Outcomes from new contracts with “strong” incentives for increasing ridership in bus transport in Stockholm

Abstract

The Swedish Public Transport Association has adopted recommendations on incentives for increased ridership in tendered contracts, though there is little evidence on how public transport contracts should be designed to reach this goal. This study begins amassing the needed evidence by analyzing the performance of four Stockholm Region bus contracts spanning seven years, examining the new E20 contracts intended to increase ridership, customer satisfaction, and efficiency. These contracts employ 100 percent of payments to operators depending on the number of boarding and paying passengers. Using mostly monthly data, outcomes in E20-contracts in four areas (formerly governed by gross cost contracts) over three years are compared with outcomes in the years before the E20 contracts were implemented, and with two gross contracts running parallel to the E20 contract. Compared with gross cost operators in comparison areas, E20 operators performed better in terms of costs, customer satisfaction (initially worse but then better), punctuality, and canceled departures, but worse in number of departures and no better in number of passengers.