Contracting transit operations

Transit agencies may contract for a portion or all of their operations needs. Smaller, newer transit agencies without historical relationships with unionized labor are more likely to contract all of their service. Larger, older agencies with standing relationships and long histories with unionized labor typically contract only a portion of their labor, if any at all. Reducing the number of union contracts would be politically difficult.

Three general perceptions about how contracted labor reduces operating costs dominate contemporary views. First, contracting labor capitalizes on any difference in the cost of non-union labor in the private sector. Typically, non-union labor is believed to be less costly than unionized labor. Second, contracting with the private sector introduces competition into the labor market, creating an incentive for labor unions to reduce wages in their contracts with the public sector.