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Investigation shows many complaints for paratransit contractor

A Chi-Town Daily News investigation reports on a boatload of complaints against the new Pace contractor for  paratransit rides on the North Side -- a California-based company named MV Transportation.

You can read the story here.


"One time, on a Saturday morning, they were driving way out of my direction," she says. "I could feel myself getting sick, so I asked them to just take me to Illinois Masonic or take me home, but they said they didn't have enough vehicles. I threw up right outside of Uno's Pizza," she said. "It was so embarrassing."

This happened in Philadelphia: On August 16, 2005, a Philadelphia paratransit driver steered his van off the designated route, parked it, and sat down next to his severely disabled female passenger. The passenger, strapped into a wheelchair, was unable to escape as the driver exposed himself and asked her to perform oral sex, according to court papers.


Oh my GOD! Those stories are terrible. That is completely terrifying.

And there are still people who claim privatization works. Sigh.

To be fair though, how can you keep faulting the company for something that happened years ago and in a different city? I'm sure the person no longer works for them.

Sounds like they suck though. Paratransit is a losing venture anyway. I'm not sure there is a good solution.

How can we keep blaming them? Are you kidding?

You've got a company who's goal it is to take public money, use only part of it to provide a public service, and then pocket as much of what's left as they can. And the more they cut corners, the less they pay their workers, the less professionally they dispatch their public service duties, the more money they get to pocket.

This is the culture of privitization. This is the kind of company that can win the bids. And the people at the top of the company have as much sense of duty to the public as the scum at the bottom who actually generate the complaints. The only difference is the scum at the top can be more eloquent when they mutter their excuses, and promise that they've "fixed" things that are so engrained in their company culture that they never can be "fixed".

They are the face of privitization. Greedy scum sucking at the public teet, and biting while they suck while promising not to bite again.

It's time to get companies like that weened. It's time for us to start protecting our public stream of milk and honey. It's time to get the teeth of scum like that off our public teets.

Rusty, all you're pointing out is that a monopoly is still a monopoly, whether it's run by the government or only enforced by it. Genuine privatization includes direct competition so that the customer has someplace else to take their business if they don't feel they're getting value. This puts the incentives in the proper place.

The reason why a public service is regulated by the public is because economies required for efficent operation can only be achieved without operating competition, and/or the service could never be operated at a profit. The classic example is first class daily mail delivery to some out of the way town in New Mexico or Arizona. You can't expect one company to deliver mail there for 42-cents, let alone have competition.

While paratransit services aren't quite as extreme, they fall into that category as well. You're never going to be able to offer those services if you're depending on a free market to step-up and do so as an unregulated monopoly, let alone in competition.

Privitizing pubic services simply doesn't work because services that need to be public services do not have the dynamics that lend themselves to private operation in the first place.

Add in that most government contracts are awarded only based on who puts in the lowest bid, and cannot take into account any other values, and it should be obvious that the public loses with privitazation.

The question should be should something be privitized or not. The question should be is it a public service, or is it something that shoud be completely operated in the private sector. And paratransit, as well as public transit, fall into the category of public services.

The question then, to Rusty, is why CTA turned its over to private contractors in the 90s (Carole Brown took much pride in pointing that out), Pace always operated with private contractors, and CTA was more than happy to acquiesce in turning over its paratransit responsibility to Pace?

It sure seems that despite the belief that profit is inconsistent with efficiency, the opposite is the case.

If paratransit is now costing $25 per ride, and needs a $100 million earmark off the top of the taxes collected by the RTA, how much would it cost if the normal CTA employee contingent operated it? And haven't there been complaints about the CTA's lack of cleanliness and concern for the customer with regard to its bus and rail operations?

At least here there is competition, in that if MV's performance is unsatisfactory, Arts, CDT, SCR, First, or Veolia are more than willing to step in.

The incidents that they found nationally are unacceptable and no one questions that. But this is a major company with thousands of employees across the country. There are people in every profession that do unspeakable things. I could probably find news stories of dentists that have harmed defenseless patients, should we draw the knee-jerk reaction that all dentists are reckless and harm their patients?
Let's be realistic, the worst incident they could find locally in Chicago is someone that threw up in front of Uno's pizza? I don't mean to minimize her experience if it's true because certainly that's a terrible thing, but it's certainly not on the same level as an alleged rape.

And no matter who steps in to do the job, money is still being siphoned away from service to create profit for a private company's shareholders.

Particularly troubling are privatized services that are performed by private companies using publicly owned assets. At least when a privatized service is perfomed using assets and equipment owned by the company, the shareholders are contributing funding for a capital investment. But when the capital assets are already publicly owned, shareholders are earning obscene profits for essentially doing nothing.

There's nothing wrong with workers being paid for their labors. That's a cost of getting the work done. Creating a profit-making opportunity out of a public service, however, is a drain on our limited resources.

Private contractors who'll do the job for less quite simply are not doing the same job. They can't do the same job for less, and create a profit at the same time. They have no greater ability to create efficiencies than the public body could do wtihout lining some profiteer's pockets.

The only efficiency private contractors can introduce are lower wages for the people actually doing the work. That means instead of your tax dollars staying with local workers who'll spend some of that money locally, workers incomes are cut, and the spoils go to shareholders who are often not local.

Privatization has been the biggest rip-off ever foisted on working taxpayers. The record profits of a few oil companies may be raising more ire, but that pales in comparison to the privatization craze that started in the Nixon years, and reached epic proportions under Reagan.

It's about time we put a stop to it, and let the public start to regain control of public services.

Rusty, whatever profit margin would be sustainable in a privatized, competitive situation, I'd consider well worth the share I'd pay, because what we'd get for it would be a system attuned and responsive to its customers, not bloated, inefficient, surly and wasteful. And it wouldn't take bitching, moaning, hollering, and marching on the state legislature with torches and pitchforks. All it'd take is each of us saying one day, "ehh, I don't like company A so much, I think I'll switch to company B."

And if you are so sure it's not possible because of a technical monopoly situation, I refer you to the discussion of the issue in Chapter 2 of Milton Friedman's Capitalism and Freedom, which includes the following remark: "Henry Simons, observing public regulation of monopoly in the Unites States, found the results so distasteful that he concluded public monopoly would be a lesser evil. Walter Eucken, a noted German liberal, observing public monopoly in German railroads, found the results so distasteful that he concluded public regulation would be a lesser evil. Having learned from both, I reluctantly conclude that, if tolerable, private monopoly may be the least of the evils."

Friedman goes on to point out that times, technology and conditions can change the efficiency picture, and it is important to be open to the possibility and allow attempts at competition. A private monopoly is more likely to do this because it's not being protected by the government from competition, as is a public monopoly or a regulated monopoly.

Just to remind everyone, the paratransit service was not generally thought of as being well-run when it was being operated by the CTA. I seem to remember a fair number of newspaper articles and letters to the editor that involved complaints of very poor service and major inconveinces for the people using it. I'm sure there were complaints when it was being run by Pace as well. So it is pretty silly for people like Bob S. to act as if somehow the fact that there have been some issues with a private company operating it automatically means that privatising these types of things is inferior. The reality is that, whether it is being operated directly by the transit agencies or by a private company, the revenues the very small revenues that are received for the service does not come remoterly close to covering probably even a quarter of the cost. Whenever there is a situation like that there is just no way that it can be operated in a manner where it is convenient and where there are not occasionally some major problems. That's just the way it is. Otherwise you would have to substantually increase the subsidy provided for the service. And that just isn't going to happen because it doesn't make sense for the overwhelming majority of people to dramatically subsidise the small minority who needs the service. Privatisation has nothing to do with it. And it is quite understandable that there may be some problems directly after a transition to a new company. The article seems to indicate that much has already been solved. Yet there are people who are using this to argue against privatisation in general (probably because the have some connection to the labor movement).

I always love the fact that people act as if something being operated by a government agency means that there is no money-making agenda that is prominant in the operation. It is not as if those driving the vehicles and running the thing are volunteers. They are all getting paid and want to make is much money as possible. That is just the way the world works. This is a capatilistic society and this is still the case with non-profit organizations and government agencies. The country would not be able to function without capitalisism.

And to answer a question that was asked earlier, the reason why private companies can operate this more efficiantly is because there are cost savings that can be made from the fact that they do a lot of this type of work. This is called economies of scale. A private company that operates paratransit service for many transit systems will only have to spend a certain amount for training, for the employees who purchase equipment, for hiring, and for the upper management who lead the company. For example, if Pace were operating the service they would have the pay X amount for one of these things (say: hiring). If it is operated by a private company with economies of scale they would pay a higher total amount for this hiring (i.e: the human resources department) because they have more employees with the many services it provides to different areas. However, they would pay a lower amount per employee and per operating mile because the overhead is scattered among a higher number of people. All of these savings means it cost signifantelly less to provide the service. Subtract what is probably a small part of this savings for the company's profit and it still would be a much smaller cost. It is also likely that companies that do a substantial amount of this work will have better expertise and therefore do the job better than a small department in a governmment agency. So that is an advantage as well.

I see that Rusty did not answer the question that I posed. It appears that MK and CC did.

Maybe Rusty should also do a study on whether the CTA is better run than Las Vegas or Phoenix, where there is a private transportation management company running the bus system. Some drivers complain, but as MK points out, the drivers have their own money-making agenda (as shown Monday by the unauthorized Pace South sickout and the concern those drivers showed for their passengers).

So, Rusty, why is CTA so disinterested in running paratransit?

"The reality is that, whether it is being operated directly by the transit agencies or by a private company, the revenues the very small revenues that are received for the service does not come remoterly close to covering probably even a quarter of the cost."

And that's why privatization doesn't work. I couldn't have said it better myself.

If it's judged important to provide certain special services for those less fortunate that they are not able to pay in full, then it can be done with individual subsidies, tax credits or vouchers provided to the users so that they can exercise some degree of choice and the service providers are accountable to them. The revenue picture is not a reason to mandate a public monopoly with all the attendant potential for abuse of captive customers.

Bob S.,

I'm curious how in the world you concluded from the comment you quoted that privatisation is the cause of what I was talking about. In that portion of my post, I was stating that unfortunetely there just are not enough resources for users of paratransit to always receive good service. As stated, it is true whether it is operated by a government agency or by a private company (or, for that matter, by a non-profit private organization). So, as has been usual today, I'm not sure exactly what you are getting at. Of course that doesn't neccessarally mean you don't have a point (sometimes people can make a good observation from someone else's statement even when the observation wasn't part of what the person intented). So it would be great if you clarified.

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