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Cost efficiency in Swedish public transport
Swedish National Road and Transport Research Institute, Society, environment and transport, Transport economics, TEK.ORCID iD: 0000-0002-9219-8493
2016 (English)In: Research in Transportation Economics, ISSN 0739-8859, E-ISSN 1875-7979, Vol. 59, p. 123-132Article in journal (Refereed) Published
Abstract [en]

Over the last couple of years, costs in Swedish public transport have increased substantially, and there is little knowledge in what affects cost efficiency. This study aims at determining how different contractual and environmental factors affect cost efficiency, and whether cost efficiency differs between Public Transport Authorities (PTA). A stochastic frontier analysis is conducted using contract-level data for the 21 PTAs and year 2013

The main findings are that cost efficiency is lower if a contract is operating in areas with high population density, or if the traffic is supplied by a publicly owned operator without using competitive tendering. Furthermore, no major differences in cost efficiency are found across PTAs, with the exception of the counties of Stockholm and Skåne, both counties with high population density, and the county of Västmanland, where all public transport is provided without competitive tendering. The finding of lower cost efficiency in high-density areas calls for further investigation into why this is. Potential explanations are the need for higher peak capacity, or more complex transportation systems. Finally, usage of direct-awarding of public transport should be clearly motivated, as this affects cost efficiency negatively.

Place, publisher, year, edition, pages
2016. Vol. 59, p. 123-132
Keywords [en]
Public transport, Cost, Economic efficiency, Transport authority, Contract, Competition, Population
National Category
Economics
Research subject
00 Road: General works, surveys, comprehensive works, 02 Road: Economics; 10 Road: Transport, society, policy and planning, 111 Road: Public transport
Identifiers
URN: urn:nbn:se:vti:diva-11337DOI: 10.1016/j.retrec.2016.05.009ISI: 000391074400015Scopus ID: 2-s2.0-84992697302OAI: oai:DiVA.org:vti-11337DiVA, id: diva2:1049602
Available from: 2016-11-25 Created: 2016-11-24 Last updated: 2017-12-12Bibliographically approved
In thesis
1. Competition in Public Transport: Essays on competitive tendering and open-access competition in Sweden
Open this publication in new window or tab >>Competition in Public Transport: Essays on competitive tendering and open-access competition in Sweden
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The results of this work show that the cost efficiency of tendered bus services is similar across all Swedish counties, except for the more high-density counties where efficiency is lower. Considerably lower efficiency is also found for contracts with services run in-house by the Public Transport Authority (PTA), compared to when the same service is run by a private actor. With respect to the competitive environment, it was found that many contract design factors have little or no effect on the number of bids that the PTA sees in their tenders. No measure that could be imposed by a single PTA was found to increase the total number of bidders by more than 0.5 bidders. However, the results suggest that PTAs as a collective could try to avoid tendering too many contracts at the same time because this was shown to reduce participation by up to about two bidders. In addition, these studies show that the local competitive environment is important for the PTAs to consider. The way in which contract areas are defined will also affect the participation rate as operators were found to participate in tenders to a lower extent the farther their workplaces are from the contract area. While larger operators appear to be less sensitive with respect to such distances, the fact that smaller operators are, and that they often bid as one unit as members of cooperation companies, makes the competitive environment important. The results suggest that depots could be included in the contract to stimulate participation, but this is by no means the only nor an easy solution.

This thesis has also analyzed the entry made in 2015 by MTR Express (MTR) on the Stockholm-Gothenburg railway line. The overall conclusion is that customers are indeed facing lower prices one and a half years after the entry. MTR's prices are on average 100 SEK lower than the incumbent SJ's prices. Furthermore, the analysis shows that the incumbent’s prices have also gone down, by almost 13 percent, following the entry.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2017. p. 26
Series
TRITA-TSC-PHD ; 17-005
Keywords
Public transport, Contract, Tender, Bus, Economic efficiency, Competition, Location, Transport operator, Depot (transp), Impact study, Railway, Line (transp)
National Category
Economics Transport Systems and Logistics
Research subject
00 Road: General works, surveys, comprehensive works, 02 Road: Economics; 10 Road: Transport, society, policy and planning, 111 Road: Public transport; J00 Railway: General works, surveys, comprehensive works, J13 Railway: Economics
Identifiers
urn:nbn:se:vti:diva-12491 (URN)978-91-88537-05-8 (ISBN)
Public defence
2017-12-08, Kollegiesalen, Brinellvägen 8, Kungl Tekniska Högskolan, Stockholm, 14:00 (English)
Opponent
Supervisors
Available from: 2018-02-09 Created: 2017-12-12 Last updated: 2018-05-17Bibliographically approved

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Vigren, Andreas

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