Incorporating economic issues in the design of sustainable DRT systems: insights from the case of a Portuguese municipality

Demand responsive transport (DRT) may be a feasible alternative when conventional transportation services provided by private companies are not available at a satisfactory level in terms of both price and quality. Nevertheless, these unconventional transportation systems are still not consolidated due to technical and economic issues. Beyond technical feasibility, DRT needs to be based on prices and pricing policies that ensure the attractiveness of the service without compromising its economic viability. Nevertheless, there is little evidence on the conditions of economic viability of DRT services and on the cost structure of such systems. In this article, we use a strategic activity based costing model to analyze the conditions of economic viability of a DRT system in a Portuguese rural municipality. The case presented was analyzed in terms of costs and profitability. They were defined a set of important variables which should be taken into account in the design and economic evaluation of DRT projects namely, ticket price, trip distance and passengers. Thus, this costing model can be used to assist decision making and support strategic and operational decisions. Furthermore, it can be embedded in a decision support system designed to support the real time operation of intelligent flexible transportation systems.Research supported by COMPETE: POCI-01-0145-FEDER-007043 and FCT - Fundacao para a Ciencia e Tecnologia within the Project Scope: UID/CEC/00319/2013