Organisation form,scale effects and efficiency in the British bus industry

The British bus industry is examined in light of fundamental reform in ownership and regulation. The industry is divided between privately and publicly owned companies, with the private sector further split between publicly listed owned subsidiaries and private limited companies. The change in ownership structure since privatization is analysed, and Data Envelopment Analysis used to estimate the extent of returns to scale and technical efficiency, as defined by one output and three inputs. Technical efficiency is further divided into managerial and organisational components, and comparisons made of median efficiency levels using a Mann Whitney statistical test.Increasing returns to scale are found for smaller companies, but the size of such returns varies with the company type. A minimum efficiency scale is identified, with constant returns above this point. A high degree of technical inefficiency is found to be present in the industry, which may initially suggest a lack of competition and reflect the oligopolistic structure that has emerged since privatisation. Privately owned companies are identified as more technically efficient, however this is due to significantly less organisational constraints, and considerable managerial inefficiency exists in this group. It is finally concluded that the high level of inefficiency may not reflect ownership, but rather industry characteristics, and rather than a lack of competition may be indicative of wasteful competition. It is suggested therefore there may be a need to make the market contestable rather than openly competitive.     

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.     

Technical characteristics and efficiency of urban bus companies: The case of Spain

The aim of the present study is twofold. First, to provide new information concerning the technical characteristics of urban bus companies on the basis of a sample of medium and large-size cities in Spain. Second, to analyze the degree of efficiency of those companies and to quantify the reasons for this efficiency. The results should be useful in evaluating possible changes in public policies relating to urban transport, specifically changes in the way the market is organized and in pricing.The analysis is carried out by estimating a cost function. The sample is made up of a panel data set consisting of observations of nine Spanish companies that operated during the period 1983–1995. The specified functional form is translogarithmic. The output unit of measure adopted is bus*kms run. The cost function includes the network length for each company, thus permitting evidence concerning economies of density and economies of scale.The use of panel data allows us to estimate the cost function, taking into account that each company is affected by the specific characteristics of each individual city, the different features of the network in question and by different levels of efficiency. The economies of scale have been calculated, taking into account that the features of the network and of the city – represented by their specific individual effect – will vary with the company's level of output.Finally, an analysis is made of the relative productive efficiency of the companies, as well as of the variables likely to influence that efficiency.     

Technical efficiency measurement and explanation of French urban transit companies

The performance of a sample of French urban transit companies is evaluated using a broad selection of nonparametric reference technologies for two specifications of the production process. In particular, the variable returns to scale Data Envelopment Analysis (DEA) models with either strong or weak disposability in both inputs and outputs, and the Free Disposal Hull (FDH) are applied. An extensive comparison of the resulting radial output efficiency measures yields the following major methodological conclusions. First, the location of the efficiency distributions differs substantially depending on the methodology and especially on the output specification considered. The latter differences vanish if the impact of outliers is eliminated. Second, convexity has a stronger influence on the efficient-inefficient dichotomy than allowing for congestion by means of a weakly disposable DEA model. For policy purposes, these efficiency distributions are explained using a Tobit model. The findings corroborate results reported elsewhere: the relevance of ownership, the use of risk-sharing incentives in contracting, the harmful impact of subsidies, etc. Furthermore, the network structure seems to account for some differences in performance. Finally, a novelty in the urban transit context is the indirect monitoring effect of the French earmarked transportation tax.     

Comparison of data envelopment analysis and deterministic parametric frontier approaches: an application in the Norwegian road construction sector

This paper analyzes efficiency in the Norwegian road sector by using two competing methods. The first is Data Envelopment Analysis (DEA), while the second is Deterministic Frontier Analysis (DFA) with a Cobb‐Douglas kernel specification. Both approaches show similarities with respect to efficiency distribution. The rock‐blasting sectors potential for efficiency improvement is in the range 19–59 percent. Both approaches demonstrate decreasing return to scale properties for the average unit. There is a significant correlation between size and efficiency indicating that larger units perform better than smaller ones. Precautionary blasting mainly performed in densely populated areas is also found to explain much of the variations in efficiency scores. Any policy implication should therefore carefully examine exogenous factors. The main difference between the two approaches, which can be explained by the number of parameters to be determined, concerns level of scores rather than their distribution. However, there are arguments that advocate DEA rather than DFA in the rock‐blasting sector.     

On measuring the efficiency of public enterprises: Bus operating companies in the San Francisco Bay area

It is important to be able to say whether or not an enterprise in the public sector is efficient and to measure this aspect of its performance. Public enterprises sometimes have legitimate reason to treat efficiency as secondary, but they also may resist efficiency measurement for other reasons.Statistical cost functions containing experience from similar enterprises provide useful yardsticks for public administrators. A purported cost function can be inadequate, however, as is shown in one example.Statistical cost functions allow comparison of bus properties by giving a range within which costs of an efficient property should fall. While random influences cannot be excluded, if observed costs fall outside two standard errors of prediction, there is a good case to say the property is inefficient. The usefulness of the standard error of prediciton as a measure of precision is explored.Nationally estimated cost functions were used to investigate the bus operations only of three San Francisco companies. Two were found within sampling error, one was significantly more costly on its motorbus operations than average experience in the nation. A closer look would then be in order by those funding this property. Several years' experience is explored showing changes over time as well as across companies.This material was prepared with the support of National Science Foundation Grant No. GI-37181 to the University of California. The results and views are the independent product of university research and are not necessarily concurred in by the National Science Foundation. The Institute of Urban and Regional Development at U.C. Berkeley facilitated research herein.     

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.     

Measuring supply chain efficiency based on a hybrid approach

Supply chain management has a tremendous impact on the success of a company. One of the critical issues for gaining competitive advantages for companies is improving supply chain performance. Most studies about the application of Data Envelopment Analysis (DEA) Supply chain models do not identify the benchmarking units for inefficient supply chains. On the other, measuring the short run and long run of the supply chain efficiency is another challenge for decision makers in supply chain management. Hence, we propose a methodology of DEA for measuring of the supply chain. We integrated two approaches as special cases of the hybrid model and compare the short and long run strategies of supply chain and can be identified benchmarking.     

Organizational and Ownership Transformation in Poland’s Urban Transport Companies

Abstract

This paper seeks to reconstruct the organizational and ownership transformation involving Poland’s urban transport that companies passed through after 1990. Data collected from various sources (above all the Internet, including the Bulletins of Public Information) were used to establish the degree of advancement of the transformation processes. Despite the passage of nearly two decades since the new economic reforms were launched, the privatization processes involving enterprises of municipal origin are not well‐advanced. There is not a single private company among the organizers of urban transport. Instead, an absolute domination of budgetary‐sphere entities may be noted. Furthermore, there are seven transport municipal unions. Among the operators (carriers) public ownership remains dominant in the form of single‐person local authority companies, local government companies, municipal union ownerships, municipal companies as well as budgetary units. Privatization processes have encompassed fewer than 10% of all operators in the form of companies with foreign participation, workers’ companies and companies with Polish non‐public sector participation. Moreover, in 20 localities urban transport is supplied by multi‐trade municipal services enterprises (as of end‐2008). Thus, transformation processes, though started earlier than in the case of Poland’s State Road Transport coach companies, are much less advanced.     

Towards a common measure of greenhouse gas related logistics activity using data envelopment analysis

Monitoring company emissions from freight transport is essential if future greenhouse gas (GHG) reductions are to be realised. Modern economies are characterised increasingly by lower density freight movements. However, weight-based measures of freight transport activity (tonne-kilometre, tonnes lifted) are not good at describing volume-limited freight. After introducing the need for performance measurement, the problem of benchmarking is outlined in more detail. A context-dependent undesirable output data envelopment analysis (DEA) model, designed to be sensitive to business context, is then tested on a simulated set of fleet profiles. DEA can produce more consistent measures of good-practice, compared to ratio-based key performance indicators (KPI), providing emission reduction targets for companies and an aggregate reporting tool.     

Yardsticks on the road: Regulatory contracts and cost efficiency in the Norwegian bus industry

In this paper a cost frontier model is estimated for an eleven-year panel of Norwegian bus companies (1136 company-year observations) using the methodology proposed by Battese and Coelli (1995). The main objective of the paper is to investigate to what extent different type of regulatory contracts affect company performance. The panel model proposed by Battese and Coelli (1995) allow for year/company specific efficiency measures to be estimated. Thus, unobservable network or other time invariant characteristic of the operating environment can be controlled for by analyzing the dynamics of measured productivity across time for firms regulated under different types of contracts, rather than relying solely on variations across companies during one time period. Therefore, the paper offers methodological and data advantages over previous work on this subject. The main and robust result of the paper is that the adoption of a more high-powered scheme based on a yardstick type of regulation significantly reduces operating costs. The results contained in this paper thus confirms theoretical predictions regarding the incentive properties of high powered incentive schemes and in particular the dynamic benefits of yardstick competition.     

Competitive tendering versus performance-based negotiation in Swiss public transport

The purpose of this study is to assess differences in the levels of cost efficiency of bus lines operated under competitively tendered contracts and performance-based negotiated contracts. Following the revision of the Swiss railways act in 1996, regional public authorities were given the choice between two different contractual regimes to procure public passenger transport services. We directly compare the impact of competitive tendering and performance-based negotiation by applying a stochastic frontier analysis to the complete dataset of bus lines (n = 630) operated by the main Swiss company (Swiss Post) at the same time (in 2009) throughout the country. The overall results show that the differences in the levels of cost efficiency between the two contractual regimes are not significant. Our findings are in line with recent evidence of cost convergence between competitive tendering and performance-based negotiation, and suggest that the practice of using both contractual regimes is challenging for the operators in terms of competitive pressure. The threat of competitive tendering may have a disciplining effect on negotiation since it prevents bus companies from bargaining inadequate rents and inducing asymmetric information advantages.     

Acquisition,efficiency and scale economies: An analysis of the British bus industry

The British Bus industry has undergone considerable transformation since privatization. Five major operators have emerged to dominate the market, a position almost exclusively attained through acquisition. This paper reviews the economies of scale argument commonly cited for this change and gives an overview of the acquisition process. It questions whether this argument gives a complete explanation for this industry development. For 58 individual companies, the level of technical efficiency attributable to firms operating at or near the optimum level of output is examined over 5 years to determine if mergers in practice have resulted in scale economies. Technical efficiency is estimated using data envelopment analysis, under assumptions of constant and variable returns to scale. Efficiency scores are then regressed on a time trend and a merger dummy to test whether acquired firms' efficiency has significantly improved above the average. It was found that over the period, efficiency had improved. This improvement, however, cannot be wholly attributed to the achievement of economies of scale. More specifically, there has been an improvement in the internal efficiency of acquired firms and some scale economies within group companies, the latter of which may have resulted from the eradication of competition.     

A column generation algorithm for the bus driver scheduling problem

Bus driver scheduling aims to find the minimum number of bus drivers to cover a published timetable of a bus company. When scheduling bus drivers, contractual working rules must be enforced, thus complicating the problem. In this research, we develop a column generation algorithm that decomposes this complicated problem into a master problem and a series of pricing subproblems. The master problem selects optimal duties from a set of known feasible duties, and the pricing subproblem augments the feasible duty set to improve the solution obtained in the master problem. The proposed algorithm is empirically applied to the realistic problems of several bus companies. The numerical results show that the proposed column generation algorithm can solve real‐world problems and obtain bus driver schedules that are better than those developed and used by the bus companies. Copyright © 2016 John Wiley & Sons, Ltd.     

Efficiency measurement of bus routes and exogenous operating environment effects on efficiency

This study develops an independent efficiency measurement model framework of bus routes, so as to treat preferably the heterogeneous outputs in a data envelopment analysis (DEA)-based efficiency measurement. It then introduces four new exogenous operating environment factors at the microscopic level of bus routes, and applies the three-stage DEA approach to incorporate operating environment effects and statistical noise into the efficiency measurement framework. The main purpose is to measure impartially the managerial efficiency of bus routes, purged of operating environment effects and statistical noise, and additionally to investigate the operating environment effects on efficiency. An empirical analysis, based on 39 routes operated in Jiangyin City, China, is presented. The principal finding is that the adoption of the independent efficiency measurement model framework is reasonable and has many virtues. Moreover, the proposed approach could substantially provide decision support both for regulators and for producers of bus services. In addition, the operating environment does indeed significantly affect operating efficiency and quality efficiency, especially the latter.     

Have Emission Control Areas (ECAs) harmed port efficiency in Europe?

Ports in the European Union and North America have enforced environmental regulations on controlling SO_x and NOx emissions from ships in their coastal areas known as Emission Control Areas (ECAs). This study uses two-stage approaches to examine whether ECA regulations impact the efficiency of ports operating in such areas. First, port efficiencies are estimated using non-radial slacks-based measure (SBM) Data Envelopment Analysis (DEA) models. The efficiency scores estimated by the SBM DEA models are then regressed on explanatory variables, including the ECA factor, and macroeconomic indicators using bootstrapped truncated regression (BTR) models. Panel data is collected on countries in EU ECAs and non-ECAs regarding such input variables as capital and labor, with cargo as an output variable. The results indicate that ECA regulations can harm port efficiency, reflecting concerns of policy-makers and industrial managers: the average efficiency loss from an ECA designation amounts to 0.058–0.066 on a scale of 0–1, accounting for a 15–18% loss from ECA ports’ average efficiency scores.     

Measuring the Cost Effectiveness of Multimode Bus Transit in the Presence of Accident Risks

Abstract

This study employs the directional graph distance function and the multiactivity data envelopment analysis (DEA) approach, which incorporates both desirable and undesirable outputs, in order to provide a more complete representation of the multimode bus production technology from which environmentally and risk-sensitive cost effectiveness measures can be generated. We treat accident cost as the risky output in the sense that we wish to increase desirable outputs and decrease risky output and inputs. The approach is applied to the problem of measuring the cost effectiveness of 24 bus companies in Taiwan. An empirical illustration suggests that the overall cost effectiveness rankings turn out to be very sensitive to whether or not the graph multiactivity DEA approach is adopted. This implies that the conventional DEA cost effectiveness measure may be seriously misleading if it ignores the cost effectiveness of organizations that carry out various activities whilst sharing common resources.     

Efficiency measurement of selected Australian and other international ports using data envelopment analysis

Available studies have not provided a satisfactory answer to the problem of making international comparisons of port efficiency. This study applies data envelopment analysis (DEA) to provide an efficiency measurement for four Australian and twelve other international container ports. While DEA has been applied to a wide number of different situations where efficiency comparisons are required, this technique has not previously been applied to ports. The DEA technique is useful in resolving the measurement of port efficiency because the calculations are non-parametric, can handle more than one output and do not require an explicit a priori determination of relationships between output and inputs, as is required for conventional estimation of efficiency using production functions. The ports of Melbourne, Rotterdam, Yokohama and Osaka are found to be the most inefficient ports in the sample, based on constant and variable returns to scale assumptions, mainly due to the enormous slack in their container berths, terminal area and labor inputs. The study also draws some policy implications for ports and recommends certain areas for future research.     

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.     

Assessing the technical efficiency, service effectiveness, and technical effectiveness of the world’s railways through NDEA analysis

This paper presents an approach to include both the unstorable feature of transportation service and the technological differences within railway companies in efficiency and effectiveness measurements. We explore efficiency and effectiveness for a group of 40 global railways in the year 2002, using traditional data development analysis (TDEA) and network data development analysis (NDEA). Comparing the results obtained from the NDEA model with those from the TDEA indicate that performance measures are quite different in terms of the magnitude, and even using different DEA type models to evaluate railway system performance does not distort the ranking of their performance. We also analyze the inter-related effects among three performance measures, finding that transportation service characteristics have positive effects on the evaluation of performance. Generally speaking, the NDEA model provides deeper insight regarding the sources of inefficiency and process-specific guidance to railway managers so as to help them improve their railway’s performance.