More Dangerous, More Costly: An Analysis of Transportation Outsourcing
Contrary to popular belief, outsourced school transportation services generally have weaker safety records and are more costly than districts operating their own transportation services, according to a number of public documents Minnesota 2020 analyzed for this report.
Times have been tight for many Minnesota school districts, and the pressure to spend money wisely is intense. In this climate, outsourcing district functions like transportation to outside vendors can become politically appealing, as the argument for outsourcing often comes with promises of financial savings and a quality of service as good as (or better than) what the district can provide in-house. These promises, however, often go unfulfilled.
For example, a comparison of the twenty largest out-sourced transportation companies and the twenty largest in-house fleets show only 86% of outsourced buses passed initial Minnesota Highway Patrol safety inspection as compared to a 93% pass rate for in-house district buses. Combined these transportation resources comprise nearly half the state’s busses.
When it comes to financial data gathered by Minnesota state agencies, this report also finds that outsourcing transportation services leads, on average, to higher transportation spending.
After calculating average transportation costs for districts that have at least 95 percent of their transportation services either in-house or outsourced, the average expenditure per pupil per square mile was higher for outsourcers ($7.37) than for in-house districts ($3.97). This is a statistically significant difference.
While some individual outsourcers may have lower transportation expenditures per pupil per square mile than some individual in-house districts, on average, in-house districts spend less on transportation.
Taking both the safety and cost factors together, these findings suggest that the argument for outsourcing is, in fact, a weak one for Minnesota schools. While individual counter-examples may exist, the overall data pattern is that outsourcing is less safe for students and more costly for districts than keeping transportation in-house.
Based on these findings, it is recommended that school districts exercise caution when making the decision to outsource. Specifically, they are encouraged to compare their existing safety record with that of possible vendors and to investigate the real transportation spending of many similar districts that have chosen to outsource. Failure to do so may lead to greater safety concerns for students paired with greater financial costs for the district.