Promoting cost improvements in public transit firms

Abstract

This paper provides an overview of government policy programs and strategies of public transit firms (that have been considered in the US and/or in the UK) for promoting cost improvements in the provision of public transit services. A cost improvement occurs when the same level of transit service can be provided at lower cost. The paper concludes that direct deregulation, the sale of public transit firms to the private sector, and the combination of indirect deregulation and the sale of public transit firms to the private sector are expected to be superior approaches to indirect deregulation, contracting out service, transit performance evaluation, the transit firm using alternative resources and the transit firm providing alternative services for promoting transit cost improvements.

Key words:

• Direct deregulation
• indirect deregulation
• contracting out
• performance evaluation
• privatization and X‐inefficiency