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Quality incentives and quality outcomes in procured public transport - Case study Stockholm

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  • Jansson, Kjell
  • Pyddoke, Roger

Abstract

Gross contracts appear to be the most common contract form for procured public transport in Sweden and elsewhere. This contract form, it has been argued, gives weak incentives for operators to deliver the desired quality level. Therefore many procuring public transport authorities amend contracts with quality incentives. This paper examines how such quality incentives influence quality outcomes with focus on cancelled departures and delays. The main findings are that the introduction of quality incentives are correlated with both increases and decreases of measured quality outcomes. We hypothesise that the results are driven by underlying cost changes for achieving desired quality objectives that exceed the possible revenues from the incentives. In interviews with the Stockholm public transport authority (SL) and some operators, two central observations surface. The first is that there are causes for quality failures that are not solely the responsibility of operators and that these are therefore not fully reached by the incentives, and the second is that the operators believe that they have exhausted what they can do under the current contracts.

Suggested Citation

  • Jansson, Kjell & Pyddoke, Roger, 2010. "Quality incentives and quality outcomes in procured public transport - Case study Stockholm," Research in Transportation Economics, Elsevier, vol. 29(1), pages 11-18.
    • Handle: RePEc:eee:retrec:v:29:y:2010:i:1:p:11-18
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    References listed on IDEAS

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    1. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, December.
    2. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
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    Cited by:

    1. Batarce, Marco & Ávila, Franco, 2020. "Misguided quality incentives: The case of the Santiago bus system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 139(C), pages 376-399.
    2. Gkiotsalitis, K. & Alesiani, F., 2019. "Robust timetable optimization for bus lines subject to resource and regulatory constraints," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 30-51.
    3. Hrelja, Robert & Rye, Tom & Mullen, Caroline, 2018. "Partnerships between operators and public transport authorities. Working practices in relational contracting and collaborative partnerships," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 327-338.
    4. Pyddoke, Roger, 2020. "Penalties as incentives for punctuality and regularity in tendered Swedish public transport," Research in Transportation Economics, Elsevier, vol. 83(C).
    5. Sheng, Dian & Meng, Qiang, 2020. "Public bus service contracting: A critical review and future research opportunities," Research in Transportation Economics, Elsevier, vol. 83(C).
    6. Cats, Oded, 2014. "Regularity-driven bus operation: Principles, implementation and business models," Transport Policy, Elsevier, vol. 36(C), pages 223-230.

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