Consequences of public ownership and subsidies for mass transit: Evidence from case studies and regression analysis

The trend toward public ownership, public regulation, and public subsidization of the U.S. transit industry has recently come under attack. Many argue that the result has been reduced productivity, increased costs, and very little real benefit. This article examines the impacts of subsidies and public ownership in four large transit systems that cover a range of transit system types and financing arrangements. Evidence from the case studies is compared to the results of both time-series and cross-section regression analysis of operating and financial statistics for large samples of bus systems. Although the case studies and the regressions rely on different datasets and different techniques, they support the same conclusions. Increased subsidies and public ownership have kept down fares and permitted service expansion, but have also encouraged wasteful cost escalation. Thus, transit riders unquestionably have benefited from public takeovers of transit systems and burgeoning subsidies, but not nearly as much as they would have benefited if costs had not skyrocketed at the same time.     

Urban public transport in Japan

This article describes some general features of public transport provision in the urban areas of Japan (especially the large urban areas), and some specific features of an integrated transport system currently being developed in one such area. Although there are a number of important differences between Japan and the United Kingdom — such as the degree of urbanisation, level of car ownership, the responsibilities of government organisations and the existence of private railways in Japan — there are many similarities in the role that public transport plays and the factors which influence the efficiency of public transport.The success or otherwise of the developments in urban public transport systems in Japan would seem to have important implications for the design of transport systems in the similarly dense and compact conurbations of the United Kingdom and other European countries.     

Urban transport in Germany: providing feasible alternatives to the car

With the second highest level of car ownership in the world, and the third highest population density in Europe, Germany has adopted a range of policies to balance the many private benefits of car use with its serious social and environmental problems. In order to ‘tame’ the car, most German cities have implemented a twofold strategy of expanding and improving pedestrian, bicycling and public transport alternatives simultaneously with restricting car use and making it more expensive. That has increased political acceptability since the car‐restrictive measures are not perceived as mere punishment of car drivers. The results of this coordinated urban transport strategy have been impressive. Germany, as a whole, has managed to increase public transport use and to stabilize the car share of modal split. Some cities, of course, have been more successful than others, and this paper examines three of the most successful cities: Münster, Freiburg and Munich. In each of the cities, the percentage of travel by bicycling, walking and public transport has been raised over the past 20 years, while the car's share of modal split has fallen. This article documents the range of policies used to restrict car use, both in Germany as a whole, and in the three case‐study cities in particular. The key to success is found to be mutually reinforcing transport and land‐use policies. It is the combination of a whole set of coordinated policies that explains the dramatic success in changing travel behavior.     

Changing patterns of urban travel Part 2. public transport and future patterns of travel

This two‐part paper contains most of a report prepared by TRRL for the European Conference of Ministers of Transport, and presented by one of the authors to the Council of Ministers in November 1984. Part 1, which was published in the January‐March 1986 issue of Transport Reviews, looked at the way cities have been changing over the years and the influence of growing car ownership on trip patterns. This part examines the changes in public transport use in more detail, considers the interactions between the various underlying trends, speculates on future travel patterns by both public and private means and considers the likely impact of land use and transport policies.     

Development and Deployment of Public Transport Policy and Planning in Taiwan

Over the past decade, the escalating roadway congestion and environmental deterioration due to heavy use of private vehicles have provoked the Taiwan government to realize the importance of public transport systems. Under the “carrot-and-stick” rationales, the government has formulated public transport policies and exercised a series of related initiatives by providing sufficient and higher quality of public transport services so as to attract more private vehicle users. In this paper, the planning philosophy and policy formulation of Taiwan’s public transport development are highlighted. The most important initiatives, including the Five-year Enhancement of Mass Transportation Program and the upgrading public transport schemes in the National Development Plan are examined. Based on previous experience and lessons, we point out the most challenging issues that the government will encounter. Suggestions for the future of public transport planning are also addressed.     

Joint impact of competition,ownership form and economic regulation on airport performance and pricing

The combined impact of ownership form, economic regulation and competition on airport performance is analyzed using data envelopment analysis to measure cost efficiency in the first stage and regression analysis to measure the impact of the environment in the second stage. The empirical results of an analysis of European and Australian airports over a 10 year timeframe reveal that under relatively non-competitive conditions, public airports operate less cost efficiently than fully private airports. Irrespective of ownership form, regulation is necessary to emulate competitive forces thus pushing airport management towards cost efficiency and reasonable pricing policies. Under potential regional or hub competition, economic regulation inhibits airports of any ownership form from operating and pricing efficiently. Although public and fully private airports operate equally efficiently in a competitive setting, private airports still set higher aeronautical charges. Furthermore, mixed ownership forms with a majority public holding are neither cost efficient nor low price, irrespective of the level of competition.     

Regulating transport’s environmental impacts in a deregulating world

In recent years, a growing awareness of the environmental impacts of transport has played a major part in the shift towards policies to manage the demand for travel. As a result, a substantial increase in the role of public transport has been identified as necessary in any strategy towards more environmentally sustainable transport patterns. At the same time there has been a quite separate process of deregulation and the withdrawal of the state from the transport market. These two trends appear to represent potentially contradictory processes. This article draws upon two major studies that explore the relationship between increasing needs for environmental regulation and the privatisation of bus and rail services. It is shown that, as currently organised in Britain, the development of bus and rail services are inadequately linked to strategic environmental policymaking and, rather than being part of the solution to transport’s environmental impacts, there is a real danger that these ‘green’ methods of transport could slide into simply being part of the problem itself. It is concluded that privatisation and deregulation does not mean the end of the need for policy mechanisms, but they do mean that policy has to be implemented in a very different way.     

The demand for public transport. part II. supply and demand factors of public transport

Abstract

This two‐part article, concerned with the way public transport ridership is affected by the various relevant factors, is based on the Executive Summary of The Demand for Public Transport (Webster and Bly 1980), the report of the TRRL‐sponsored International Collaborative Study on Factors Affecting Public Transport Patronage. Part I of the article, which was concerned with the social and economic conditions in which public transport operates, showed the importance of the background factors such as income, car ownership and land use on public transport usage: it also indicated how the longer‐term impacts of the more direct demand factors (fares, service levels) often show themselves in changes in car ownership levels, activity patterns (i.e. where people live, work, shop, socialize, etc) and land‐use development.

Part II reviews the current state of knowledge on the effects of changes in fare levels and quality of service and of the introduction of various traffic and transport measures (traffic restraint, bus priority, etc): it outlines current methodology on costing public transport services and draws the supply and demand sides together in a consideration of particular strategies which are at the disposal of the operator, the planner and the policy maker.     

Nature or nurture: why do railroads carry greater freight share in the United States than in Europe?

During the 1950s, the share of freight carried by railroads was similar and declining in both the United States and Europe. By 2000, the railroads’ share of freight (measured in ton–kilometers) had reached 38% in the United States while falling to 8% in Europe. This paper examines the reasons for the difference in rail’s share of freight in Europe and the United States. We find that almost 83% of the gap in 2000 is probably due to natural or inherent differences, principally geography, shipment distance, and commodity mix. However, 17% of the gap cannot be explained by these inherent differences and is presumably due to public policies including priority of passenger service, lack of interoperability at borders, service quality and rates, and incentives of the rail operators. We estimate that if that policy gap were closed, railroads’ share of freight in Europe would increase from 8% to 13%.

Financing public transport systems in Kuala Lumpur,Malaysia: challenges and prospects

Most major cities across the world today are facing an intractable challenge of financing public transport. In Kuala Lumpur for example, public transport services are somewhat poor in part because of the failure of major operators to secure ample funding. Previous funding programs implemented in the city have failed to produce a replicable model for financing public transport. Due to numerous financial problems and the dismal performance of privately owned transport firms, the State has in the recent past emerged as a key source of funding for the public transport sector in Kuala Lumpur. This article argues that, despite the insuperable challenges, prospects for the future funding of public transport in Kuala Lumpur appears to be good. The article also draws lessons from both Tokyo and Hong Kong. In order to address the funding deficit facing the public transport industry in the city it is crucial that more viable strategies and policies such as value capture and public–private sector partnerships are adopted by the urban authorities.

The impact of urban form on commuting in large Chinese cities

Studies on cities in Europe and the United States have demonstrated that travel behaviour is influenced by urban form. Based on these findings policies steering the shape of cities have been proposed to reduce urban transport emissions and limit congestion. Such policies can also be relevant for the rapidly growing and motorising Chinese cities. Yet, empirical evidence on the relationships between urban form and car usage is scarce for the specific Chinese context that is characterised by high densities, fast development and strong government steering. Using novel crowd-sourced datasets we study the impact of several urban form variables (city size, urban density, land-use mix, polycentricity and spatial clustering) on the cost of commuting expressed in time and distance. The results show that city size and spatial clustering are important determinants of commuting: large cities without clear clusters of businesses and other facilities have longer average commuting times and distances. Increased prosperity also adds to longer and lengthier commutes. Spatial planning measures that maintain or reinforce high-density clusters can help limiting commuting distance and time. Current sprawled urban development may have long-term, negative consequences for the accessibility and liveability of Chinese cities and could hamper their economic potential.     

Attitudes of Hong Kong residents to cars and public transport: Some policy implications

Hong Kong currently has low levels of car ownership and use due to a combination of good public transport, high population densities and high private transport costs. However, levels are rising, contributing to congestion and environmental problems. A major response by the government is to seek to increase rail's share of public transport journeys from its current level of 33% to 45% by 2016. After reviewing the transport situation in Hong Kong, the paper discusses the appropriateness of these targets as well as questioning whether they are achievable. The results of a questionnaire survey of 595 residents of Hong Kong, designed to elicit people's attitudes to cars and public transport, are analysed. It is concluded that unless the government does more to curb car ownership and use, rail targets will have little chance of being achieved.     

Distribution of the transit tax burden in five U.S. metropolitan areas

As transit subsidies increased twelve-fold in the United States between 1970 and 1980, metropolitan areas responded in very different ways to the challenge of financing burgeoning transit costs. The variety of approaches to transit finance has led to variation in the income-redistributive impacts of taxation. This paper reports on the results of disaggregate analysis of transit tax incidence in Chicago, Portland, northern New Jersey, San Antonio, and Phoenix. In cases where alternative tax shifting assumptions can be made, a range of tax burden distributions is calculated. Causes of the variation in redistributive impact are discussed. The analysis concludes by comparing the regressivity of financing transit through higher fares with the regressivity of taxes needed to support subsidies.     

Does transport help people to gain employment? A systematic review and meta-analysis of the empirical evidence

ABSTRACT

The role of transport in providing access to employment has received considerable attention. Since transport policies may be motivated by assumed effects on employment probability outcomes, it is important to establish the nature of the relationship between transport and employment outcomes. While the majority of the empirical evidence suggests a positive association, it is not conclusive or consistent and often shows mixed results. To address this confusion, our study has systematically reviewed this evidence base and synthesised it through meta-analysis. We first identified 93 studies that quantitatively assessed the impact of transport on employment outcomes. By systematically merging the empirical evidence, this study establishes a positive association between transport and employment outcomes, with varying effects for four identified categories of transport measures (or combinations thereof): car ownership, public transport access, commute times, and job accessibility levels. This positive association persists in studies that control for endogeneity between transport and employment, but a larger evidence base is needed to establish a more robust relationship, in particular for cities and smaller (rural) areas outside the US-context and with regard to public transport. We then selected 20 methodologically comparable studies for inclusion in the meta-analysis. Our meta-regression models clearly demonstrate that car ownership significantly increases individual employment probabilities, in particular among welfare recipients. Young drivers benefit from access to household cars when these are not in use by their parents, and they are more sensitive to the time and cost implications of longer commutes. While our systematic review suggests that better access to public transport and higher levels of job accessibility increases employment probabilities, meta-regression analysis requires more consistent transport measures. The findings in this study are important for policymakers in that they imply that job seekers may benefit from public policies targeted at improving their access to public transport, in particular for people without access to cars and in areas with fewer job opportunities.     

Decision-making for light rail

In transport literature there is an ongoing discussion on the potential of light rail in mitigating congestion and supporting mobility around urban centres. Throughout Europe and the United States, many policy makers see light rail as an interesting option to improve the accessibility of urban centres. The Dutch national government wanted to support swift light rail realization in a number of promising situations.Several projects gained support from the national government for implementation. However, the decision-making on a local level was not nearly as swift as expected and not in line with the promise. This paper presents an analysis of that perceived slowdown and shows that the approach of the national government with a strict focus on light rail and a detachment from the local processes has played an important role in the slowdown. It shows that light rail can very well be a solid option. However, its successful implementation is not solely dependent on light rail suitability for the mobility patterns in the region, but very much on the approach of the implementation of those supporting the option.     

New waves in transportation in North‐Eastern Europe

North‐Eastern Europe is a peripheral area around the Baltic Sea. In some parts i.e. Scandinavia high living standards including developed transport systems exist when at the same time rapid changes in the way of living in other parts ‐ Poland, the Baltic Countries and Russia ‐ are ongoing. Transport policies in the European Union are caught between demands for improved mobility and the concern on the environmental protection. In the former socialist countries the environmental issues are subdued by the demands for efficient transport. A fixed road and rail connection between Denmark and Sweden will change the transport geography of the western part of the area. Also the integration of the Baltic States and Poland to the Union will inside a few years change the economic and by that way also transport structure. After a short presentation of the geography and history the current European transport landscape will be described and current transport policies reviewed. Then some topics on the major changes during the last decennia as well as future studies will be presented. The paper draws heavily from the research projects ‐ SAMI, START and STEMM ‐ financed by the European Commission DGVII.     

The impact of transport policies on railroad intermodal freight competitiveness – The case of Belgium

This paper discusses the impact of three freight transport policies aiming to promote railroad intermodal transport in Europe, and examines the case of Belgium as a testing ground. These policies consist in subsidizing intermodal transport operations (such as in Belgium, to stimulate rail transport), internalizing external costs (as recommended by the European Union in order to foster cleaner modes), and adopting a system perspective when optimizing the location of inland intermodal terminals. The study proposes an innovative mixed integer intermodal freight location-allocation model based on hub-location theory and deals with non-linear transport costs in order to replicate economies of distance. Our analysis suggests that subsidizing has a significant impact on the volumes transported by intermodal transport, and, to a lesser extent, that optimizing terminal location increases the competitiveness of intermodal transport. On the other hand, according to our assumptions, internalizing external costs can negatively impact the promotion of intermodality. This finding indicates that innovative last-mile transports are needed in order to reduce the external impacts of drayage operations.     

Do the organizational forms affect passenger satisfaction? Evidence from Chinese public transport service

This paper presents a discussion on the relationship between organizational forms (including the ownership structure and the contractual practices) and passenger satisfaction of Chinese public transport service. To test this proposition, an original rich data set covering 4702 respondents and 58 public transport operators of 13 cities for the period 2013–2014 is used. We firstly estimate the passenger satisfaction based on customer satisfaction theory and PLS-SEM, and then take into consideration the mixed logit model to assess the effect between them. Conclusions drawn from the study are summarized as follows: ① The effect of organizational forms on the passenger satisfaction of public transport service is confirmed. ② Public transport services franchised to public ownership offer higher passenger satisfaction than those franchised to private ownership and mixed ownership. ③ Public transport services regulated by the management contracts incite more passenger satisfaction than those regulated by net cost contracts and gross cost contracts.     

Accelerating the transformation to a low carbon passenger transport system: The role of car purchase taxes,feebates, road taxes and scrappage incentives in the UK

The transition to a low carbon transport world requires a host of demand and supply policies to be developed and deployed. Pricing and taxation of vehicle ownership plays a major role, as it affects purchasing behavior, overall ownership and use of vehicles. There is a lack in robust assessments of the life cycle energy and environmental effects of a number of key car pricing and taxation instruments, including graded purchase taxes, vehicle excise duties and vehicle scrappage incentives. This paper aims to fill this gap by exploring which type of vehicle taxation accelerates fuel, technology and purchasing behavioral transitions the fastest with (i) most tailpipe and life cycle greenhouse gas emissions savings, (ii) potential revenue neutrality for the Treasury and (iii) no adverse effects on car ownership and use.The UK Transport Carbon Model was developed further and used to assess long term scenarios of low carbon fiscal policies and their effects on transport demand, vehicle stock evolution, life cycle greenhouse gas emissions in the UK. The modeling results suggest that policy choice, design and timing can play crucial roles in meeting multiple policy goals. Both CO₂ grading and tightening of CO₂ limits over time are crucial in achieving the transition to low carbon mobility. Of the policy scenarios investigated here the more ambitious and complex car purchase tax and feebate policies are most effective in accelerating low carbon technology uptake, reducing life cycle greenhouse gas emissions and, if designed carefully, can avoid overburdening consumers with ever more taxation whilst ensuring revenue neutrality. Highly graduated road taxes (or VED) can also be successful in reducing emissions; but while they can provide handy revenue streams to governments that could be recycled in accompanying low carbon measures they are likely to face opposition by the driving population and car lobby groups. Scrappage schemes are found to save little carbon and may even increase emissions on a life cycle basis.The main policy implication of this work is that in order to reduce both direct and indirect greenhouse gas emissions from transport governments should focus on designing incentive schemes with strong up-front price signals that reward ‘low carbon’ and penalize ‘high carbon’. Policy instruments should also be subject to early scrutiny of the longer term impacts on government revenue and pay attention to the need for flanking policies to boost these revenues and maintain the marginal cost of driving.     

Patterns of car usage and restraint modelling

Transport demand forecasting procedures have traditionally employed household based modal split models implicitly assuming a selection of mode for each trip based on relative generalised cost. A detailed examination of the trip patterns of a sample of household in West Yorkshire shows that in fact there is little discretionary choice of public transport; public transport trips in car owning households generally being explained in terms of the specific unavailability of the car for such trips. Two versions of a category analysis model for modal split are based on this observation and applied to household data for Glamorgan and Monmouthshire to show that such a procedure is workable and produces results comparing favourably with traditional approaches. The likely implications of three types of restraint policy are examined and it is concluded that the existing interdependence in trip patterns and modal choice within the household is of great significance in determining their effects. In particular it appears that positive attempts to increase vehicle occupancy at the peak are likely to be more favourable to public transport finances than the more negative policies to restrain use of the car for journey to work, or second car ownership.