Chapter 36: The Performance of Bus-Transit Operators

The transit industry is a fairly heterogeneous mixture of companies with different ownership status that provide passenger services in a highly regulated environment, and making use of a diversity of vehicles (bus, tramway, metro, light rail, etc.). In almost all countries, urban and interurban bus transit is an important component of this industry. The purpose of this chapter is to review what is known about the economic performance of bus-transit operators. Although other criteria for evaluating performance may be suggested (effectiveness, financial indicators, etc.), we mainly focus on issues of productivity and efficiency. Based on the recent literature, we summarize the main trends in productivity growth and efficiency in the industry. More importantly, we review the most relevant technological, environmental, and regulatory determinants of productivity growth and of differences in efficiency levels between operators. The available evidence is interpreted relative to a number of recent policy discussions on regulatory reform of the sector. These discussions concern, among others, the role of subsidies and contractual arrangements, and the effects of recent changes in competition policy, such as the introduction of competitive tendering in the industry.