Should Public Bus Services also run for Private Companies

Our company provides pickup and drop buses employees to the workplace and the service is contracted to multiple service providers. All of te bus service providers are private except one which is state owned (run by local municipal corporation). The govt owned service provider has a set of buses and staff which runs for our need. A colleague objected to it saying this is same as using public transport for personal use and if we did not use it then the buses would be for general public and hence would be more much more use for society.
 

I thought my colleague’s understanding was not correct. We are not using public buses for private use. We are using buses contracted by the public bus service provider for us and we are paying them their charges which includes all costs + the margin. In fact the profits they are earning by contracting some buses to companies like ours, they would be investing it in improving the quality of their service to the public also. They must be earning better margin here than the loss making routes and hence we are helping the often cash strapped public facilities provider with some business. Also, working with IT companies and competing with other private bus service providers, their employees and their organizations would be benefitting in more ways than one – most importantly being the work culture in a competitive environment (otherwise they are monopolistic and hence suffer from lack of accountability). 

What my friend understood is like saying that our company should never send any employee by trains, because every ticket we book could have been used by the general public. It is not the correct way to look at the scenario. 

In fact the govt owned public bus service operator is under huge financial crisis. It is losing money and is like a loss making concern. In such a scenario if it contracts a few buses and staff to serve IT companies on contract, it will only provide it with a regular and fixed source of income; which will improve its cash flow. The opertor will only benefit from such an arrangement. Also, I am sure our company won’t have invited it but it would have bid along with private operators to run operations here, so no blame can be on our company.
 

I think the wider question from his argument is: Should govt companies enter into fields where private operators are already running? I see many benefits of it. In such cases we should not see pieces of operations as exclusive services one at the cost of another. We should see whole of it. So if govt owned public bus service operator runs 10% of its fleet and staff on contract basis for IT companies and earns a regular income; it is not at the cost of public service. We know that no one stops it to buy more buses or hire more staff for public service. 

Similar to this debate is an old one: Should govt companies hire workers on contract? Each resource hired on the contract can be seen as coming at the cost of a full time employee who could earn pension and job security. But in such case we forget that even govt companies have a balance sheet which is evaluated at the end of every year. It is never “only give and no take” kind of affair. I do not see any harm in govt owned companies competing with private operators; just like govt owned public bus service operator is doing here.