An actuary method for the estimation and comparison of urban bus transit cost of services

This paper presents a new cost allocation method developed for estimating the fully-allocated costs of the excess peak hour bus transit service provided by two public transit systems. The estimates were produced for the explicit purpose of carrying out a realistic comparison of these costs and the costs of the potential provision of the same service by private operators. The method utilizes the same service data for the analysis. The pragmatic estimation of the fully allocated costs of service by the public and private sectors enables a more accurate estimation of potential cost savings. Sensitivity analysis was also performed using the same costing procedure to determine the range of cost savings that are feasible in a competitive contract arrangement of private sector providers. The new method separates costs of the direct provision of service from other indirect costs and thus facilitates the identification of each cost item and its significance in comparative cost estimates.     

Intermodal Transit System Coordination

In urban areas where transit demand is widely spread, passengers may be served by an intermodal transit system, consisting of a rail transit line (or a bus rapid transit route) and a number of feeder routes connecting at different transfer stations. In such a system, passengers may need one or more transfers to complete their journey. Therefore, scheduling vehicles operating in the system with special attention to reduce transfer time can contribute significantly to service quality improvements. Schedule synchronization may significantly reduce transfer delays at transfer stations where various routes interconnect. Since vehicle arrivals are stochastic, slack time allowances in vehicle schedules may be desirable to reduce the probability of missed connections. An objective total cost function, including supplier and user costs, is formulated for optimizing the coordination of a general intermodal transit network. A four-stage procedure is developed for determining the optimal coordination status among routes at every transfer station. Considering stochastic feeder vehicle arrivals at transfer stations, the slack times of coordinated routes are optimized, by balancing the savings from transfer delays and additional cost from slack delays and operating costs. The model thus developed is used to optimize the coordination of an intermodal transit network, while the impact of a range of factors on coordination (e.g., demand, standard deviation of vehicle arrival times, etc) is examined.     

“Comparing guideway transit implementation plans,including the impact on road traffic”

A methodology for comparing phased implementation plans for a new fixed guideway transit system in an urban area is presented. Four assumptions are made: (1) the guideway system replaces existing or planned bus service, (2) superior service on the new system results in increased ridership when compared to buses; (3) presence of the guideway facility redirects outward urban growth resulting in additional ridership, and (4) conversely, the absence of any action on the new guideway facility reinforces a diffuse urban growth pattern that creates an irreversible loss of transit ridership. The economic comparision of alternative plans includes total as well as “relative” inflation of principal cost components. A key feature of the proposed methodology is including in the comparisons the costs of private automobile mileage that could have been replaced by transit. These costs are expressed as “fuel” and “all other” automobile costs; favorable transit system implementation schedules can then be identified as a function of parametrically assumed values for these two unit costs. A hypothetical example demonstrates the proposed method.     

A comparison of the sustainability of public and private transportation systems: Study of the Greater Toronto Area

A macroscopic assessment of the impacts of private and public transportation systems on the sustainability of the Greater Toronto Area (GTA) is undertaken from economic, environmental and social perspectives. The methodology draws upon the urban metabolism and sustainability indicators approaches to assessing urban sustainability, but compares modes in terms of passenger-kms. In assessing the economic sustainability of a city, transportation should be recognized as a product, a driver and a cost. In 1993, the traded costs of automobile use in the GTA were approximately balanced by the value of the automobile parts and assembly industry. But local transit costs 1/3 to 1/6 of the auto costs per person-km, in traded dollars, mainly because local labour is the primary cost.Public transportation is more sustainable from an environmental perspective. Automobile emissions are a major contributor to air pollution, which is a serious contemporary environmental health problem in Toronto. Public transportation modes are less energy intensive (including indirect energy consumption) and produce CO₂ at an order of magnitude lower, although these benefits are partially undermined by under-utilization of transit capacity and the source of electricity generation.The social benefits of automobile use are likely more significant than costs in determining GTA residents' preferential mode choice. The speed and access of auto use provide important economic benefits, e.g. relating to employment and product choice. Nevertheless, offsetting the service attributes of private transportation are large social costs in terms of accidents. The costs of automobile insurance provide one tangible measure of such negative impacts.In order to improve the sustainability of the GTA, innovative approaches are required for improving the performance level of public transportation or substantially reducing the need for the service level provided by automobiles. Efforts such as greater integration of bicycles with public transit, or construction of light-rail systems in wide roadways, might be considered. But to be sustainable overall, a transportation system has to be flexible and adaptable and so must combine a mixture of modes.     

Estimation of urban bus transit marginal cost without cost data

We develop a method to study the industrial structure of urban bus transit without using cost data. To do so, we estimate the marginal cost function under the assumption that firms compete on frequency and adjust frequency to maximize profits. Our methodology is applied to Santiago, Chile. In this case, demand is modeled with a simplified model of transit network assignment. The goal is to consider how frequency, capacity, and on-board passengers affect the bus line’s demand. The marginal cost function is estimated by using the first-order conditions of the firm’s profit maximization problem, using the results of the demand model as data. We conclude that the urban bus transit industry in Santiago exhibits increasing returns to scale for low levels of demand and that these returns are exhausted rapidly at a moderate demand level. Additionally, firms exhibit economies of network expansion, on average.     

Modeling transit technology selection in a linear transportation corridor

This paper proposes an analytical model for investigating transit technology selection problem from a perspective of transit authority. Given a transit technology alternative (e.g., metro, light rail transit, or bus rapid transit), the proposed model aims to maximize the social welfare of the transit system by determining the optimal combination of transit line length, number of stations, station location (or spacing), headway, and fare. In the proposed model, the effects of passenger demand elasticity and capacity constraint are explicitly considered. The properties of the model are examined analytically, and a heuristic solution procedure for determining the model solution is presented. By comparing the optimized social welfare for different transit technology alternatives, the optimal transit technology solution can be obtained together with critical population density. On the basis of a simple population growth rate formula, optimal investment timing of a new transit technology can be estimated. The proposed methodology is illustrated in several Chinese cities. Insightful findings are reported on the interrelation among transit technology selection, population density, transit investment cost, and transit line parameter design as well as the comparison between social welfare maximization and profit maximization regimes. Copyright © 2014 John Wiley & Sons, Ltd.     

The importance of time in transit and reliability of transit time for shippers,receivers, and carriers

Reliability of transit time is reputed to be the most important variable influencing freight transport today, according to shipper surveys. Average transit time also plays a major role. A model is developed that shows how a cost-minimizing shipper will adjust its economic order quantity as reliability and/or time in transit changes. Such changes impact on average inventory costs, ordering costs, expected shortage costs and expected excess costs. The model is developed for both discrete and continuous transit time distributions. Reliability is defined as the variance of transit time. A matrix is prepared for some sample data, which shows the minimum cost attainable with each mean/variance of transit time distribution. Comparing across rows and columns of the matrix enables one to show the value (reduction in total cost) obtainable by improving reliability and/or mean transit time. In addition, value can be obtained by improving reliability while increasing average transit time. It is suggested that the model can be used for shippers in negotiating service improvements with carriers and by carriers in negotiating service improvements with shippers. In the former case, the carrier can determine how much they are willing to pay for the improvement, whereas in the latter case, the carriers can determine how much they are able to charge for the improvement.     

An economic theory of the public transit firm

This paper presents an economic theory of the public transit firm that considers the public transit firm's operating objectives related to size maximization and cost minimization as well as its operating options and passenger quality-of-service characteristics. The theory indicates that the variables to be used in the performance evaluation of a public transit firm are its operating options and fare. A single measure for transit performance evaluation is the shadow price in maximizing passengers subject to an overall deficit constraint (to be financed by government).     

Fully allocated costing in U.S. regulated transportation industries

This paper considers costing criteria to evaluate various single capacity and alternative capacity rules for allocating shared costs among transportation movements (i.e. determining fully allocated costs). The costing evaluation criteria are: (1) core allocations, (2) encourages internally efficient capacity decisions, (3) fairness, and (4) low computation costs. The principal conclusion of the paper is that alternative capacity rules for allocating shared-capacity costs among transportation movements are generally superior to single capacity rules that have been used by the Interstate Commerce Commission.     

The cost of equity: Assessing transit accessibility and social disparity using total travel cost

Social equity is increasingly incorporated as a long-term objective into urban transportation plans. Researchers use accessibility measures to assess equity issues, such as determining the amount of jobs reachable by marginalized groups within a defined travel time threshold and compare these measures across socioeconomic categories. However, allocating public transit resources in an equitable manner is not only related to travel time, but also related to the out-of-pocket cost of transit, which can represent a major barrier to accessibility for many disadvantaged groups. Therefore, this research proposes a set of new accessibility measures that incorporates both travel time and transit fares. It then applies those measures to determine whether people residing in socially disadvantaged neighborhoods in Montreal, Canada experience the same levels of transit accessibility as those living in other neighborhoods. Results are presented in terms of regional accessibility and trends by social indicator decile. Travel time accessibility measures estimate a higher number of jobs that can be reached compared to combined travel time and cost measures. However, the degree and impact of these measures varies across the social deciles. Compared to other groups in the region, residents of socially disadvantaged areas have more equitable accessibility to jobs using transit; this is reflected in smaller decreases in accessibility when fare costs are included. Generating new measures of accessibility combining travel time and transit fares provides more accurate measures that can be easily communicated by transportation planners and engineers to policy makers and the public since it translates accessibility measures to a dollar value.     

A comparison of two methodologies for selecting transit performance indicators

Two contrasting methodologies have appeared in the literature for selecting indicators to evaluate the performance of public transit firms. One methodology specifies the criteria that the selected performance indicators must satisfy. The other methodology requires the specification of operating objectives by the transit firm for the purpose of then selecting performance indicators. This paper compares the two methodologies and discusses the attributes of one methodology versus those of the other methodology. Also, a major difference in the premises of the two methodologies is demonstrated.     

Reducing the cost of peak hour transit service through contracting out service

Transit service contracting has responded to fiscal and financial woes of public transit agencies as the most uniquely attractive cost‐saving strategy at present. Most transit service contracting, however, has been in the traditional provision of entire fixed route bus service or commuter express bus service, and exclusive demand responsive service for the general public or for special disadvantaged population groups such as the elderly and/or the handicapped. This paper presents a new module in transit service contracting whereby the public and private operators jointly provide the peak service on the same route and at the same time. While the public agency provides the base demand of the service, the private provider provides the excess demand, both following the same schedules and similar service arrangements. In this paper, proposed service arrangements, costing and contracting procedures are discussed. It is also reported that substantial cost savings ranging from 32 to 57% with an average savings of 48% can be achieved if the excess peak hour bus transit service on highly peaked routes in public transit agencies is contracted to competing private operator(s).     

The impact of a financial constraint on the spatial structure of public transport services

Using a single line model, it has been shown recently that the presence of a stringent financial constraint induces a less than optimal bus frequency and larger than optimal bus size. This occurs because the constraint induces a reduction of the importance of users’ costs (their time); in the extreme, users’ costs disappear from the design problem. In this paper we show that such a constraint also has an impact on the spatial structure of transit lines. This is done departing from the single line model using an illustrative urban network that could be served either with direct services (no transfers) or with corridors (transfers are needed). First, the optimal structure of lines is investigated along with frequencies and vehicle sizes when the full costs for users and operators are minimized (unconstrained case); the optimal lines structure is shown to depend upon the patronage level, the values of time and the cost of providing bus capacity. Then the same problem is solved for the extreme case of a stringent financial constraint, in which case users’ costs have relatively little or no effect in determining the solution; in this case the preferred outcome would be direct services under all circumstances, with lower frequencies and larger bus sizes. The impact of the financial constraint on the spatial structure of transit lines is shown to be caused by the reduction in cycle time under direct services; the introduction of users’ costs in the objective function makes waiting times reverse this result under some circumstances.     

Optimization of transit-system characteristics

The transit industry is facing declining ridership and increasing costs with with no apparent end in sight. This paper takes the view that totally new solutions are needed. The approach is to examine the equation for total cost of a transit system per passenger-mile to determine how to configure a new system to minimize this quantity. Term-by-term analysis leads to derivation of a consistent set of optimum characteristics. Guideway costs are minimized by distributing the load in very small capsules. The fleet cost is minimized by increasing the average speed without increasing the cruising speed by use of off-line stations, which in turn minimize energy use by permitting nonstop trips. Maintenance costs are minimized by designing a very light-weight, automated vehicle with very few moving parts. While this general configuration has been known for several decades, it has not been generally recognized that it can be derived by minimization of system costs, and that cost minimization is obtained simultaneously with service maximization. While a great deal of controversy surrounded this concept a decade ago, advances in technology make it fully practical now.     

Dispatching control at transfer stations in multi‐hub transit networks

Among dispatching control approaches, the holding option has attracted the most attention in bus control. However, holding a vehicle at a transfer station may exacerbate the delays because more passengers might accumulate at downstream stations and may also affect other connecting routes at other transfer stations. Our problem is to minimize the total costs of dispatching ready vehicles at each transfer station along coordinated routes in a multi‐hub transit network. The total costs include the waiting cost for on‐board passengers, the missed connection costs for late arrival passengers at the subject transfer station and possible transfer costs at downstream transfer stations. We develop a heuristic algorithm to optimize the holding times based on real time information about late vehicles. The results show that ready vehicles should be held longer when the arrival variances of late vehicles are small or when many late connecting passengers are expected.     

Optimization of emergency crossovers and signals for emergency operations in rail rapid transit

This paper presents a methodology for designing rail transit systems to meet operating requirements when track maintenance or failure cause sections of tracks to be unavailable for service. The methodology can be also used to establish the requirements for the continuity of operations during construction. The main objective of the paper is to develop a tool which performs trade-offs between system costs and level of services during emergencies/construction. Several alternatives, including various signal and control systems, number and types of crossovers and corresponding operating strategies, are developed and evaluated against capital investments. Operating measures and strategies for the selected alternative can be recommended before the design phase is completed, because the designer, by using this methodology, is aware of the capacities attained during emergencies and construction.     

A cost-competitiveness analysis of charging infrastructure for electric bus operations

This study investigates the cost competitiveness of different types of charging infrastructure, including charging stations, charging lanes (via charging-while-driving technologies) and battery swapping stations, in support of an electric public transit system. To this end, we first establish mathematical models to investigate the optimal deployment of various charging facilities along the transit line and determine the optimal size of the electric bus fleet, as well as their batteries, to minimize total infrastructure and fleet costs while guaranteeing service frequency and satisfying the charging needs of the transit system. We then conduct an empirical analysis utilizing available real-world data. The results suggest that: (1) the service frequency, circulation length, and operating speed of a transit system may have a great impact on the cost competitiveness of different charging infrastructure; (2) charging lanes enabled by currently available inductive wireless charging technology are cost competitive for most of the existing bus rapid transit corridors; (3) swapping stations can yield a lower total cost than charging lanes and charging stations for transit systems with high operating speed and low service frequency; (4) charging stations are cost competitive only for transit systems with very low service frequency and short circulation; and (5) the key to making charging lanes more competitive for transit systems with low service frequency and high operating speed is to reduce their unit-length construction cost or enhance their charging power.     

Jointly optimizing cost, service, and environmental performance in demand-responsive transit scheduling

In certain fleet systems, the environmental impacts of operation are, to some extent, a controllable function of vehicle routing and scheduling decisions. However, little prior work has considered environmental impacts in fleet vehicle routing and scheduling optimization, in particular, where the impacts were assessed systematically utilizing life-cycle impact assessment methodologies such as those described by the Society of Environmental Chemistry and Toxicology. Here a methodology is presented for the joint optimization of cost, service, and life-cycle environmental consequences in vehicle routing and scheduling, which we develop for a demand-responsive (paratransit or dial-a-ride) transit system. We demonstrate through simulation that, as a result of our methodology, it is possible to reduce environmental impacts substantially, while increasing operating costs and service delays only slightly.     

Public transit and alternative fuels – The costs associated with using biodiesel and CNG in comparison to diesel for U.S. public transit systems

This study addresses the dearth of research that examines the impacts of alternative fuel use on operational costs of public transit in the U.S. Specifically, the study examines the impact on operational costs of shifting diesel gallons to biodiesel or to compressed natural gas (CNG) for an unbalanced panel of 269 public transit systems in the U.S. from 2008 through 2012, using an econometric cost function approach. We find that shifting all diesel gallons to biodiesel results in operational cost increases ranging from 1 to 12 percent, with smaller cost increases being realized with increases in system size. Shifting all diesel gallons to CNG results in operational cost increases between 5 and 10 percent – again with smaller impacts for larger systems. These findings suggest that there are some economies of using biodiesel and CNG with large scale production. That is, the cost increases associated with increased fuel prices, decreased fuel economy, increased maintenance costs, and increased fueling costs associated with biodiesel and CNG are mitigated somewhat by large scale production. The findings of this study suggest that increased operational costs are an important consideration in policies aimed at encouraging the use of alternative fuels by U.S. public transit systems.     

On seat capacity in traffic assignment to a transit network

Seating or standing make distinct on‐board states to a transit rider, yielding distinct discomfort costs, with potential influence on the passenger route choice onto the transit network. The paper provides a transit assignment model that captures the seating capacity and its occupancy along any transit route. The main assumptions pertain to: the seat capacity by service route, selfish user behaviour, a seat allocation process with priority rules among the riders, according to their prior state either on‐board or at boarding. To each transit leg from access to egress station is associated a set of ‘service modes’, among which the riders are assigned in a probabilistic way, conditionally on their priority status and the ratio between the available capacity and the flow of them. Thus the leg cost is a random variable, with mean value to be included in the trip disutility. Computationally efficient algorithms are provided for, respectively, loading the leg flows and evaluating the leg costs along a transit line. At the network level, a hyperpath formulation is provided for supply‐demand equilibrium, together with a property of existence and an method of successive averages equilibration algorithm. It is shown that multiple equilibria may arise. Copyright © 2010 John Wiley & Sons, Ltd.