Outcomes from new contracts with “strong” incentives for increasing patronage in bus transport in Stockholm

The Swedish Public Transport Association (SPTA) has taken initiatives to develop contract recommendations on incentives for increased patronage in tendered contracts. There is, however, currently a small evidence-base for recommendations for how public transport contracts should be designed to provide incentives to achieve the policy goals of the Regional Public Transport Authorities (RPTA). A review of public contracts from the government agency Transport analysis (2015) indicates that the use of patronage incentives so far is modest. The purpose of this study is to take first steps towards creating such a knowledge base by collecting and analyzing the performance in four bus contracts in Stockholm county spanning seven years. The study focusses on a new kind of contract called E20 where 100 percent of the payments to operators are tied to the number of boarding and paying passengers. The study compares the development of the E20-contract areas (formerly independent contracts) with the outcomes in same contract areas before and with two comparison areas covered by gross cost contracts. The stated goals for the E20 contracts are to increase patronage and customer satisfaction as well as to increase efficiency. With the use of available monthly outcome data, the outcomes in the E20 areas (three years) are compared with the period before (four years) and to how the comparison contracts using gross cost contracts have developed: • In two of the E20 contract areas (Sollentuna and Norrort) the operator tried to significantly increase the supply, without this leading to substantial increases in boardings. Thereafter, the supply was reduced to a level slightly above the level before the E20 contract started. In the other two E20-contract areas, supply has increased gradually but little. • In two other E20 contract areas (Bromma and Norrort) the share of canceled departures decreased, while they increased in (Sollentuna, Solna/Sundbyberg). These effects are small. • Cancelled departures have decreased more in E20 areas than in the comparison areas. • Punctuality has changed little in the E20 contract areas. • Perceived quality deteriorates initially but improved steadily to roughly recover to previous levels. • Costs have declined in two contract areas (Bromma and Sollentuna) but increased in two other (Solna/Sundbyberg and Norrort). On average, they increase slightly, but less Compared to the gross cost contracts in comparison areas, the operator of the E20 contracts performed better regarding in the dimensions of Costs, Customer satisfaction (initially worse but then better), Punctuality, Cancelled departures ..but inferior in Supply of number of departures ... and not better regarding the number of boarding passengers. Note that this describes the outcome with available data, in this specific case during this specific period. This single observation does not provide sufficient basis for generalization to other contracts or continuing events of the same contract. Neither does it exclude that a similar course of events could occur later or in other contracts.Institute of Transport and Logistics Studies. Faculty of Economics and Business. The University of Sydne