Transportation 13:5-22 (1986) 5 © Martinus Nijhoff Publishers, Dordrecht - Printed in the Netherlands Privatization of urban transit: The Los Angeles jitney experience ROGER E TEAL & TERRY NEMER Department of Civil Engineering; Institute of Transportation Studies, University of California, Irvine, Calif., USA Abstract. This paper reports on a recent attempt to provide private transit in the form of jitney service in downtown Los Angeles. It describes the process undertaken to initiate jitney service and the resultant organization's structure and operation. A survey of jitney passengers provided infor- mation on the users and their tripmaking characteristics. A group of loyal jitney riders emerged who patronized the service because of its lower travel times and more personalized atmosphere. This group formed the core of frequent users. The Los Angeles experience is analyzed in terms of the economic feasibility of jitney service and the impact on the financial status of public transit. The public transit agency experienced a slight negative financial impact as a result of the jitney service. Ridership during peak hours declined somewhat but the jitney service was not frequent enough to carry sufficient passengers to allow the transit agency to cut costly peak hour service. This analysis shows that the jitney service ultimately was not an economically successful opera- tion. The factors which would have increased the likelihood of success were increased frequency of service and higher fares, which would have been sustainable if not for unexpected developments in public transit financing. A labor pool willing to work for low wages, high transit use in the cen- tral city, relatively high transit fares and the availability of inexpensive vehicles appear to be prereq- uisites to a successful urban jitney operation. Introduction The increasingly serious fiscal problems of public transit have prompted a reappraisal of the wisdom of total reliance upon the public sector for mass transit provision in urban areas. Some transportation researchers and policy makers have concluded that one essential strategy for improving transit's cost- effectiveness is to make greater use of private sector transportation providers (Blue Ribbon Panel, 1983). Although such increased "privatization" of urban transit will not solely solve the fiscal problems of public transportation, it would alter the structural conditions which make the transit service delivery system so expensive, and would likely reverse the trend of ever escalating subsi- dy requirements. Proposals for increased privatization of transit take a variety of forms. Among the major strategies are service contracting, turning over public agency services to private operators without subsidies, and removal of regulatory bar- riers to private services which would compete with public transit operations. All of these proposals, and others, raise major policy issues. Are the strategies institutionally feasible, can unsubsidized services be economically viable, how