TRANSIT SERVICE CONTRACTING AND COST-EFFICIENCY

Contracting out for services is a controversial issue in public transit. Proponents argue that contracting always saves money in comparison with public operation, whereas critics respond that cost savings through contracting are overstated and come almost exclusively at the expense of labor. In order to determine the medium-term effectiveness of contracting out transit services, the impacts of contracting on the cost per vehicle-hour of fixed-route bus services are examined. A national sample of operators is studied, including some that contract out none of their routes, others that contract out all of their routes, and some that contract out a portion of their service. The effects of contracting on costs are examined for the years between 1989 and 1993. The findings show that bus services operated under contract are sometimes, but not always, less costly than directly operated services. A regression model is used to test the influence of a variety of factors on cost per vehicle-hour, and contracting is found not to be the most significant variable influencing operating costs. The findings indicate that vehicle and labor use have far more influence on cost-efficiency than either wages or contracting arrangement. It is concluded that cost-efficiency can be achieved in many different ways, depending upon local conditions, and contracting should not be assumed to be the most appropriate strategy in every situation.

• Record URL:
  https://doi.org/10.3141/1618-08
• Summary URL:
  http://scholar.google.com/scholar_lookup?title=TRANSIT+SERVICE+CONTRACTING+AND+COST-EFFICIENCY&author=W.+McCullough&author=B.+Taylor&author=M.+Wachs&publication_year=1998
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/isbn/0309064643
• Supplemental Notes:
  • This paper appears in Transportation Research Record No. 1618, Transit: Planning, Management, Marketing, New Technology, Capacity, and Quality of Service.
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • McCullough III, W S
  • Taylor, B D
  • Wachs, M
• Publication Date: 1998

Language

• English

Media Info

• Features: Figures; References; Tables;
• Pagination: p. 69-77
• Serial:
  • Transportation Research Record
  • Issue Number: 1618
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Bus transit; Contracting out; Cost effectiveness; Economic efficiency; Fixed routes; Operating costs; Public transit; Regression analysis; Variables
• Uncontrolled Terms: Efficiency; Transit services
• Old TRIS Terms: Bus services
• Subject Areas: Administration and Management; Data and Information Technology; Economics; Highways; Planning and Forecasting; Public Transportation;

Filing Info

• Accession Number: 00755068
• Record Type: Publication
• ISBN: 0309064643
• Files: TRIS, TRB, ATRI
• Created Date: Oct 14 1998 12:00AM