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 passenger transport in the United States and Europe: a comparative analysis of public policies

This is the second part of a two‐part series that examines recent developments in urban passenger transport in the United States and Europe, focusing on the roles and impacts of the public sector as these have varied by country and over time. The first part of the series described public policies for roadway systems and private car use, whereas this second part concentrates on public transport. After a review of demand and supply trends, the article evaluates government policies in terms of public vs private ownership and operation, public regulation, financing responsibility by government level, types and amounts of subsidy, and impacts of ownership, regulation, and financing arrangements on costs and productivity. This second part concludes with an overall comparison between Europe and the United States, and considers how Europeans and Americans might learn from each other's successes and mistakes in order to improve transport policies.     

Demand for buses in Japanese medium sized cities

The number of bus passenger has been decreasing in Japan since 1969. The increase in car ownership and development in urban rapid rail network has deprived bus service of passengers. The bus industry has suffered from depression for the last twenty years. However, many bus routes are still operated commercially. The amount of external subsidies is not large. The industry is under strict regulation. The common way for bus operators has been to increase fares rapidly in order to keep their break even condition. The first half of the paper describes present circumstances of the bus industry in more details. Then the second half of the paper treats the estimation of the effect of each factor on bus demand by using pooled data in Japanese medium sized cities. The results suggest that the increase in car ownership has had a crucial effect on local public transport demand and is likely to continue to do so.     

Estimating the inefficiency in the Norwegian bus industry from stochastic cost frontier models

A stochastic cost frontier function based on data from 170 of the 175 Norwegian subsidized bus companies is estimated under two alternative presumptions regarding the distribution of the inefficency among the bus operators. When the inefficiency is assumed to be half-normally distributed, the average inefficiency in the industry is estimated to be 13.7 per cent. This calculated value is nearly halved (7.2 per cent) when the exponential distribution is applied, while the ranking of the companies according to inefficiency is unchanged. By regressing the estimated inefficiency values for each company on some exogenous variables describing its ownership structure and the subsidy policy which it faces, it is seen that inefficiency of the companies which negotiate with the public authorities over the subsidy amounts is slightly higher than the inefficiency of the companies which face a subsidy policy based on cost norms. Our analysis gives, however, no significant differences in the efficiency between privately owned bus companies and publicly owned bus operators, and shows only minor economies of scale.     

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.     

Efficiency of the public and private bus transport sectors in Sri Lanka

The public and private bus sectors are in direct competition in most bus routes in Sri Lanka. Consequently, Sri Lanka is an ideal location to study their relative efficiencies. Five dimensions of transit performance are analyzed for comparing the relative efficiencies of the two sectors: cost efficiency, labour efficiency, input efficiency, revenue generation and safety. Productivity ratios are utilized for measuring the dimensions of transit performance. The productivity ratios for cost efficiency, labour efficiency in terms of total staff, input efficiency, revenue generation and safety in terms of accidents per bus showed the private bus transport sector to be more efficient than the public bus transport sector.     

The organization of public transport in Denmark

The sharp contrast between the public transportation needs of Greater Copenhagen and provincial Denmark has led to significant differences in policy and organizational structure for public transport in the two regions. Outside Copenhagen the period 1965–1975 saw a rapid decline in rural public transport supply and a rise in special services (school buses, etc.). A 1978 law requiring county councils to prepare comprehensive regional transport plans reversed this trend. Most counties now have economically responsible transport corporations which contract with public and private operators for service. School routes have been opened, train and bus schedules have been coordinated and zonal fare systems have been introduced. In Greater Copenhagen urban sprawl has promoted a gradual public take-over of most transport services in the region, culminating in an almost all-pervasive “public works” type of transport corporation under regional authority in the late 1970s.     

Structural equation modeling for national travel demand: an examination of the relationships between communication modes

This paper examines the relationships among different transportation modes, and between transportation and telecommunications, by applying the structural equation modeling (SEM) technique. For this purpose, we collected and compiled time series data on national travel demand, and socioeconomic and telecommunications conditions in Taiwan, and built national travel demand models using SEM. The estimation results show that the relationship between telecommunications and transportation demand (either car ownership or public transportation) is more complementary than substitutional. Moreover, car ownership is a type of inelastic necessity good, and its relationship with public transportation is more substitutional than complementary. Finally, among the three public transportation modes – rail, bus and domestic air – it is found that air is weakest in terms of competitive power. From the viewpoint of long-term forecasting trends, the bus holds its competitive power in comparison with other public transportation modes and would not be replaced in the future.     

An analysis of public bus transit performance in Indian cities

Maintaining and enhancing public transit service in Indian cities is important, to meet rapidly growing mass mobility needs, and curb personal motor vehicle activity and its impacts at low cost. Indian cities rely predominantly on buses for public transport, and are likely to continue to do so for years. However, the public bus transit service is inadequate, and unaffordable for the urban poor. The paper explores the factors that contribute to and affect efforts to improve this situation, based on an analysis of the financial and operational performance of the public bus transit service in the four metropolitan centres and four secondary cities during the 1990s. Overall, there were persistent losses, owing to increasing input costs and declining productivity. The losses occurred despite rapidly increasing fares, and ridership declined. The situation, and the ability to address it, is worse in the secondary cities than the metropolitan centres. We suggest a disaggregated approach based on the needs and motivations of different groups in relation to public transit, along with improved operating conditions and policies to internalize costs of personal motor vehicle use, to address the challenge of providing financially viable and affordable public bus transit service.     

Modelling car trip generations for UK residential developments using data from TRICS

Abstract

This paper models trip generation for a cross-section of residential developments around the UK. Consistent with recent literature, the empirical model tests whether trip making patterns for residential developments are independent of car ownership and finds that trip generation is dependent upon car ownership socio-economic factors and site-specific characteristics, in particular land-zone type (e.g. town centre, out of town, etc.). However, public transport services are not found to have a significant relationship with trip generation; consequently, a policy implication of the results is that increasing bus services to residential developments is not associated with a reduction in generated trips.     

Estimating the demand for urban bus travel

The disadvantages of conventional transportation study models, in particular their large data requirements and their weaknesses in dealing with changes in trip generation rates have led to a need for a simple model that can quickly and at low cost examine alternative public transport strategies.This paper investigates simple economic models of bus demand, examines alternative variables that can be used and discusses some alternative model forms. It demonstrates the results of a model using data from twelve urban bus operators in Britain and compares the results with those from other types of study. The model utilises fare and service quality elasticities to explain the decline in passengers on urban bus services, and derives an average elasticity with respect to fare changes of –0.31 and with respect to service quality changes of +0.62. It is estimated that fare rises accounted for 13% of the 43% decline in passengers over the last fifteen years, vehicle mileage reductions for 14.3% and that only 15.7% was due to such factors as rising car ownership which are often given as the cause of declining bus patronage.The results, by showing that passengers are far more sensitive to changes in service than they are to fare rises, are a useful guide to the broader public transport policy issues, and the paper concludes that the model does provide a useful method of forecasting public transport demand at a strategic level. Further work is needed, however, to establish more accurate forecasts for different types of passenger and studies are now being undertaken to establish these and to construct an operational forecasting model that can be applied with only limited data requirements     

From e-bike to car: A study on factors influencing motorization of e-bike users across China

Household car ownership has risen dramatically in China over the past decade. At the same time a disruptive transportation technology emerged, the electric bike (e-bike). Most studies investigating motorization in China focus on macro-level economic indicators like GDP, with few focusing on household, city-level, environmental, or geographic indicators, and none in the context of high e-bike ownership. This study examines household vehicle purchase decisions across 59 cities in China with broad geographic, environmental, and socio-economic characteristics. We focus on a subset of households who own e-bikes and rely on a telephone survey from an industry customer database. From these responses, we estimate two three-level hierarchical choice models to assess attributes that contribute to (1) recent car purchases and (2) the intention to buy a car in the near future. The results show that the models are dominated by household characteristics including household income, household size, household vehicle ownership, number of licensed drivers and duration of car ownership. Some geographic, environmental and socio-economic factors have significant influences on car purchase decisions. Only two city-level transportation variable have an effect – higher taxi density and higher bus density reducing car purchase. Cold weather, population density gross domestic product per capita positively influence car purchase, while urbanization rate reduces car purchase. Because of supply heterogeneity in the data set, described by publicly available urban transportation data, this is the first study that can include geographic and urban infrastructure differences that influence purchase choice and suggests potential region-specific policy approaches to managing car purchase may be necessary.     

Life cycle ownership cost and environmental externality of alternative fuel options for transit buses

This paper assesses alternative fuel options for transit buses. We consider the following options for a 40-foot and a 60-foot transit bus: a conventional bus powered by either diesel or a biodiesel blend (B20 or B100), a diesel hybrid-electric bus, a sparking-ignition bus powered by Compressed Natural Gas (CNG) or Liquefied Natural Gas (LNG), and a battery electric bus (BEB) (rapid or slow charging). We estimate life cycle ownership costs (for buses and infrastructure) and environmental externalities caused by greenhouse gases (GHGs) and criteria air pollutants (CAPs) emitted from the life cycle of bus operations. We find that all alternative fuel options lead to higher life cycle ownership and external costs than conventional diesel. When external funding is available to pay for 80% of vehicle purchase expenditures (which is usually the case for U.S. transit agencies), BEBs yield large reductions (17–23%) in terms of ownership and external costs compared to diesel. Furthermore, BEBs’ advantages are robust to changes in operation and economic assumptions when external funding is available. BEBs are able to reduce CAP emissions significantly in Pittsburgh’s hotspot areas, where existing bus fleets contribute to 1% of particulate matter emissions from mobile sources. We recognize that there are still practical barriers for BEBs, e.g. range limits, land to build the charging infrastructure, and coordination with utilities. However, favorable trends such as better battery performance and economics, cleaner electricity grid, improved technology maturity, and accumulated operation experience may favor use of BEBs where feasible.     

Evaluating efficiency in the Norwegian bus industry using data envelopment analysis

This paper focuses on the performance of Norwegian bus companies subsidized by the government. The performance is evaluated from a productive efficiency point of view. The framework is that of a deterministic non-parametric Data Envelopment Analysis (DEA) approach to efficiency measurement. In this context several important issues are addressed: efficiency rankings, distribution and scale properties in the bus industry, potentials for efficiency improvements in the sector, the impact of ownership, area of operation and scope, and ways of improving efficiency in the sector. The findings show that the average bus company exhibits increasing return to scale in production of its services. The extent of such returns however vary, with size and is more prevalent among smaller companies. The average bus company is found to have a considerable input saving potential of about 28 percent. Neither economies of scope nor company ownership are found to have an influence on company performance. It is suggested that geographical factors need a closer attention in future research. The implications of DEA results are discussed and concluding remarks offered.     

Changes in multi-mode bus transit efficiency, 1988–1992

This paper examines the claim that US bus transit productivity has declined in recent years. It does so with reference to a piecewise-linear best-practice (DEA) production frontier, computed for multi-modal bus transit between 1988 and 1992. Efficiency is measured both by a Russell (static) and Malmquist (dynamic) measure of productivity change. The principal finding is that, overall, bus transit efficiency has improved slightly over the period.     

Economies of scale in bus transit: A review of concepts and evidence

The issue of returns of scale in bus transit continues to be a subject of debate among transportation analysts. From a public policy perspective, returns to scale are relevant to many policy areas such as transit service pricing, cost allocation, productivity and organization of the industry. Empirical studies conducted during the past decade have generated conflicting results. Constant, decreasing and increasing returns to scale have all been reported.This paper identifies the sources of these conflicting results: confusion regarding the concept of scale economies, variable definition, assumptions regarding the shape of the cost function, and certain characteristics of the data base. The paper also discusses the theoretical concept of scale economies, and an interpretation of the concept for bus transit is presented. It is concluded that recent studies which have utilized generalized cost functions more accurately represent the economic structure of bus transit, and provide a stronger basis for transit policy analysis.     

Modelling the potential for cycling in access trips to bus,train and metro in Rio de Janeiro

Most studies that address the integration of cycling and public transport (PT) focus on developed countries and deal with multi-modal bicycle-train trips. Little is known about the integration of cycling and other main modes such as bus and metro, especially in developing countries, where entirely different socio-economic and trip making conditions prevail. The aim of this study is to model the propensity of current PT users to shift to the bicycle in access trips to bus stops, train and metro stations in Rio de Janeiro, Brazil. Interviews were conducted to collect data on the socio-economic characteristics of the interviewee, trip and spatial characteristics and self-reported barriers and motivators for bicycle use. Two binary logit models were estimated to predict the main factors affecting the propensity to use a bicycle as feeder mode to PT. The results show that socio-economic characteristics as well as barriers and motivators are important factors to explain propensity for bike and ride. The barriers’ model reveals that personal constraints, living too close to the PT boarding point, current parking conditions and public safety play a role. For the motivators’ model, changing home location, owning a bicycle, implementation of cycle ways and improvement in parking conditions are explanatory. Policy recommendations are formulated to increase bicycle ownership and improve cycling infrastructure.     

Car ownership,travel and land use: a comparison of the US and Great Britain

This paper conducts an international comparative analysis of relationships between car ownership, daily travel and urban form. Using travel diary data for the US and Great Britain, we estimate models of car ownership and daily travel distance. Both a structural model with daily travel conditional upon car ownership and a reduced form model for daily travel, excluding car ownership, are estimated. Model results are similar, and show that differences in travel are explained by (1) differences in demographics between the two countries; (2) lower household income in Great Britain; (3) country specific differences in costs of car ownership and use, transport supply and other factors we have not been able to control. We find that metropolitan size affects travel only in the largest metropolitan areas of the US. Daily travel distance is inversely related to local population density, but the effect is much stronger for the US than Great Britain. We conclude that higher transport costs in Great Britain promote economizing behavior, which in turns leads to more consumption of local goods and services and more use of alternative transport modes.     

Analysis of vehicle ownership evolution in Montreal,Canada using pseudo panel analysis

This paper employs a pseudo-panel approach to study vehicle ownership evolution in Montreal region, Canada using cross-sectional origin–destination survey datasets of 1998, 2003 and 2008. Econometric modeling approaches that simultaneously accommodate the influence of observed and unobserved attributes on the vehicle ownership decision framework are implemented. Specifically, we estimate generalized versions of the ordered response model—including the generalized, scaled- and mixed-generalized ordered logit models. Socio-demographic variables that impact household’s decision to own multiple cars include number of full and part-time working adults, license holders, middle aged adults, retirees, male householders, and presence of children. Increased number of bus stops, longer bus and metro lengths within the household residential location buffer area decrease vehicle fleet size of households. The observed results also varied across years as manifested by the significance of the interaction terms of some of the variables with the time elapsed since 1998 variable. Moreover, variation due to unobserved factors are captured for part-time working adults, number of bus stops, and length of metro lines. In terms of the effect of location of households, we found that some neighborhoods exhibited distinct car ownership temporal dynamics over the years.