Credit: AP Photo

After Cuts And Fare Hikes, MBTA Eyes Outsourcing In New Budget—To Uber & Lyft

March 15, 2016

Two weeks after eliminating late-night service and a week after announcing fare hikes, more outsourcing—possibly to ride-hailing startups Uber and Lyft—may be on the way, according to MBTA officials.

T officials briefed reporters Tuesday on a $2 billion "preliminary" budget that will be presented to the T's Fiscal and Management Control Board on Wednesday for approval.

Transit officials described the budget as an important step forward in balancing the transit agency's "structural deficit"—the amount, in other words, that the T spends in operating costs and debt expenses over what it what it brings in through fares, taxes, and other sources.

Part of that equation, they said, were the cuts to late-night service and fare increases recently approved by the agency's Control Board, which the T expects to raise an additional $43.4 million in revenue. T officials also cited higher income from advertising. Overall, the T is expected bring in 5 percent more in revenue than it did last year—although expenses are expected to grow by almost as much.

The budget still leaves a “structural deficit” of $80 million, which the T expects to plug with $187 million in aid from the state. Between state aid and fare increases, the T would put $100 million into a separate “pay-go” fund from which it can spend with fewer limitations—like federal requirements—than it can from the agency's general capital fund.

T officials also suggested more cost-saving measures—and possibly controversial ones—ahead. Citing rising costs for employee pensions, MBTA Chief Administrator Brian Shortsleeve said the agency would be focusing on union benefit costs, as well as considering various ways of outsourcing MBTA services to private, nonunion companies—including expanding alternatives to the T's the Ride service to companies like Uber and Lyft.

The T will be issuing a request for proposals to replace some  of the Ride's services in the coming weeks, Shortsleeve said.

If approved on Wednesday, the budget would then go to the transit agency's Advisory Board for final approval.


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