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The impact on bus ridership of passenger incentive contracts in Swedish public transport

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Denna studie är den första delen av det större projektet Incitament och utvärdering för kollektivtrafikförbättring. Samtidigt som simuleringsstudier tidigare har visat att högre avgifter och vägtullar skulle öka bussresandet, är det oklart om kollektivtrafikmyndigheter bör överlåta friheten att skräddarsy trafikutbudet till operatörerna, givet myndighetens ansvar för socialvården. Resultaten kan inte bevisa att incitamentsavtal för passagerare ökade passagerarantalet mer än traditionella produktionsavtal, där operatören inte får betalt för ombordstigning.

Det beror sannolikt på att operatörens ersättning pr ankomsten var för låg och att operatören hade för få frihetsgrader att påverka trafiken.

Introduction

However, few empirical evaluations consider the actual outcomes of the use of incentive contracts (and payments) for travelers. Pyddoke and Lindgren (2018) studied two E20 “VBP contracts” in Stockholm, in which all of the operator's revenue came from a passenger incentive payment of approximately €1.50. Contracts were not analyzed in detail and the presence of a travel incentive was represented by a dummy.

The main methodological improvement lies in studying a region that gradually introduced a standard passenger incentive contract as the earlier standardized gross cost contracts matured.

Swedish public transport and the passenger incentives contract

Public transport in the Skåne region

The operator is paid EUR 0.5 per passengers in city traffic and EUR 1 in regional traffic. The operator receives the payment regardless of the type of boarding passengers, including students traveling on the regular public transport system. According to contract data from Transportanalysis for 2015, passenger incentives accounted for an average of 21% of the total payments to the operator in Scania for contracts containing this type of incentives, with extremes of 7% and 35%.

In Skåne, as in the rest of the Swedish bus contracts, fares are set solely by the PTA, which means that this is a measure that cannot be changed by the operator. The degree of freedom of the operators in the Skåne Passenger Promotion Agreement is regulated by the cooperation agreements in the agreement signed with the operator. Although the operator controls local marketing with Skånetrafiken, the tender documents show that.

Marketing must follow Skånetrafiken's marketing platforms, which is also the sole sender of the marketing message - that is, the operator cannot include its logo or brand. This is a standard way of involving the operator in the scheduling process of other PTAs, and perhaps gives some freedom to the operator. It also stands in contrast to VBP contracts in Stockholm, where more influence is formally given to the operator.

For example, the contract covering the Handen, Nynäshamn and Tyresö areas in the Stockholm region contains wording similar to that in the Skåne regional contract, suggesting that the operator should make proposals to improve the supply. In relation to this, the operator's freedom with regard to timetable design in Skånetrafiken's cooperation agreements must be considered minimal at best.

Empirical framework

Models

When considering the effect of introducing an incentive contract for passengers on the move, an average or gradual effect can be considered. The average effect is given by simply including an indicator variable in the estimation model, which takes a value of 1 from the month that a route (and similarly the contract) is converted to a passenger incentive contract, and 0 otherwise. INC is the indicator variable that takes a value of 1 in the moments when the route is directed under a passenger incentive contract and γ is the estimated coefficient, which is expected to be positive and significant to affirm an increase in the number of passengers after the introduction of passenger incentive contracts. passengers.

Moreover, δi and ζj are route and operator fixed effects, respectively, while ηt are time fixed effects in the year, month and year-month dimensions. Although the average effect is thought to reflect the potential effect on traveler numbers, it is not very informative about when this effect occurs. The idea is that the effect on the number of travelers will not be immediate when the passenger incentive contract is introduced, but may occur with a delay.

That is, the number of passengers may remain unchanged in the first year, but may increase in the second and third years, and so on.

Simultaneity between ridership and supply

Power and level of significance

Data

No clear pattern is apparent, especially since the total number of unassigned trips is fairly stable over time. As for the control variables other than the number of departures, they are assigned to each route and each year using GTFS (General Transit Feed Specification) files provided by Samtrafiken, which contain coordinates for each stop and route. Route distance is calculated as the Euclidean distance between each stop along the geographic path of a route.

Population, income and car ownership per capita by trip and year compiled using data from Statistics Sweden (SCB). These data are either composed of 100 × 100 meter squares (for population) or per individual and his/her residential position (for income and car ownership) overlapped with 500 × 500 meter areas around bus stops on the route. Population is measured as the total annual population, both adults and youth, en route.

However, because this variable is highly correlated with population, it becomes a second step in car ownership per thousand individuals grown along the road. The full sample used in the estimations consists of 17,074 observations at the monthly and route levels, with descriptive statistics for the full sample given in Table 2 and the city and regional traffic samples in Table 3 and Table 4 respectively. The data consists of monthly route-level observations divided into 26 contracts covering a total of 227 routes.

The data consists of monthly route-level observations divided into 11 contracts covering 75 routes. The data consists of monthly route-level observations divided into 19 contracts covering 152 routes.

Results

Sensitivity analyses

  • Endogeneity bias
  • Selection bias from renegotiated contracts

Two analyzes were performed to check how sensitive the results are to the assumptions and conditions applied. A potential endogeneity problem was discussed in Section 3.1.1, and two additional regressions were suggested to infer the impact on estimated incentive contracts, in which supply and population were removed from the regression. Time fixed effects are year and month fixed effects, respectively, and year*month fixed effects.

While the point estimate drops by about two percentage points, the standard error is close to double, implying that the confidence interval has increased significantly. The same applies to model (5-E2), in which the point estimate is 0.6 percentage points lower than in model (5). The conclusion from these tests is that the potential endogeneity problem does not appear to affect the estimated coefficient of the passenger incentive variable.

This means that the conclusions from models (5) and (6) and the results of the study are valid. Although not evident from the results table, it is likely that the potential simultaneity bias channeled through the supply variable actually affects the estimates in model (5) to some extent. A sensitivity analysis of this case was conducted to determine whether the results are sensitive to treating these four contracts the same as other passenger incentive contracts.

Overall, the conclusions do not change, as the results are similar to those of the baseline model. Time fixed effects are annual and monthly fixed effects or year*month fixed effects.

Discussion

Such incentive contracts for passengers are very complex, their incentives and freedoms difficult to optimize and their consequences difficult to predict. Although not fulfilling their purpose, passenger incentive contracts have one component that could be worth keeping and developing, perhaps primarily for better public transport delivery rather than as a means to increase travel: the cooperation agreement and, as a result, a form of partnership of trust between the PTA and the operator. However, for the purpose of increasing ridership, types of incentives other than passenger incentives may have better potential.

When it comes to increasing the number of public transport, the most effective way to do this is probably not through contracts. Next up are improvements to the road environment prioritizing public transport modes, leading in turn to higher average speeds and more reliable and attractive service. Local roads and public transport are run by municipalities, while the national government sets most taxes and regulations.

Although passenger incentive contracts have not been shown to increase ridership, they are nevertheless frequently used in competitive tenders. The four largest operators in Sweden have a significant presence in the Scania region, and this shows no signs of changing, as smaller operators are unlikely to have the knowledge and analytical skills required to prepare competitive bids for passenger incentive contracts. Finally, although this study was unable to prove that the increase in ridership in Scania was due to its passenger incentive contracts, the effects of these contracts on cost and quality were not investigated.

However, if a passenger incentive contract does not produce an increase in passengers, the passenger incentive payment will be lower than expected in the operator's bid, causing the total payment to be lower. If costs and quality indeed develop in a favorable direction, passenger incentive contracts could prove to have beneficial side effects, although the question remains whether this form of contract is the most effective way to achieve these effects.

Conclusions

Performance-based quality contracts for the bus sector: delivering social and commercial value for money. The effect of contract extensions and competitive tenders on public transport costs, subsidies and passenger numbers. Retrieved from https://web.archive.org/web http://www.svenskkollektivtrafik.se/Global/fordubbli ng.se/nya%20bilagor/bil.3%20Modellavtal%20ResandeincitamentsavtalBuss.pdf.

The influence of demand incentives in public transport contracts on patronage and costs in medium-sized Swedish cities. Multimodal pricing and optimal design of urban public transport: The interplay between traffic congestion and bus pressure.

Appendix – Correlation table

Referanser

Outline

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