Contracting Out in the Transit Industry

Abstract

Since the Government Accounting Office report “Transit Agencies' Use of Contracting to Provide Service,” there is a growing interest in contracting out and any measures increasing efficiency and cost-savings. This chapter looks at the results of a unique national survey of transit agency managers conducted in 2017 for a modern snapshot of the transit industry in the United States. While there are specific factors that make transit contracting easier (e.g., competition in the provision of services), there are also factors that require contracting out but make monitoring of contracts more difficult (e.g., no capacity to provide services and monitoring in-house). The authors discuss these factors and provide illustrative examples of factors that may enhance efficiency.