it follows that public transportation should be opened to competition in order to maximize profitability for the taxpayer.
We should also add the following premise in support of the above:
- There are a number of private operations within the public sector transportation, so the leap towards privatizing the entire public transport sector is not to radically different from how certain sections of the public transport sector operate.
The problem here, is that if we apply this faulty reasoning elsewhere we run into what seem like crazy contradictions. Consider private security companies and the safety and security cluster: going through this argument, and assuming that its valid, leads us into a position where we would have to privatize the South African Police Service and the Metropolitan Police, ensure that the services they provide are open to competition, and maximize the profitability of enterprises concerned. This is of course a ridiculous conclusion, but the conclusion is reached at using the same form of argument and the same type of reasoning.
“Perhaps the most famous exception to the rule is the Hong Kong subway system, which turns a profit of $2-billion per year. However, this profit is built on an egregious subsidy from its majority owner, the government, in the form of free land. It receives parcels of land to build its stations and then has the right to develop the property above and around these stations. This makes the operator a major property developer with a competitive advantage that nobody can match. The subway system really acts as a loss leader for the profitable business of running malls and skyscrapers”
This is perhaps one of the most confused paragraphs in this article. The exception to the rule which was established in the previous paragraph is the Hong Kong Subway System, but, on closer inspection, it actually is subsidized, and thus doesn’t actually support the claim Mr. Vegter is putting forward. Making this sort of shaky argument that the subway system becomes profitable because of real estate development and effective land management is to miss the point: he was talking here about public transport. If we’re going to talk about introducing elements in this fashion around public transport, we can immediately pull out several local, South African examples, which are exceptions to Mr. Vegter’s rule: Intersite, a division of PRASA, carries an enormous operational surplus off land developed and managed by Intersite on behalf of PRASA – by extension of Mr. Vegter’s argument, PRASA (and by extension Metrorail) are exceptions to the rule. The various BRT systems, which form part of the IRTPN networks, in a similar fashion operate with operational surpluses once one takes into consideration the real property development and management associated with these public transport networks. So they are also exceptions. In fact, if we balance ACSA with SAA, we get the same conclusion that SAA is an exception to this rule. This rule is looking very shaky. Moreover, Mr. Vegter is a making a different argument here that before, and his argument is really one of two arguments: either he’s claiming that public transportation is a loss leader for real estate development, or that public transport cannot work without real estate development.
“Worldwide, there has been a fever for building new mass transit systems among those who advocate a “new urbanism” to combat sprawl and reduce pollution. Everywhere, their ideas appeal to politicians and their corporate cronies who have never been able to say no to multibillion dollar gravy trains.”
There is no justifiable evidence for this statement. New urbanism is a very old school of thought, which grew out of the 1960s. The model used in South Africa for the new BRT systems follows that of the Curitiba/Bogota model, which was built in the 1970s. It is also fallacious to argue that the reason that the building of new transit systems is taking place, and that they appeal to politicians is because they constitute ‘multibillion dollar gravy trains’. Let’s provide Mr. Vegter with some historical context:
- The last mass public transport system built in South Africa was in the 1970s and constitutes what is today Metrorail. That system had, as of 2010, never been upgraded. The system had been built when entrenched Apartheid patterns of landuse were operation, and the primary purpose of the system built was to move workers into mining operations, industry and so forth, and then to move them out of the metropolitan areas as quickly as possible. There has been no major overhaul of the rail system to date, with the exclusion of the creation of vanity project stations for the 2010 FIFA World Cup. Most of the rolling stock, previously operated by SARCC, still uses a vacuum-breaking system, nearly half of the rolling stock is no longer operationally functional and the entire system is at the moment falling apart.
- The major bus systems, such as PUTCO, Metrobus and Golden Arrow, were developed in the late 1980s when it was clear that the train rail system was not covering, and was no longer adequate to the areas it needed to cover in terms of its feeder routes and its delivery. But again, it was developed along entrenched Apartheid landuse patterns, and its primary purpose was to move workers out of and into very specific industrial operations. Beyond the purchasing of new road stock (e.g. busses) these systems have not, at the time of writing, been upgraded comprehensively.
These systems were not built in the name of providing a public transport service offering in any way: they were conveyor belts for moving black labour into and out of the sites were that labour was exercised, and became necessary because spatial architecture of metropolitans and the country was reconceived and rebuilt in such a manner that black labour was kept distinct and separate from the areas where the ruling white elite lived, and worked, in addition to being kept distinct and alienated from the sites where their labour was utilized. To continue:
- The IRPTN’s were conceived as an attempt to provide a suitable public transport system on an equitable basis that did not treat transportation as a mere mechanism for the operation of moving labour for the purposes of satisfying the needs of large financial and industrial concerns. Due to the good urban road system that had been built in the 1970s and 1980s in most of the cities, the BRT model was selected over rail transport, as it was – and the calculations showed – would be more cost-effective. This took place, however, in a context in which there was to a sustained upgrading of the rail system.
I will talk on the mini-bus taxi industry later.
It is simply untrue to state that the implementation of mass transit systems is a new phenomenon (it’s not) driven by New Urbanism (which is a dead concept), in the name of reducing pollution and reducing sprawl (this are important considerations, but not the only considerations, and they certainly are not the most important considerations).
“Many successful public transit systems developed long ago, in symbiosis with the cities they served. They allowed workers to live closer to the country where the air was clearer and property was cheaper, while still being able to commute to work in the city. They supported property development along their routes, or did the property development themselves.”
There’s no context to any of these statements – which public transit systems are being talked about? What is the benchmark that Mr. Vegter is using? If he’s talking about public transit systems in South Africa, he’s completely mistaken as the older public transit systems were not designed in symbiosis with the cities, but in symbiosis with the needs of big capital. And the starry-eyed statement about workers being able to live in the country is ridiculous: what place is Mr. Vegter talking about – worker’s cannot afford to live in the ‘country’. Since the advent of the industrial revolution, worker’s have lived in cities, and often in the worst areas of cities if we use metrics such as air quality and property prices. Further, brutally, property development is beside the point and has nothing to do with public transport per se, except to utilize in some poorly thought through argument to the effect that it makes public transport more profitable.
“But governments could not leave well alone. They began to regulate public transit fares, and soon forced operators into bankruptcy. Most public transit systems ended up heavily subsidised or taken over by governments entirely.”
Now we have more children’s book narration. Every public transit system built in the last hundred years has been built and regulated by governments. The purpose of regulating public transit fares is not to drive operators into bankruptcy: it’s protect the public from predation by operators, its to ensure equitable access to the public transport service offering and the downstream, socio-economic and other forms of beneficiation it offers, it is stabilize pricing, and the demand/supply side equation, it makes long-term planning with regard to public transportation possible and its serves to operationally rationalize public transport. It is also not clear how governments regulating public transit fares leads operators into financial difficulties: that hasn’t been demonstrated in any way, and it is simply incorrect to assume that it’s a fact in the absence of any factual evidence. There is also a loop in the thinking here – one moment Mr. Vegter is saying that big bad government came along and regulated operators into bankruptcy because they were doing such a good job and it was regulation alone that brought them down; then Mr. Vegter says public transportation systems ended being subsidized or taken over by government, but then the question is how – what operational rationalization is there for government to pour subsidies into an industry unless those subsidies become needed or required – to put it in Mr. Vegter’s language, the operator’s required a ‘bailout’ in the form of subsidization? There’s a contradiction, unless the argument is that operators were regulated (and here regulation would be a compulsion to do something) into taking subsidies, which was then tanked them. It’s completely circuitous logic.
“Tacking a public mass transit system on to an existing city that developed without this symbiotic relationship is even more difficult than allowing a private system to develop and then annexing it to the government.”
What symbiotic relationship? And how exactly is engineering a solution that is specific to the problem, can be implemented on a large scale, has massive political will and public support driving it, is designed to have long-term sustainability, that is designed to build in further growth somehow less of an option that allowing a system that developed, because there was a lack of service provision, and that runs according to the dictates of who has money and where people are going to, wasn’t really developed, and constitutes an ad-hoc set of enterprises that were created reactively to urban development? The statement becomes even more bizarre when we just settle it onto the South African circumstances: rather than have a properly planned, design and engineered system grafted into an urban environment that has been developed to speak to that urban environment, especially in a country where public transportation has been geared towards the concerns of big financial, mining and industrial concerns, where private industry, such as the taxi industry, replicate those patterns of transport delivery, it is simply better to not address how public transport should work, that it is a powerful vehicle for re-shaping the economic, social and cultural landscape to maximize the dignity and rights of South Africans, and rather cleave to a solution that is fundamentally reactive in nature, is completely demand-side driven, which is subject to market fluctuations, that is not sustainable, that does not address people’s needs in an equitable fashion and so forth.
“Dawood mentions a common problem: transport distances in typical South African cities are long, especially between working-class townships and employment in the industrial or commercial hubs of cities. And because our cities did not develop around public transit corridors, in between there’s nothing worth stopping for.”
Mr. Vegter is missing the point here: the reason why public transport systems at the present time in South Africa run such high operational running costs is because of the reinforced spatial layout that the cities developed under Apartheid, which creates the long commuting times.
“To solve this problem, Dawood proposes “transit-oriented development” which would “create land use patterns that are able to drive a more sustainable demand for transport”. But that is absurdly ambitious. Redesigning cities, shuffling factories, offices, shops and residents around to better suit public transit would be an insanely expensive and disruptive undertaking. One might hope such a reorganisation would eventually happen organically, but if precipitating such a radical transformation in the short term is the price for effective mass transit, we will not have it for many decades to come”
Mr. Vegter seems to be living in some sort of bubble to believe that industry and commerce will naturally, organically, move in such a way that they will effectively reorientate towards the needs of workers and their long traveling times, is what is absurd. We come from a regime of a very particular form of spatial layout, that, despite extensive efforts, has largely remained unchanged. There is also strawmanning occurring here – no-one is talking about a radical, revolution in which transit-oriented development will take place tomorrow. It’s a formulation, an idea, about how development should have happened, and how it developed should be regeared in future. By emphasizing and support transit-orientated development, organic growth of the kind Mr. Vegter talks about, is what will happen in a gradualist manner. No one is talking about short-term transformation.
“Dawood cites other problems with new public transit systems. The government mandates requirements for buses and trains that make them very expensive. It also mandates low ticket prices, which improve affordability to the public, but makes these services hard for private contractors to operate profitably. This leads to operational cost shortfalls which inevitably get dumped upon the taxpayer.”
The government mandates that Dawood discusses are largely concerned with ensuring public safety. Which is perhaps an area that should be focused on. The second argument here, that ticket prices should be benched according to what becomes profitable for private operators, missing the point – again – about what public transportation is for. The operative word is ‘public’: public transport needs to be fairly available and accessible for the public. Whether it makes operating conditions difficult for private contractors is completely irrelevant. As for this idea of anything being dumped on the taxpayer, since 1994 government and parliament have never gone back to treasury to ask for further taxes to be levied to support operational cost shortfalls on public transportation. So how this is getting ‘dumped’ on the taxpayer is not clear, and it’s not true. Again this is the sort of stupid block-headed thinking that sees government as some sort of corporate entity and taxpayers as being shareholders. It’s also blatantly untrue.
“Low ticket prices have another effect: undermining the incredibly successful private taxi industry, which has been ferrying poor people between townships and jobs since apartheid first declared blacks to be third-class citizens and dumped them in the sticks without transport. It will also undermine metered taxis, and ride-sharing services such as Uber and Lyft which are rapidly increasing in popularity because they better meet the market’s needs. One might have an ideological or public planning preference for mass transit, but it isn’t right to use government force to destroy private businesses that were built with blood, sweat and tears, and sustain many workers and their families.”
There’s a big problem here: the ‘private taxi industry’ is heavily subsidized by government, and would not be able to operate without these subsidies. Let me remind the reader that the Toyota Quantum’s that have become such an integral part of what we now view as the mini-bus taxi industry were and are almost completely paid and subsidized by government. It’s incredibly successful because it’s such a heavily subsidized section of public transport. Not only that, but the mini-bus taxi industry does not operate, as a matter of course, in direct competition with rail and bus, but has become so successful by operating as a complementary service offering and on feeder routes to major bus and rail routes. This completely blows the argument that low ticket prices affect the taxi industry, not to mention that the fact that low ticket prices have a been a reality since these public transit systems were built, and the taxi industry has not been severely affected: one only has to use Rea Vaya as an example here. Uber and Lyft are successful because they meet a very specific market need, and there is no way that they could substitute for public mass transport: it’s an unthinkable line of reasoning, and it’s not clear how and why it gets introduced. Mr. Vegter needs to back up his statements here, that ‘government force’ has been used to ‘destroy private businesses’: give some examples. Show a consistent pattern. Show a causal, or at least a correlative link. It is doubtful that you will find one. “Blood, sweat and tears” is very melodramatic, and really is nothing about nothing, and is an attempt to utilize emotional arguments to substitute for intellectual and rational arguments. The last statement is also extremely misleading: mass public transport provides work to more workers than private transportation does, it moves more people into their places of employment, and creates a downstream valuation and beneficiation effect. Finally, it is not a question of ideological or public planning preference – this is also a complete non sequitur and it is misleading.
“Low fares for urban mass transit systems are designed to enable buses or trains to undercut minibus taxis, just as SAA exploits government subsidies to undercut its rivals. Yet Dawood notes: “Poor regulation and inadequate law enforcement allow illegal competition to undermine the urban transport system.” // In his eyes, private operators are the villains. But why should it be illegal for anyone to provide a transport service, provided that their vehicle is safe and their competence is assured? Instead of a profitable transport industry driven by entrepreneurs that go where the demand is, mass transit systems give us a loss-making public boondoggle that costs billions, forces customers to go where the supply is, and squashes private competitors like bugs.”
The first sentence here is simply untrue: low fares were not set up to under the minibus taxi industry: in fact, if the reader will recall, the taxi industry associations and the IRPTN and BRT planners spent a considerable amount of time negotiating and found a suitable compromise around fare structuring. Low fares are in place so people can use the public transport systems that we have. It is not a socialist conspiracy. Why the quotation from Dawood is put here is not entirely clear, as what Dawood seems to be suggesting is that further regulation and more adequate law enforcement is required to prevent illegal competition, not the reduction of fares, which undercuts Mr. Vegter’s entire argument here. It’s confusing. Further to this, no-one is villainizing private operators here. Does Mr. Vegter not understand issues such as managing supply-side economics with regard to transportation: that too many operators on a route causes an oversupply which then makes it difficult for private operators to generate a profit, and in turn them causes them to fail? Does Mr. Vegter not understand that there are strong public sector agreements with minibus taxi industry associations around the running of routes, agreements that also bind members to the decisions undertaken on their behalf by the associations, but which also ensure that government is able to effectively and efficiently subsidize this industry to ensure its viability? The illegality is not around whether it is right for someone who has a ‘safe’ vehicle and is ‘competent’ to drive, should be allowed to operate a transport service – that’s a complete misunderstanding of what this ‘illegal’ competition is, and that the provisions for illegal competition were largely put into place in order to ensure the viability and sustainability of the minibus taxi industry. This seems to be a deliberate, willful attempt to misunderstand reality. The last sentence here is more nonsense and non sequiturs, and one can tell it is nonsense by noting the half-backed emotional and adjectival rhetoric utilized – it’s a giveaway. There also a less than basic understanding of how demand and supply economics work: private transportation operators are purely demand driven, whereas the reality is that public mass transportation is designed in such a way that it meets high and middle priority public demand patterns, is sensitive to future developments in such demand patterns, and utilizes supply as a mechanism for achieving a gradualist, reformist change in spatial use patterns.
“Mass transit systems rarely work, even in rich countries. New York, for example, accounts for 40% of all US mass transit trips, despite trillions of dollars having been sunk into transit systems in other US cities. Expanding services, at huge public expense, does not appear to translate to expanding ridership. There is evidently a ceiling on how many people can be tempted onto mass transit. Expanding such systems merely turns them into financial liabilities, and makes any public policy their expansion might theoretically support – such as lower congestion, or lower pollution – unrealisable.”
There’s another area where Mr. Vegter appears to be confused here and that this his understanding that the functionality and effectiveness of public transport is whether or not it is profitable. The equation here is also not as simple as saying that increased financing leads, necessarily to increased ridership. That’s a false argument, and there’s no correlation that can be called upon. It is also telling that Mr. Vegter talks about the US, which has experienced a massive drain of ridership over the last thirty years, peaking about 10 years ago, away from utilizing mass public transportation offerings. There are also other factors at work here. Further, because of the unique circumstances surrounding US metropolitan public transport system implementation and upgrading, one cannot leap and compare, say, the South African situation in the same way. You cannot draw conclusions about how a system works in one country and apply it on the basis that it’s the same sort of system to another country. That’s very faulty reasoning. There’s another piece of reasoning here’s that also very confused: which is the idea that simply because something becomes a financial liability it means that other KPIs are immediately unrealizable, which is not the case. Further to that, why is Mr. Vegter not using any figures or facts here, instead relying on assertations and allegations without providing substance?
“You could argue the same thing for absolutely any government scheme. Consider the impact on the economy of a plan to dig a million holes and fill them in again. Such a project would employ lots of people, both in the digging and manufacturing of digging implements. Their wages in turn are spent on consumer goods and services, which boosts the economy around them. Economists would gleefully add their work to the gross domestic product. Yet they produce nothing of value. All this “economic impact” is just a mirage conjured up by wealth transferred from one group of citizens to another, for no economic benefit at all.”
The one problem here is that public transport and digging holes are not the same kind of thing, and you can’t compare the one with the other. This is a fundamental misunderstanding of what the purpose of public transportation is. The previous paragraph to this, which talks about the impacts of public transport are, is not from a terribly reliable source, is not peer-reviewed, and in any case, like of much Mr. Vegter reads, he reads incorrectly and cherry-picks, out of context and out of order, statements that support his bizarre arguments. In any case his argument about digging holes is completely fallacious: GDP only measures real production, and a million digging holes subsidized by government is not going to ever find its way onto into a GDP calculation.
“Not that the South African government would understand this argument. After all, they require road crews to employ thousands upon thousands of flag-wavers, despite the fact that people are vastly more expensive than flashing warning signs, and produce diddly-squat to justify their wages. If it was up to the government, they would consider the hole-digging project a great success, and would be excited to improve it even further by issuing workers with spoons instead of spades.”
Now, we’re really jumping around and Mr. Vegter is grasping at straws. These road crews that are being talked about, are operated by private enterprises who win tenders, and it is these companies, operating in a competitive environment, who have made a decision to utilize flag wavers and not flashing warning machines. They have obviously done so, because it generates more profitability. So it’s not clear what’s being argued here. Finally, the last sentence is completely asinine and is a cheap shot at a straw man.
“Reading Dawood’s article, it is clear that public mass transit systems in South Africa are unaffordable boondoggles, as they are around the world. And that’s before we even count the cost of all the fruitless and wasteful expenditure, maladministration, corruption or fraud that so often accompanies multibillion rand government projects.”
Frankly, this sort of paragraph is what happens when somebody reads an article such as the one written by Dawood, takes their own twisted and fallacious reasoning, applies, selectively, completely fails to understand what Dawood is actually saying, ignores his conclusions and then draws their own. Not only that, but Mr. Vegter is making much different claims and conclusions than Dawood is, and doesn’t justify them in any way.
The next few paragraphs here are just the kind of clap-trap that one reads throughout this entire article, and demonstrates the conclusions that Mr. Vegter has drawn, which are dubious at best, and supported by weak premises and unsupported and unconvincing arguments. Mr. Vegter, in his concluding paragraph, talks about the fiscal advice provided by the Financial and Fiscal Commission as being ‘inexplicable’ to him: perhaps its inexplicable to him because a very limited understanding of how economics works, how public transport works, is wedded to a neo-liberal agenda and is perhaps not very intelligent.