Quality Incentives Versus Quality Outcome In Procured Public Transport - Case Study Stockholm
AbstractGross 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 is probably one of the first studies to examine 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 in measured quality outcomes. We do not think, however, that the incentives in themselves have negative effects but hypothesize 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.
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Bibliographic InfoPaper provided by Swedish National Road & Transport Research Institute (VTI) in its series Working Papers with number 2009:13.
Length: 23 pages
Date of creation: 29 Oct 2009
Date of revision:
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Postal: VTI, Transport Economics, P.O. Box 6056, SE-171 06 Solna, Sweden
Phone: +46-13-20 40 00
Fax: +46-13-14 14 36
Web page: http://www.vti.se/tek
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procured; public transport; gross contract; net contract; quality; incentive;
Find related papers by JEL classification:
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
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