Elsevier

Transport Policy

Volume 42, August 2015, Pages 52-63
Transport Policy

Inclusion of quality criteria in public bus service contracts in metropolitan areas

https://doi.org/10.1016/j.tranpol.2015.05.002Get rights and content

Highlights

  • Incentives to make quality improvements in inter-urban metropolitan bus services.

  • The subjective value of time and willingness to pay for quality improvements.

  • “WIN-WIN” situation: improved service; lower subsidies, acceptable surplus.

  • No extra administration costs, greater demand and reduced subsidies.

  • Investment in quality can be profitable for both society and operators.

Abstract

The aim of this research is to amend the current contracting system to improve the quality of inter-urban bus services in metropolitan areas and thereby increase demand and reduce externalities.

A methodology is proposed for tendering transport contracts which is applied in the Spanish region of Castilla and León. Based on a previous demand model, new incentives are proposed to encourage the operating companies to make improvements in the quality of service they provide on their metropolitan bus routes. The main contribution made by this research with respect to other similar methodologies is found in the incorporation of the subjective value of time and willingness to pay in exchange for improvements in service quality. This information is used to determine the optimal formula for public subsidies.

The results show that, without any increase in costs for the administration, the amount of the subsidy due for underuse of the service could be reduced by increasing demand through providing a more attractive public transport service. It has also been shown that improvements in quality could be profitable, not only for society at large but also for the operating companies themselves.

Introduction

In many cases, inter-urban public passenger transport services are normally high loss makers and require substantial subsidies to keep going; this is particularly true on lines connecting urban centres with sparsely populated areas and even more so when the population is very spread out. Furthermore, the poor quality of some of these services in terms of their frequencies, routes and the condition of the vehicles produce a kind of “vicious circle”. The poor quality of service generates low demand so any investments made by the bus companies to improve quality turn out not to be profitable. Added to this is the recent trend that, in spite of a rise in the number of inter-urban journeys being made, the proportion being made on public transport is falling. So, the internal and external costs borne by the rest of society to provide this service continue to grow.

This paper suggests a system for providing bus services within a metropolitan area. The system would incorporate quality criteria and would guarantee a minimum demand for the service and a maximum limit to subsidies, adding extra economic incentives to the operators to improve the quality of the services they provide and increase demand volumes.

The paper will be divided into five sections. The Section 1 presents a brief introduction to the subject. This is followed by a description of the most relevant work found in the bibliography. 3 Methodology, 4 Case study, 5 Results describe the methodology followed, its practical application to a case study with a discussion and an analysis of the results. Finally, the main conclusions are presented in Section 6.

Section snippets

Bibliographic review

The quality provided by a public transport service is a fundamental criterion for travellers when choosing which mode of transport to use (dell’Olio et al., 2010; Bordagaray et al., 2014). However, inter-urban bus transport is often “forgotten” in favour of its urban equivalent. Even so, there are some interesting examples of research work carried out in this field (, , ).

Because the aim of this research was to propose a methodology for introducing questions of quality into public transport

Methodology

This research follows on from the methodology proposed by Hensher and Houghton (2004) and Hensher and Stanley (2003) and incorporates the subjective value of time and willingness to pay for service improvements in order to determine the optimal formula for subsidies.

It is essential to know the current demand for metropolitan public transport bus lines as well as the breakdown of the costs required to run the services. A study of the satisfaction levels and the demand for the service should

Case study

Preston (2001) points out the clear tendency in Europe to substitute public monopolies of mass transit services with private company management, with an ever decreasing number of competitors. Furthermore, many European countries currently tend to encourage a free market, among which the most noteworthy examples are the United Kingdom and Sweden (Van de Velde, 2009).

Some systems reward quality of service without reaching the extreme of total privatisation, the cases of certain regions in Norway (

Results

This section will be used to present the results obtained for the 9 routes (one with two sub-routes) included in the Burgos Metropolitan Transport Area. All of these cover short journey distances and a relatively high number of services on working days.

Two different configurations were checked, with and without the consideration of the operator in the objective function, using expressions (14), (15) The maximum available budget will be equal to the total used in the same year to compensate the

Conclusions

The present paper has proposed a methodology for incorporating questions of quality into transport contracts using demand elasticities and passengers' willingness to pay for service improvements.

The results from the pilot application of this methodology to the case study of inter-urban bus journeys made in the metropolitan area of Burgos (Spain) have provided some interesting conclusions. The optimal service quality could be very similar both when the operating surplus was considered within the

Acknowledgments

The writers appreciate the collaboration of the Education Council of the Castilla y León Government and the European Social Fund, through their Formation of Researcher Personnel Aids in the Community of Castilla y León.

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