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Friday, June 18, 2004

A streetcar named prodcutivity via Mckinseyquarterly

Bus and train systems habitually run at a loss. But public-transit agencies could lower costs and raise the quality of service by emulating best practices from around the world.From Delhi’s famously overcrowded buses and the legendary Paris Métro to the waves of commuter trains rolling into Manhattan each morning, transit systems are as different as the cities they serve. Most, though, share one unfortunate characteristic: chronic operating deficits. According to a recent McKinsey benchmarking study of 48 public-transit operators around the world, the average transit agency covers less than 70 percent of its operating expenses with passenger revenues.In cities around the world, high-performing transit systems seem to offer the only route away from traffic congestion and toward a more civilized environment. But public resources are scarce, and if transit managers are to maximize the value of what public money they do receive, they must look closely at the underlying drivers of performance and cost-effectiveness. They will then be able to make informed choices among the many trade-offs involved in providing quality service at low cost to the millions of people, in hundreds of cities, who depend on public-transit systems every day. A very important study undertaken by Mckinsey
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