If they shoot at you, you shoot at them.

I have been thinking about ways to work around problems such as this. The Brits tried with regulatory measures but weren’t very successful. (Require operators to openly seek service permits and require that they post a bond for 6 months of service, etc. You would at least know that somebody was going to shadow your route 1 minute before your runs. You could jump a minute ahead of him for six months, after applying for regulatory approval, but that could take two months. And you couldn’t stop his henchmen from putting bullet holes in your windshield.)

Any ideas on how to control for this? If not, fixed route service is not likely to work in a free market.

Would you return to a rigid (and rigidly-regulated) and hugely expensive (in terms of taxpayer subsidy) system such as what we have in most of the United States?

In the UK, outside of London, bus operations are entirely private. Utopia? Hardly.

In and around the Washington, D.C. area, private ownership lasted until 1972.

Private sector operators can sort out routes and headways without government supervision.

I agree. Though remember that public transportation service, even when it was owned and operated by the private sector, was still subject to stringent economic regulation. In the Washington area, because so many transit lines crossed a state boundary, that meant regulation was literally in the hands of Congress and the (now-defunct) Interstate Commerce Commission, and later in the hands of a body established to regulate transit in and around Washington. In some other places, regulation was imposed by the same agencies that regulate utility service (frequently a “public service commission”). In other words, just because it was owned and operated by private companies did not mean that those companies could set fares and schedules, because they could not.

Millions of individual drivers sort out their routes and headways every day of the week without checking with the government first.

Though government action (and inaction) influences those choices.

Fares are best left determined by supply and demand. Why do you think the government will be able to determine the fare more ably than the operator who knows his route, customers, competition and overhead?

I don’t. As I suggested above, many (most?) public-sector transit agencies in the U.S. have accepted large sums of money from the Federal Transit Administration, and those dollars come with plenty of strings attached, hence my hedging and reluctance to support 100% private operation.

I think the jitneys mentioned above make it pretty clear that the private sector can indeed set fares and schedules.

In a perfect world (run by me), transit operations would be entirely turned-over to the private sector for starters. After that, the private sector would be encouraged to experiment outside of the fixed route system inherited from the public operator(s), perhaps leading to a truly privatized system.

I would also free all taxicabs from economic regulation (including barriers to entry and elimination of all restrictions on where they may and may not pick up and discharge passengers), and allow cabs to raise or lower their fares as they see fit (government regulation of the taxi industry should be limited to (1) mechanical inspections for safety and emission control equipment; (2) verification that the taxi meter is operating accurately at the advertised rate; (3) regulation of the drivers (to assure that drivers are competent, safe and do not have criminal records); and (4) some method for assuring that taxes and insurance premiums are paid-up).