Our Friday piece on the catastrophic performance of the Capitol Area Transit System in Baton Rouge and the rapid downward spiral of its governing board has generated a bit of buzz over the weekend from those involved and interested in CATS’ governance and the recently-passed 10-year, $184 million tax increase which has created a healthy funding stream for it.
And of course, Monday’s developments with respect to the city’s transit system did nothing to bolster public confidence that the current governance of CATS is capable of reasonable or proper stewardship.
For instance, there was the revelation that CATS can’t account for over $120,000 of revenue it’s supposed to have but doesn’t…
Capital Area Transit System Interim CEO Robert Mirabito said Monday that the bus system has not been able match up funds on hand with the amount the farebox software says the system has.
“I have discovered since 2010, we have not been able to reconcile what our farebox software says we should have and the amount that has been deposited,” Mirabito said at a Monday afternoon news conference. “This trend has continued to grow over time and has never been addressed.”
Mirabito said CATS staff told him it was a “software issue,” but he decided to pursue the problem. An internal audit began on July 19 in an attempt “to get to the bottom of this and will continue until we have determined the cause,” Mirabito said.
According to CATS data, $123,799 is unreconciled with cash on hand. The highest discrepancy came in April 2013, with a $10,955 difference. The lowest discrepancy was in January 2011, at $58.
The CATS folks can’t tell you whether that $123,799 has been stolen, or if it’s just a function of the transit system lying to itself about how many riders it actually has.
One of the main problems with the CATS tax’s passage last year was that the system couldn’t even come up with honest numbers about how many riders it actually has. The figure has varied wildly, from claims at one time of 17,000 riders a day to estimates by opponents of the tax last year that the real number is less than 4,000 – maybe even as low as half that.
What we do know is that very little of what the CATS people tell us can be believed. Our post on Friday centered around the fact that former board member Montrell McCaleb was getting his Verizon and DirecTV bills paid for by CATS, probably as a bribe by board chairman Isaiah Marshall and his allies in exchange for McCaleb’s putative vote in favor of SJB Group to receive a lucrative $1.5 million contract for “program management” for the system. That initiative failed amid scrutiny of what looked like a rigged bid process to favor the politically-connected-but-transit-experience-lacking SJB, and McCaleb had to quit the board over the issue. Naturally, he says he was framed, and anyway he quit because his bronchitis was acting up, but nobody believes that.
Over the weekend, a bit more dirt surfaced on Montrellgate…
The attorney for the Capital Area Transit System advised the board’s president on July 10 that Montrell McCaleb had likely violated the state ethics code and that the full board should be notified, according to emails obtained by The Advocate.
Attorney Creighton Abadie told CATS Board President Isaiah Marshall in an email on July 10 that he would prepare written notices for the CATS chief executive officer to file with authorities. But he later told the board Marshall instructed him not to draft the notices.
Marshall never informed the full board and no complaints were filed by him or the CEO until Friday, after the media reported McCaleb’s improper use of funds.
The actual date Marshall would likely have known about McCaleb’s freebies was May 17, when CATS’ chief financial officer Gary Owens notified Abadie and Marshall of what was going on. The idea he’d only known about it for nine days is bovine scatology, unless we’re to believe he’s only capable of reading his e-mail 50 percent of the time.
But even if he only knew about it for nine days, he still kept quiet about McCaleb through the July 16 CATS meeting, at which Marshall thought he’d have five votes to approve the SJB contract. When that went sideways on him due to the stink over the rigged bid scoring overpowering his 5-4 majority, it all began to fall apart and then McCaleb got pinched for the freebies.
Which means that Monday, we were treated to a dog-and-pony show courtesy of Together Baton Rouge, the affiliate of the Saul Alinsky-founded Industrial Areas Foundation which mobilized hundreds of left-wing community organizers in a get-out-the-vote project to pass the CATS tax increase last year. Unsurprisingly, Together Baton Rouge has now turned on CATS’ board and is throwing them under the bus (we’re still deciding whether that pun was intended) in an effort to preserve the pressure group’s credibility…
The nonprofit, faith-based group Together Baton Rouge called for CATS Board President Isaiah Marshall’s resignation on Monday — the same day the parish bus system’s CEO disclosed a problem with unaccounted-for fare-box revenue.
About 25 members of the organization made their announcement on the steps of City Hall on Monday morning, joining a growing chorus in calling for the Metro Council to take action against the CATS board to restore the public’s trust.
“We are here to say that the leadership of our transit system has fallen far short of the excellence that we deserve,” said Edgar Cage, a Together Baton Rouge leader. “We are here to call for change.”
The statement by Together Baton Rouge accompanying the photo op is laughable stuff…
Over a year ago, this community came together to pass a historic election in support of public transit.
With that election, our community took a stand for an essential public service that has been too long neglected in Baton Rouge and Baker.
We said waiting 90-minutes for a bus is no longer acceptable to this community.
We said 3-hour trip times are no longer acceptable to this community.
We said the lowest funding on public transit in the nation is no longer acceptable to this community.
We said public transportation MATTERS to the future of this community, enough to dedicate a revenue stream to assure that the public transit system is reliable and well-funded.
Here’s what else we said in that moment.
We said that from here on out, we as a community would have a new level of expectation about the quality of leadership and governance of our public transit system.
“Okay” was not going to be good enough.
“Pretty good, by historical standards”, was not going to be good enough.
We would demand excellence.
TBR then proceeded to call for three steps it said would fix the problem – getting the Metro Council to dump at least some of the members of the CATS board, getting the Metro Council to implement some sort of “governance reform” that would change how CATS board members are selected, and getting CATS to select somebody as the Program Manager who has experience in running transit systems. That, of course, would be Veolia Transportation, the company who runs New Orleans’ RTA system, among others, and who was expected to win the bid that was scratched last week when word about the SJB fix got out.
This is what Together Baton Rouge considers “bold change.” Essentially, they’d like to rearrange deck chairs on the Titanic by putting fresh politicians on the board and hiring somebody with a history of making other public mass transit system lose less money than they would otherwise.
That’s not “bold change.” That’s superficial change. That’s a joke. That’s a CYA move by Together Baton Rouge aimed at getting good notices in the press and escaping responsibility for the fact that they inflicted $184 million in taxes on property owners in Baton Rouge and Baker without any realistic expectation the money would be used for any purpose other than paying off crooked politicians and their friends, and thus making said crooked politicians clients of Together Baton Rouge beholden to support the next round of socialistic graft-laden projects that operation would pursue.
Bold change would entail something totally different.
Bold change would be to recognize, as CATO Institute transit expert Randal O’Toole has, that the entire concept of government-monopoly mass transit is an expensive fraud. In a November 2010 study, O’Toole outlined just how bad a problem the current model of public bus systems has become…
The term “socialism” has been much abused in recent years, with people applying it to bailouts, regulation, and other government activities that fall short of actual government ownership. But one industry has unquestionably been socialistic for decades: urban transit, more than 99 percent of which is today owned and operated by state and local governments.
The results have not been pretty. Since 1964, the year Congress began giving states and cities incentives to take over private transit companies, worker productivity—the number of transit trips carried per operating employee—has fallen more than 50 percent. After adjusting for inflation, operating costs per rider have nearly tripled, while fare revenues increased by a mere 8 percent. “It’s uncommon to find such a rapid productivity decline in any industry,” the late University of California economist Charles Lave observed of U.S. transit in 1994.
Today, urban transit is the most expensive way of moving people in the United States. Airlines can transport people at a cost of less than 15 cents per passenger mile, barely a penny of which is subsidized. Driving costs less than 23 cents per passenger mile, which also includes about a penny of subsidy. Socialized Amtrak costs close to 60 cents per passenger mile, about half of which is subsidized. But urban transit costs nearly one dollar per passenger mile, with fares covering only 21 cents per passenger mile and subsidies paying for the rest.
O’Toole goes further, and identifies a fundamental disconnect at work with government-sponsored mass transit that observers of the CATS debacle would recognize…
The fact that more than three out of four transit dollars come from taxpayers instead of transit users has several negative effects on transit programs. For one, transit agencies are more interested in trying to get dollars out of taxpayers, or federal and state appropriators, than in pleasing transit riders. This leads the agencies to focus on highly visible capital improvements, such as rail transit projects, dedicated bus lanes, and supposedly multimodal transit centers, that are not particularly useful to transit riders. Moreover, the agencies neglect to maintain their capital improvements, partly because most of the taxpayers who paid for them never ride transit and so do not know about their deteriorating condition.
Further, dependence on tax dollars makes transit agencies especially vulnerable to economic downturns because the sources of most of their operating funds—generally sales or income taxes, but in some cases annual appropriations from state legislatures—are highly sensitive to the state of the economy. Sales and income taxes are particularly volatile, while property taxes are less so. Yet property taxes provide only about 2 percent of transit operating funds, while sales and income taxes provide more than a quarter of operating funds.
What O’Toole suggests is privatization of mass transit systems, and that’s precisely what Marshall and the crowd supporting that tax last year don’t want to see.
But even privatization of the bus system isn’t really a 21st-century answer to Baton Rouge’s 21st-century mass transit situation.
Sidecar’s smartphone app matches everyday people in their own car with people nearby for shared rides. It’s a fast, safe and fun way to get around the city, meet new people and keep extra cars off the road. Sidecar is a totally different transportation experience. With Sidecar you sit in the front seat, chat with your driver and even choose your own music. When’s the last time you did that in a cab? All drivers are pre-vetted for safety and are free to give rides whenever they want. Sidecar’s safety system includes driver background checks, driver and rider rating systems, GPS tracking features and the ability to share details of your trip in real-time.
Sidecar was founded in San Francisco in 2012 and also operates in Seattle, Los Angeles, Chicago, Boston, and Washington, DC. Company investors include Lightspeed Venture Partners, Google Ventures and others.
Lyft and SideCar skirt the taxicab laws by claiming their rides are “free,” though they “recommend” a donation which looks a lot like a price. And though you could conceivably get a ride from a Lyft or SideCar without paying for it, since they operate off an app which rates both driver and customer based on the experience, riding free will work about as well over the long haul as refusing to tip at a restaurant you frequent all the time – it’ll take forever to get waited on at the restaurant, and the Lyft or SideCar drivers will be taking passes on giving you rides left and right when they know you’re a loss leader for them.
Naturally, the tyrannical regulators who run the big cities Lyft and SideCar are attempting to get footholds in have tried to shut them down. A month ago, Los Angeles hit both of them, plus “black car” ridesharer Uber, with cease-and-desist orders that they’re going to fight…
But those taxicab laws, as they apply to Baton Rouge, are local ordinances. The Metro Council can do with them what they want.
So if, for example, rather than hassling a company like Lyft or SideCar the Metro Council were to decide to welcome them in with open arms and perhaps encourage local entrepreneurs to get into the game as well, this city could very well become a mecca for free-market rideshares.
And maybe, just maybe, in relatively short order the rideshare market would grow strong enough that there would be enough drivers out there to soak up whatever ridership market CATS is currently serving. And at that point you don’t need a bus system at all.
This doesn’t mean that poor people get frozen out of the system at all. Far from it. In fact, since CATS has $18 million a year coming in thanks to that stupid tax’s passage, it could easily set up a program whereby poor people in Baton Rouge could set up accounts with the rideshare companies, link those accounts to a subsidy program that might function a little like an EBT account (yes, we’re as disgusted with food stamps as everybody else, but the issue here is how best to provide a public service we’re not going to get rid of) and thus give them the ability to access transportation services.
And what quality services would they access? Well, go ask all those bus passengers sweating in the hot sun at bus stops whether they’d prefer to walk to a bus station and wait for a ride, or press a few buttons on their cell phones (or just make a phone call to one of the rideshare companies or somebody from CATS who could book them if they don’t have a smart phone) and have somebody drive up to their house or the location where they are to give them door-to-door service?
A clue – nobody prefers the bus to getting a ride in somebody’s car. Nobody.
And the fact is, those rides are actually cheaper than what CATS is providing. Remember O’Toole’s numbers about costs per passenger mile? Driving is 23 cents a mile, and bus service is about a dollar a mile. And 79 cents of that dollar is a government subsidy, while only one cent of the driving mile is subsidized. CATS claims their passenger mile cost is 74 cents, but that number is based on some funny-business ridership figures nobody actually believes; the true number is probably well over a dollar.
And that means structurally, embracing ridesharing is a means of accomplishing lots of different goals in one fell swoop…
1. Eliminating a whole bunch of infrastructure costs which have a way of ballooning over time – CATS would no longer have to maintain bus stops, bus barns or union contracts for employees, it would no longer have to spend a fortune on fuel, it wouldn’t need “program management” contracts with private operators, and it wouldn’t need to do a lot of marketing with an eye toward filling up buses.
2. Embracing rideshare instead of buses provides riders – CATS’ customers – with a far better service that they would without question appreciate. Like we said above, nobody would rather sit in a bus with Lord Knows Who than ride shotgun in somebody’s car or SUV.
3. Opening the market to rideshare drivers is a great way to get the 50,000 or so college students in Baton Rouge (between LSU, Southern and Baton Rouge Community College) not only involved in the workforce but as micro-business owners. Since these companies work off a mobile app that instantly rates both driver and passenger, they’re terrific instructional tools on how the market works and the value of both business reputation and customer service as it plays into commerce. Not that you have to be a college student; the underemployed, unemployed and simply bored can get involved as well. And unlike the unionized bus driver model, there are no labor issues with rideshare – if you’re a great driver and everybody loves you, you’ll do pretty well. If you stink, you probably get bounced out of the market. And if you aren’t getting paid much, you probably do something else.
4. For $18 million a year in tax dollars, at $10 per ride which is what Lyft says is its average cost, CATS could give out 1.8 million in free rides to poor people in Baton Rouge. 1.8 million free rides is 4,931 rides per day. If CATS has 5,000 riders per day let them prove it. And actually, since that $18 million is actually not CATS’ full budget – prior to the tax’s passage CATS’ budget was $12 million per year – the number is more like 3 million rides a year, or 8,219 free rides a day CATS could provide on a $30 million budget. There is no way in hell it’s serving that many now on its buses, nor will it ever reach that number.
5a. Welcoming ridesharing in Baton Rouge takes care of two other quality-of-life issues which have developed in Baton Rouge. First, a few thousand Lyft or SideCar drivers working on LSU football gamedays could ferry a whole lot of people to campus, and in so doing clean up a good deal of the parking problems there – and probably make traffic control a lot easier since they’re just dropping people off rather than roaming around trying to find parking spaces or navigate out of parking lots after the game.
5b. And lastly, one of the stated goals the Baton Rouge Area Chamber, the Business Report and the Forum 35 crowd can’t shut up about is how crucial it is for Baton Rouge to attract 20-somethings and 30-somethings here. But since law enforcement in this town recognized there was a ton of federal money to be made in staging armed camps on busy streets every weekend night in an effort to snare drivers who’ve had a few drinks, what you’ll hear from lots of 20-somethings and 30-somethings who do live here is that it’s no fun to go out on the town anymore when you’re basically taking your freedom in your hands to do it. Sure, designated drivers are the best way to handle that, but that’s not a perfect solution. And while taking a cab is a better solution it’s expensive and Baton Rouge has a tiny taxicab industry. Embrace rideshare, and you can greatly cut down on the threat drunk drivers pose to the public – because why on earth would you take your car out drinking when something convenient like SideCar or Lyft or TigerRides or whatever else a local competitor might come up with as a name is available?
Ridesharing is the future. That’s obvious. It’s also easier to manage than an old-fashioned bus system governed by a bunch of money-grubbing politicians.
Is this a pie-in-the-sky idea? Well, it’s certainly a major break from the status quo. But so what? The status quo is a proven Graftnado, replete with lies, corruption and red ink to go with pitiful customer service and unmistakable market rejection.
We were promised, when that tax was passed, that it would provide this city a great system of mass transportation. Together Baton Rouge is still claiming that as an aspiration. Well, if those aren’t lies – why not bring in rideshare, open the market to competition and let technology and real people perform the innovation that politicians and community organizer types have proven they’re incapable of?