Motorcycles are by far the most popular form of motorized transportation in Indonesia, and are used to provide taxi-like service called ojek as well. In 2014, the two biggest providers of app-based, online booking and payment for conventional (four-wheel) taxis in Indonesia began to offer online booking and payment for motorcycle taxi rides as well. These services proved very popular, cutting sharply into the use and earnings of conventional motorcycle taxis. The Indonesian government was unsure whether and how it should regulate the new mode of transport, which it feared was adding to traffic congestion and accidents. Case number 2164.0
In July 2016, Singapore's Minister for Transport announced that Singapore Mass Rapid Transit Ltd (SMRT) had agreed to sell its trains, tracks, and other operating assets to the government for $1 billion. SMRT would continue to operate and maintain MRT services but as an "asset light" company with the government responsible for financing the assets needed and leasing them to the company. Five months later, Temasek Holdings, Singapore's sovereign wealth fund, purchased the remaining shares of SMRT and delisted the company from the Singapore stock exchange. The two 2016 reforms were just the latest developments in a several decades-long debate about how best to provide high-quality and affordable MRT services in Singapore. The current round had begun several years earlier when SMRT suffered a series of breakdowns that left hundreds of thousands of passengers stranded, in some cases waiting hours in darkened tunnels until they were evacuated. A Commission of Inquiry blamed inadequate maintenance by SMRT, but the key questions were what were the underlying forces that led to the poor maintenance and breakdowns and would the creation of an asset-light, government-owned company help address them? Case number 2110.3
On August 5, 2016, Governor Charlie Baker signed into law Massachusetts' first statewide regulations on ride-sharing services like Uber and Lyft. The law was a monumental victory for the ride-sharing companies given that a few years earlier state officials tried to ban the startups from doing business in Massachusetts. The outcome was a major defeat for the taxi industry, whose drivers and license holders argued that their livelihoods were severely threatened by this new competition. They also believed that the competition was unfair and not in the public's best interest because taxi drivers and vehicles still had to meet stricter safety- and security-standards than ride-sharing services.
In the summer of 2014, Alta Bicycle Share, Inc had just won its second contract to operate the Hubway bike sharing system in the cities of Boston, Brookline, Cambridge and Somerville in Eastern Massachusetts. Emily Stapleton, Hubway's General Manager, was engaged in conversations with project managers from each of the four client municipalities about when and where to expand the system. Expansion was on the agenda because Hubway was widely perceived as a success. Nevertheless the system was facing a number of operating challenges, the most important of which was its effort to ensure that bicycles and empty docks were available when and where needed.
Supplement to case KS1180. In the summer of 2014, Alta Bicycle Share, Inc had just won its second contract to operate the Hubway bike sharing system in the cities of Boston, Brookline, Cambridge and Somerville in Eastern Massachusetts. Emily Stapleton, Hubway's General Manager, was engaged in conversations with project managers from each of the four client municipalities about when and where to expand the system. Expansion was on the agenda because Hubway was widely perceived as a success. Nevertheless the system was facing a number of operating challenges, the most important of which was its effort to ensure that bicycles and empty docks were available when and where needed. Case number 2066.1
In 2011 the World Bank and others were concerned that cities all over the developing world were losing their battle with increasing traffic congestion in part because they lacked institutions that had the authority and the capacity to promote public transportation in an integrated fashion. Lagos was one of the few major cities in the developing world to have a metropolitan area public transportation authority with broad powers, independent resources and a staff of international quality. The Lagos Metropolitan Area Transportation Authority (LAMATA) had some early successes but other agencies were expanding their roles raising the question as to how LAMATA's success could be maintained and replicated. Case number 2052.0
This sequel accompanies Case Number 2047.0. Designed for a course in public finance or in transportation, this case describes the financial crisis that, in 2013, loomed over the Southeastern Pennsylvania Transportation Authority (SEPTA), the transit system serving Philadelphia and four surrounding counties. The difficulties were predominantly in the system's long-inadequate capital budget, which funded maintenance, repair, and replacement costs for the aging legacy system, but these problems were severe enough that they were threatening day-to-day operations. SEPTA had been forced to delay needed reinvestment in the system for so many years that, absent significant new funding, the SEPTA board and general manager warned that they would be forced to shrink its system dramatically over the next 10 years, reducing service in the city of Philadelphia and nearly eliminating suburban commuter rail service. To ground the discussion, the case provides political and structural background about SEPTA, alongside the recent financial history of both operating and capital budgets, allowing students to understand the nature of the funding difficulties that had historically beset the authority. The case also provides enough information on transit finance to support a more general conversation. Case exhibits include demographic and commuting data for the five counties served by SEPTA; fare and subsidy information by mode of transport; fare elasticity by mode of transport; sources of subsidy in both operating and capital budgets; information about the tax burden in Pennsylvania; the projected consequences of abolishing SEPTA for commuting costs, jobs, and property values; and pros and cons of using different kinds of state funding to finance transit. A brief 2-page sequel describes how proponents were eventually able to win legislative approval for additional funding, and what the legislature ultimately chose as its revenue source. Case number 2047.1
Designed for a course in public finance or in transportation, this case describes the financial crisis that, in 2013, loomed over the Southeastern Pennsylvania Transportation Authority (SEPTA), the transit system serving Philadelphia and four surrounding counties. The difficulties were predominantly in the system's long-inadequate capital budget, which funded maintenance, repair, and replacement costs for the aging legacy system, but these problems were severe enough that they were threatening day-to-day operations. SEPTA had been forced to delay needed reinvestment in the system for so many years that, absent significant new funding, the SEPTA board and general manager warned that they would be forced to shrink its system dramatically over the next 10 years, reducing service in the city of Philadelphia and nearly eliminating suburban commuter rail service. To ground the discussion, the case provides political and structural background about SEPTA, alongside the recent financial history of both operating and capital budgets, allowing students to understand the nature of the funding difficulties that had historically beset the authority. The case also provides enough information on transit finance to support a more general conversation. Case exhibits include demographic and commuting data for the five counties served by SEPTA; fare and subsidy information by mode of transport; fare elasticity by mode of transport; sources of subsidy in both operating and capital budgets; information about the tax burden in Pennsylvania; the projected consequences of abolishing SEPTA for commuting costs, jobs, and property values; and pros and cons of using different kinds of state funding to finance transit. A brief 2-page sequel describes how proponents were eventually able to win legislative approval for additional funding, and what the legislature ultimately chose as its revenue source. Case number 2047.0
This sequel accompanies case number 2044.0. In August 2013, the Antitrust Division of the Department of Justice (DOJ) shocked many in the airline industry by filing a lawsuit to block the merger of American Airlines and US Airways on the grounds that the merger would reduce competition. The two airlines had announced their intention to merge in February, making way for the creation of the largest airline in the world. The new airline would carry roughly 200 million passengers a year, employ more than 100,000 workers, and have total revenues of nearly $40 billion. The American Airlines-US Airways merger was only the latest, albeit the largest, in a recent spate of airline mergers. During the first decade of the twenty-first century, the airline industry had been plagued by economic recession, high fuel prices, record losses and bankruptcies. Starting in the mid-2000s, airline executives responded with an aggressive program of consolidation. Mega deals, such as the merger of Delta and Northwest (in 2008), United and Continental (2010), and, Southwest and AirTran (2011), had dramatically reshaped the industry. If approved by federal authorities, the merger between American Airlines and US Airways would leave four major airlines (American, Delta, United and Southwest) in control of 80 percent of the domestic market, down from nine major carriers in 2005. Part A of this case summarizes the historical ups and downs of the volatile US airline industry, the concerns raised by the DOJ and the responses of American Airlines and US Airways, and asks students to weigh the evidence and determine if the advantages of combining the two airlines outweigh the potential harm to consumers. The case sequel describes how the DOJ eventually settled the lawsuit with the airlines, after American agreed to divest slots and gates at several airports in November 2013.
In August 2013, the Antitrust Division of the Department of Justice (DOJ) shocked many in the airline industry by filing a lawsuit to block the merger of American Airlines and US Airways on the grounds that the merger would reduce competition. The two airlines had announced their intention to merge in February, making way for the creation of the largest airline in the world. The new airline would carry roughly 200 million passengers a year, employ more than 100,000 workers, and have total revenues of nearly $40 billion. The American Airlines-US Airways merger was only the latest, albeit the largest, in a recent spate of airline mergers. During the first decade of the twenty-first century, the airline industry had been plagued by economic recession, high fuel prices, record losses and bankruptcies. Starting in the mid-2000s, airline executives responded with an aggressive program of consolidation. Mega deals, such as the merger of Delta and Northwest (in 2008), United and Continental (2010), and, Southwest and AirTran (2011), had dramatically reshaped the industry. If approved by federal authorities, the merger between American Airlines and US Airways would leave four major airlines (American, Delta, United and Southwest) in control of 80 percent of the domestic market, down from nine major carriers in 2005. Part A of this case summarizes the historical ups and downs of the volatile US airline industry, the concerns raised by the DOJ and the responses of American Airlines and US Airways, and asks students to weigh the evidence and determine if the advantages of combining the two airlines outweigh the potential harm to consumers. The case sequel describes how the DOJ eventually settled the lawsuit with the airlines, after American agreed to divest slots and gates at several airports in November 2013.
In January 2009, Herry Zudianto the Mayor of Yogyakarta was reflecting on the apparent failure of his first effort to involve the private sector in the financing and provision of municipal infrastructure. Seven years earlier the City had awarded a 30-year concession to a local private company to build and operate an intercity bus terminal. Earlier that month, the company had sent the Mayor a letter announcing its intention to return the concession on the grounds that the City had not lived up to its commitments. This case is designed to introduce Public-Private Partnerships (PPPs) to an audience that has limited prior exposure to them. The case brings out the various motives or goals for PPPs and the circumstances under which those goals are likely to be sensible and achievable. Case Number 1979.0
In 2011, Chile's Undersecretary of Telecommunications, Jorge Atton, was considering adopting a different policy toward regulating competition in Internet services than previously applied to voice telephony. Atton headed Chile's telecommunications regulatory agency, SUBTEL. For the past two decades, SUBTEL had encouraged the emergence of competition in telephone services in part by forcing the incumbent telephone company to give new entrants to the industry access to its customers. SUBTEL had circulated for public comment consultation document that raised the possibility of imposing "open access" requirements on the providers of broadband Internet services. This case discusses the debate over open access in Chile. This case can be used with the accompanying teaching note (HKS 878). HKS Case Number 1955.0.
In January 2010 the California High Speed Rail Authority (CHSRA) was waiting to hear whether the Obama administration would approve its application for $4.7 billion in federal stimulus funding to begin the construction of a $50 billion, 800-mile high-speed rail corridor connecting all of the state's major regions and cities. In November 2008 California voters had already approved Proposition 1A authorizing the state to issue $9.95 billion in bonds toward construction of the system's initial segment running 465 miles from San Francisco to Los Angeles-Anaheim in Orange County. This case describes the CHSRA's planning efforts and the controversies that arose over the alignment, the demand projections, the financial plan, and the social benefit-cost analysis. HKS Case Number 1935.0
In March 2008 the People's Committee of Ho Chi Minh City, formerly known as Saigon, approved a revised master plan designed to guide the development of the city through the year 2025. Vietnam's economy had been growing at rates of 6 to 8 percent per year for nearly two decades, and much of that growth was located in its cities, and in Ho Chi Minh City in particular. Real estate prices were at all time highs, development pressures threatened the historic French colonial core of the city and the wetlands to the west and southeast, and traffic congestion was growing rapidly as the city was registering 1300 new motorcycles and 150 new cars per day. The new master plan designated areas where growth would be encouraged and included a list of transportation and other infrastructure projects and policies designed to support the desired developments. Not all the elements of the plan seemed consistent with its goals, however, and the list of projects was so ambitious-that it was unlikely that all would be built on schedule. The obvious question was what policies and projects should receive priority. This case is designed to support a discussion of the problems of managing growth in a rapidly developing city. HKS Case Number 1909.0
In the fall of 2001, officials of the National Energy Commission of Nicaragua were reviewing a pilot study of the options for electrification in three rural communities. Rural electrification was an important issue in Nicaragua since 40 percent of the population, mostly in rural areas, was without power. Many of those lived too far from the main high-voltage grid to be served easily with grid extensions. The consultants were recommending subsidizing mini-grids powered by small hydro plants to serve villages and individual solar power systems for isolated rural households. HKS Case Number 1705.3
In 2006 officials of the Municipal Corporation of Greater Mumbai and the State of Maharashtra were beginning to implement a plan to improve the economic fortunes of the city. Mumbai, formerly known as Bombay, was India's richest city, with wealth based on trade, finance and filmmaking. But the city was also famous for its enormous slums, terrible traffic congestion, and poor infrastructure. And while India's economy had been growing rapidly since the late 1980s, Mumbai seems to be losing ground to other cities in India, such as Bangalore, and to other regional financial centers such as Shanghai and Dubai. The plan the city was considering would relax land use and rent control regulations and build new infrastructure in an effort to make Mumbai more affordable and livable. The case is designed to support a discussion of the rationale for regulation and of the political economy of regulatory reform. HKS Case Number 1917.0
In June 2007, the governor of Pennsylvania, was negotiating with the state's legislative leaders about his proposal to lease the Pennsylvania Turnpike to private investors. Leasing public highways to private companies was unheard of in the United States until the City of Chicago leased the Chicago Skyway, an 8-mile toll expressway, for $1.83 billion in 2005 and the State of Indiana leased the 157-mile Indiana Toll Road for $3.85 billion in 2006. The sums astonished state and local governments around the country, and encouraged many, like Pennsylvania, to consider leasing as a means of covering budget shortfalls. This case is designed to support a discussion of the pros and cons of leasing assets as a means of raising public resources and of having the private sector finance and operate infrastructure. HKS Case Number 1878.0
In 2006 planners in the City and County of San Francisco were promoting an overhaul of the city's parking policy that they claimed would correct unfair and unwise subsidies for automobile users. The effort was designed to allow market forces to play a greater role in determining parking costs by, among other things, raising the price of residential on-street parking in neighborhoods where it was scarce, and raising parking meter rates on downtown streets, and amending zoning provisions that specified the minimum numbers of off-street parking spaces that developers of new residential and commercial projects had to provide. The parking reform proposals are controversial and can be used to support a discussion of the nature of economic efficiency and the possibilities for making efficiency-minded reforms politically acceptable. HKS Case Number 1877.0
This sequel accompanies the main case (1862.0). On Tuesday, August 29, 2005, Hurricane Katrina battered New Orleans, causing inadequate levees to collapse and flood the city in what came to be widely seen as a man-made disaster. The Federal Emergency Management Agency (FEMA) calculated that 105,000 of the city's 188,000 housing units were severely damaged or destroyed. It was the worst urban disaster in national memory. However, city leaders were not prepared to accept New Orleans' demise. On September 29, 2005, Mayor C. Ray Nagin appointed a blue-ribbon panel known as the Bring New Orleans Back (BNOB) commission to produce a reconstruction plan by the end of the year. Its volunteer members were leaders in the business and nonprofit worlds. BNOB turned for advice to the Urban Land Institute (ULI), a Washington, DC-based research and educational organization that sought to promote responsible development. HKS Case Number 1862.1