The Los Angeles City Council voted Wednesday to provide a $254,646 subsidy for a private bus company to start a commuter service between Encino and downtown Los Angeles.
The Encino Park-and-Ride is due to start in October from a lot in the Sepulveda Flood Control Basin. It is an experiment to see if the private sector can provide bus service cheaper and more efficiently than the publicly operated Southern California Rapid Transit District, according to a report sent to the council by the city Department of Transportation.
Fares collected will be used to reduce the subsidy.
This is the first time the city has used taxpayer funds to subsidize privately operated commuter buses for service similar to that offered by the RTD, city officials said.
The city previously has provided funds for neighborhood transportation such as the Foothill dial-a-ride service in the northeast San Fernando Valley and the Valtrans van programs, which serve elderly and handicapped riders. But none of these subsidies went for services traditionally provided by the RTD.
Under the contract awarded by the council, Van Nuys-based Laidlaw Transit Inc. will make three bus trips during both the morning and evening rush hours between the lot at the southeast corner of Hayvenhurst Avenue and Magnolia Boulevard and downtown. A fare has yet to be established.
The $254,646 will pay the full cost of the service. If the bus company can provide the service for less, it can pocket the difference, said Donald Howery, general manager of the Department of Transportation.
A company official refused to say how much the company expects to make.
Laidlaw submitted the second lowest of six bids, ranging from $160,000 to $480,000, to provide the service. The lowest bid was rejected because the firm submitting it had "old, broken-down" buses, a Department of Transportation official said.
Howery said he believes it would cost the RTD about $380,000 to provide the same service. He said the principle reason for RTD's higher cost is the salaries of union bus drivers.
RTD spokesman Marc Littman said that, if the RTD's costs are higher than private contractors, it is because it provides additional services, such as a customer information center.
The bulk of the funds to pay for the service will come from a half-cent sales tax increase approved as Proposition A by Los Angeles County voters in 1980 to finance rapid-transit projects.