Cab Innovation at Horse-and-Buggy Pace

"In Pennsylvania, the effect of regulation is to afford existing cab companies a sheltered environment wherein innovation and, frankly, customer service are secondary to maintaining market share in a static environment". The Allegheny Institute wrote that in 2001 in a report analyzing the demand for taxicabs in Pittsburgh.

Back in those days many restaurant owners were complaining about the difficulty in securing cabs for their patrons, noting that the dominant carrier preferred servicing the route between Downtown and the airport instead of running shorter routes. One restaurant owner even launched his own cab service, only to be challenged in court by the dominant carrier. That’s what happens when the regulatory framework requires competitors to prove that there is a need going unmet by the incumbent and administrators decide if their argument has validity.

More than a decade later the City is ready to see its largest incumbent carrier make an announcement that it will offer short taxi trips and that patrons will be able to hail a cab rather than waiting at a stand or calling for service.

What makes the announcement all the more ironic is where the announcement is being made-Market Square. The Square has been renovated and "has seen a proliferation of new restaurants" according to a newspaper report. Imagine if each new restaurant that wanted to open up in the Square had to follow the procedure that new cab companies have to. Someone wanting to open up a deli, or hamburger restaurant, or seafood place would have to have their approval vetted by the incumbent restaurants who would be able to make a case that they too could make what the new restaurants wanted or that lunchtime customers really don’t need more choices. Silly when you think of it that way, isn’t it?

People’s Airline Coming to Pittsburgh?

Plans to revive the old People Express evidently include flights into and out of Pittsburgh International. Great. We have always supported the idea of competition as a way to hold down fares and improve service. And, to the extent the new carrier will offer service to cities not currently being served, that is even better for Pittsburgh area travelers.

But wait. There is a big fly in this ointment. To get the as-yet-to-get-off the ground carrier to commit to Pittsburgh, the Airport Authority is offering the airline free landing and gate fees. Not a good thing. If the carrier is planning to be competitive, and possibly take business away from existing airlines by offering very low fares via the free landing and gate fees, then this is a bad move by the airport. Indeed, the move could be counterproductive if the new carrier, with its enormous costs advantage, forces existing carriers to reduce the level of service and thereby reduce landing and gate fee revenues.

Three cheers for competition. Raspberries for subsidized competition that harms the unsubsidized competitors.

Solving PAT’s Financial Woes: State Problem or Local Issue?

The ongoing saga of the financial morass at the Port Authority (PAT) has developed an interesting twist.  Governor Corbett, through a spokesperson, has responded to PAT’s entreaties for a hefty boost in money from the Commonwealth to cover an impending $64 million deficit by telling PAT that, “they should look to their own resources to come up with a solution.” 


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Predictable Knee Jerk Reaction to Governor’s Voucher Plan

Hot on the heels of the Pennsylvania School Boards Association’s attack on Governor Corbett’s plan to improve educational opportunities for poor students in the state’s weakest performing districts comes a negative editorial in a Pittsburgh newspaper.  The op-ed demonstrates the thinking of those who remain stubbornly committed to the status quo public monopoly schools regardless of massive failures in many districts across the state.


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New PSEA Head Certified to Teach Economics—But What Kind?

The morning news brought the startling revelation that the newly elected head of Pennsylvania’s largest teacher union (PSEA) has a certification to teach economics. Two questions come to mind immediately: what kind of economics is he certified to teach and does it bear any resemblance to real economics?

Bear in mind that the first principle of economics is the law of scarcity. The first principle of unions is to ignore the law of scarcity. Any student with a knowledge of Economics 101 sufficient to get a B grade in the course can tell you that wage rates are a price and that competitive markets for labor are the efficient and best way to allocate labor and determine wages. He would also know that wage rates in different occupations and industries must reflect worker productivity and the price of the product being and sold.

The objective of unions is to do away with market forces and ignore the role of supply and demand. The results, as we have seen, have been catastrophic for U.S. industries such as steel and autos. Now with the Obama administration becoming the heavy-handed advocate in chief for unions, their ability to wreak havoc on the economy is being renewed and the impact on our ability to grow curtailed. When the head of the AFL-CIO is the President’s leading economic advisor, the nation is in serious trouble.

Moreover, and to our great misfortune, in the public sector, where the new PSEA head operates, the forces of international competition can play no countervailing role in suppressing the destructive force of rapacious unionism. Many government services are monopolies that cannot be outsourced. So when unions enter the picture with incessant demands for compensation, favorable work rules and endless grievance procedures, government services become more expensive and are of lower quality than they would otherwise be.

In light of union antagonism to the laws of economics, one must wonder; just what was the nature of the economics covered by the PSEA head’s economic certification?

Perfection as Enemy of Improvement?

In an April 17 editorial, the Post- Gazette chastised Pennsylvania’s voucher advocates as promising more than they can deliver. The editorial lists reasons why the voucher plan might not be as successful as advocates believe or suggest they will be. Okay, maybe vouchers are not the end all and be all answer to government funded education problems.

But good grief, look at the horrendous trail of broken promises brought to us by public schools. Many school districts across this Commonwealth are a disgrace when it comes to the academic achievement of students and the amount of money spent to accomplish their pathetic results. High dropout rates are common, which means huge amounts of money have been wasted trying to get people to the dropout age-people who, in many cases, are far below literacy and numeracy levels for their age. There is low achievement by vast numbers who do graduate but score far below the national averages on SAT tests and require remedial education of they pursue higher education.

And the editorial writer is concerned that vouchers won’t make everyone Phi Beta Kappa scholars? This is the clearest example of the true liberal mind. Claim to be for the little guy and the poor and the helpless and support wasteful, expensive government programs to solve the world’s perceived inequities. But the problem for them is that vouchers do work to improve educational opportunities and they do result in better outcomes. Besides they are used all over the world so as to allow parents and students to select schools that work best for them and their goals. It is a freedom issue and it is a moral issue. Letting people choose is always good. Keeping kids trapped in a failing school when there could be avenues to a better is a moral travesty that leads to wasted lives that need not have been wasted.

So for the liberal their true objectives are revealed when they fight vouchers or demean them. They do not put the interests of children first as they claim. They put the interests of big government and powerful groups who benefit from the status quo ahead of the children. Enough said.

Shuttle Pass

In a repeat of this past weekend’s playoff game, the Port Authority (PAT) does not know if it will have enough drivers volunteer to operate shuttles for the championship game on Sunday. The transit union denies there was any orchestrated plan to cause the shortage of drivers, but noted "a lot of people would rather sit at home and watch the game than volunteer to work an extra shift."

True, and a lot of other people might like to make a living driving a bus or a shuttle without interference from the County’s one-stop-transit-shop. Just two years ago the transit union opposed a plan to permit Lenzner Coach Lines from operating a shuttle between Station Square, Downtown, and the North Side. The head of the union said that "a Lenzner shuttle would take jobs away from his union brethren and leave riders paying more than they would on a PAT bus".

Could there be a better case for removing PAT’s mass transit monopoly? PAT management cannot assign people to drive shuttles and must depend on volunteers. And no other company or regional bus agency can step up and offer service because they are not permitted to do so in Allegheny County. Efficient transit service is subject to the whims of the transit union. If they want to drive they will, if they don’t want someone else to drive, they will stop them.

What a disgrace that the unions have driven PAT into a financial and gross inefficiency ditch and are still holding the Authority up to ridicule.

Here’s an idea for the County Executive. Rather than trying to stand in the way of court ordered re-assessments, appoint some PAT board members who will take a harder line with the unions and then go to Harrisburg and ask for the legislative remedies the Allegheny Institute has been advocating for years. Eliminate the right of transit workers to strike, remove the PAT monopoly, and order the outsourcing of service.

Labor Union Ad to Denounce Pennsylvania Roads

How deliciously ironic. The Laborers Union International announces it will run ads warning motorists about Pennsylvania’s structurally deficient bridges. And why are the bridges deficient?-according to the union not enough money is being spent on the bridges.

Perhaps if the bridges did not cost 30 percent more to repair than bridges in a right to work state with no prevailing wage requirement, they would be in much better shape. The union should be asked this question: In order to have safe bridges in an environment with very limited funds available to do the work, would you be willing to abandon the prevailing wage requirement and allow less expensive non-union labor do the work?

The answer would be no. So, here is what the union is really is saying. We prefer unsafe bridges to giving up any of our stranglehold over the policies of Pennsylvania. Indeed, they are really about soaking taxpayers regardless of the consequences. Looks like France from here.

Tale of Two Transit Authorities

Lost amidst the discussion of the Port Authority’s annual ritual of talking about service cuts, layoffs, and fare hikes as a result of what they see as not enough revenue was the fact that the neighboring Westmoreland County Transit Authority hired a new contractor-from out of state, no less-to operate and maintain its fleet of buses. The WCTA has contracted out its bus service since 1978 due to the fact that the law that incorporated it prohibited it from directly operating buses.

The WCTA had to choose between seven bidders for its business, and the winner has stated that it will offer jobs to all 45 current drivers and mechanics without changing their current benefits. An Allegheny Institute survey of the WCTA contained in a 2005 report found that their drivers’ wage was well below that of PAT.

The outcome of the contractor change? According to the director of WCTA there will be no fare increases or changes to bus service and routes. He also said "I anticipate that the public will not notice any difference."

Contrast that with the status quo at PAT and it is hard to see how the union’s lockdown on mass transit in Allegheny County can be justified. If PAT leadership had refused to back down from its goal of outsourcing a portion of operations it would be much farther along on rightsizing operations than where things stand today.

School Bored?

The advocacy group A+ Schools has produced its annual report card on how well the Pittsburgh Public Schools leadership-the nine member elected school board-handles itself. Overall, the board got a B-: on components of the grade they received a B- for conduct (down from a B last year), a C+ for clarity, B- for competency, and B+ for transparency. These last three grades were unchanged from last year.

Perhaps the most eye-opening grade was a C for time management, a downgrade from last year’s B- which was due partially to "The ‘excessively long" meetings’-some lasting more than four hours" according to the group’s director.

If the board was spending hours on end trying to figure out how to improve performance, encourage competitive options for parents seeking to better their child’s education, or how to reduce the massive per-pupil expenditures, then excessively long meetings might be in order.

Ultimately, the best barometer for the board’s performance could be tied to one indicator: enrollment in the District. And on that measure (enrollment has fallen from 32% since the start of the decade and significantly outpaces the overall decline in City population) there can be no above-average grade.