SFMTA: Improving Mobility or Blocking Competition?

San Francisco Has Seen Various New Private Transport Services Pop Up that Would Make it Easier to Get Around. But the City’s Transportation Agency Thwarts Them.
January 23, 2020

The point of different city transport agencies nationwide is to foster mobility. These MTAs run the local or regional transit service, and in some cases manage parking, taxis, roads, and other right-of-way issues. But many of them do a poor job. They manage transit services marred by misallocation and lack of innovation, helping explain why ridership has declined recently even as urban cores grow. But worse is that these MTAs, aiming to protect their fiefdoms, often stifle private competition that arises in response to these public failures. This double whammy perfectly describes the San Francisco Municipal Transportation Agency (SFMTA). 

SFMTA was formed in 1999 to consolidate MUNI (which runs the buses and rail), the Department of Parking and Traffic, and the Taxicab Commission. The services it runs are not particularly good. For example, MUNI has an on-time rating of 55%, and its per-trip operating expenses are $3.82, which is high for such a dense city. MUNI is among the nation’s slowest systems, breakdowns are frequent, and ridership is declining. Complaints about the buses are common citywide.

But when patrons gravitate to alternative services that better get them around, SFMTA goes on the attack. Below are some examples.

Taxis

A natural response one might have to a poorly-working transit system is to hail a cab, since they’re more flexible and convenient. But SFMTA makes taxis artificially scarce and expensive. There are only 1,450 taxi medallions in service, with only 1,100 of them purchased after 1978. Medallions cost $250,000, amounting to an enormous barrier to entry for a standard occupation. 

Much of taxi drivers’ business has since been poached by rideshare companies, which is understandable, since the former is regulated by the SFMTA, and the latter by the state. But new SFMTA director Jeffrey Tumlin wants to change that. 

“We need changes at the state public utility commission that delegates to municipalities the right range of authority in order to ensure ride-hail supports the public good and minimizes the public harm,” Tumlin told the San Francisco Examiner last November.

Buses

Private buses – aka “jitneys” – were once ubiquitous across San Francisco, operated and patronized by the city’s Asian and Latin American immigrants. The city disliked the competition, and in the early 1970s made jitney companies raise their fares to prevent undercutting MUNI. In 1978, the city stopped issuing permits altogether, causing a gradual industry decline.

Some 2011 reorganization in SFMTA created a brief period of deregulation, and like clockwork new jitneys surfaced, such as Chariot and Leap. But SFMTA was soon back harassing them, writing regulations that let the agency micromanage where they can stop, stating in the bylaws that “routes must complement, rather than compete with, Muni.” SFMTA also authorized permit fees, limits on vehicle length, and mandates that companies share data with the city. 

Within a few years, Leap and Chariot had gone out of business. 

Bikes and Scooters

Across America, the nascent micro-mobility industry – defined by shared app-based services for bikes, scooters, and mopeds – has gotten different reactions. Some cities have been open to the services and seen them grow and flourish. Others have been reactionary – perhaps none more than San Francisco.

SFMTA’s approach to micro-mobility has been command-and-control from the start. They’ve given permits to select companies that have political power, and that can meet arbitrary demands like hiring union workers. This includes Lyft, which at one point SFMTA handed a 10-year exclusive rights deal to operate bike-share in the city. Meanwhile, it harassed and eventually ejected Bird, Lime, and Spin.

Currently, SFMTA allows two companies – Lyft and Jump – to provide a combined 2,400 stationless bikes. Despite getting applications from 12 scooters providers, SFMTA only granted permits for 2 of them, Scoot and Skip. Combined, they can provide 1,425 scooters. 

The rush of applications from both bike and scooter providers shows that there is a huge pent-up demand for these services in San Francisco. But by putting such severe caps on both, SFMTA prevents either from scaling.

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The reason companies even try to provide these services is that San Francisco is a hard place to get around. MUNI has, as I’ve already stated, proven ineffective at moving people quickly, especially if their travel patterns don’t conform to existing bus lines. Personal car ownership is difficult and expensive, and undesirable given the space it consumes. 

San Franciscans thus have no other choice but to seek alternative transport options. By blocking them, SFMTA disrespects that right to choose while imposing a totalitarian mindset. It is effectively saying to locals that they must get around using SFMTA’s poor services, or not get around at all. SFMTA should scale down this mindset, allowing consumers and producers to form the transport networks they actually want to use.