Profiling of Public Transport Authorities & Operators

Task 1.3. Profiling of Public Transport Authorities & Operators

Analysis of their Needs: Typologies and Parameters

The general public expects collective transport in cities to  to be able to adapt to mobility needs that are connected to modern city life styles. Like other fields in society public transport is strongly impacted by limitless access to digital services and apps, social media and expanding online means of communication. Ownership of private transport – with the “generation Y” in particular – has lost much significance to make way for immediate access to transport (Mobility-as-a-Service). Connectivity takes new shapes step-by-step to match the supply of erratic individual needs of move around in metropolitan areas. These alternating needs of users does not pass by urban public transport supply side unnoticed: it affects individual demand as well as the needs as to what public transport in cities should be capable to offer in terms of integration and quality of services. It requires the supply side to reinvent itself by raising the level of innovative capacity of both transport authorities and the urban operators.

To create an overview of various organisational forms (based on typologies and parameters for profiling PT authorities and operators), in task 1.3. we investigated how the supply in cities is currently set up and how this impacts the propensity of organisations to innovate. A total of nine different typologies have been identified of which four derive directly from literature study (i.e., market regime, entrepreneurship, levels of planning, contract design), whilst five are emerging typologies and their components based on categorisation by different parameters (i.e. territorial scope of PT Authorities (PTAs), strategic decision-making process, the level of integration and the scope of the tasks of PTA, and the status of the operator (PTO).
In order to identify the real world application of these organisational concepts among larger urban PTA’s, a survey was carried out among 25 larger metropolitan authorities of the EMTA-platform. Next to the organisation, tendering practice and the redistribution in contracts of risks and responsibilities the major outcomes on the inclination to innovate on certain issues of services, planning and organisation have been collected. Also the survey aims to get a stronger grip on needs of authorities, that are to be further investigated in this work package.

One of the main goals of this task (1.3) was to identify correlations between particular regulatory and contractual settings a PTA is working in and its ability to foster new concepts and innovative services. In contracts based on net costs and ridership incentives the authorities granting these contracts steer the contracted operator towards a higher quality of service and increase of ridership. In transport contracts operators are rewarded partially by what they manage to achieve in terms of more than a minimum level of revenue or bear the full risk of production cost and revenues. A bonus/malus system does lever a quality impetus to perform better than strictly needed (i.e. on customer satisfaction rate).

Relevant literature on the needs of authorities, even more so regarding the needs of the operators, is rather scarce. However, evidence shows that – more so than the legal framework or rules for market entry in certain urban areas – requirements in a contract that a PTA negotiates with an operator after tender determine warrants to lever customer orientation.
In negotiated contracts offering a certain level of freedom and interplay for marketing tools, like price offers and fares, the operator will be more inclined to raise quality and benefit that will be support the result of its business case. Improving the perceived quality of service is one of the tools that operators resort to in order to pave the way to continue and possibly to prolong the contract after expiring. Despite all of this there is not one specific way to assess what needs are in particular fitting the daily business of operators, without the risk of stating the obvious. Looking at what type of needs PTOs would be inclined to search for, they often reflect the need-scope of their organising authorities that consider it a primary responsibility to keep their customers satisfied.

The survey conducted among metropolitan authorities in EMTA has enabled us to mirror the typologies we discerned in chapter 2 with actual organisation of transport systems in the real-world of metropolitan authorities. Although carried out on a limited scale of larger metropolitan areas it has delivered an interesting impression as to how in very different regimes from market initiative and deregulated to strong governmental interference in closed markets the functions of the supply are organised, ruling is administered and the award of public service contracts by modes is working in practice.

CIPTEC will use the findings and recommendations to validate factors and correlations in the way an urban transport authority and its operators carries out its functions, shares risks and responsibilities that would propel the propensity of authorities and operators to align with emerging needs to implement meaningful innovations in the future in  urban public transport.
March 28, 2016

For more information: Ruud van der Ploeg (EMTA), Thomas Geier (Mobycon)