Peak-period supplements: The contemporary economics of urban bus transport in the U.K. and U.S.A.

Virtually every U.S. bus system today charges its customers flat fares. Recent trends, however, suggest that passengers are traveling farther and proportionally more during peak hours, factors which have contributed toward transit's cost spiral. As deficits continue to soar and available funding tightens, current pricing rationales must be seriously questioned. This paper assesses the efficiency and equity impacts of three California transit agencies' fare structures. Short-distance, off-peak patrons are found to heavily crosssubsidize long-haul commuters. Fares differentiated by distance and time-of-day, in contrast, could improve the transit industry's fiscal posture while eliminating differences in payment rates. Barriers to their implementation remain formidable, however, both in terms of current fare collection capabilities and political acceptability.

Section: Fares and Fiscal Performancementioning

confidence: 99%

“…Some argue that peak services incur costs which exceed those of comparable off-peak services by as much as 100% (Parker and Blackledge, 1975;Oram, 1979). Yet, since rush hour buses often carry capacity loads, others contend that peak services operate less in the red than base services (see Reilly, 1977).…”

Section: Time-of-day Analysismentioning

confidence: 99%

Flat versus differentiated transit pricing: What's a fair fare?

Cervero

1981

“…Until very recently, results of these studies led to a consensus that bus transit is characterized by constant returns to scale for most bus firms and by decreasing returns for the largest operations (Oram, 1979;McGillivray et al, 1980). In contrast, the findings of some recent econometric studies indicate economies of scale over a wide range (Viton, 1981;Williams and Dalal, 1981;Berechman, 1983).…”

Section: Introductionmentioning

confidence: 99%

Economies of scale in bus transit: A review of concepts and evidence

Berechman

Giuliano

1985

The issue of returns of scale in bus transit continues to be a subject of debate among transportation analysts. From a public policy perspective, returns to scale are relevant to many policy areas such as transit service pricing, cost allocation, productivity and organization of the industry. Empirical studies conducted during the past decade have generated conflicting results. Constant, decreasing and increasing returns to scale have all ~6een reported.This paper identifies the sources of these conflicting results: confusion regarding the concept of scale economies, variable definition, assumptions regarding the shape of the cost function, and certain characteristics of the data base. The paper also discusses the theoretical concept of scale economies, and an interpretation of the concept for bus transit is presented. It is concluded that recent studies which have utilized generalized cost functions more accurately represent the economic structure of bus transit, and provide a stronger basis for transit policy analysis.

“…Furthermore, bus utilization has consistently fallen; an industry sample showed a 19 percent decrease in "bus hours per active bus per day" between 1960(Control Data Corp., 1977b. Long-term trends in Britain have been generally similar (Oram, 1979), though less severe. Typical peak-to-base ratios are approximately 1.5 in Britain (White and Webster, 1980), whereas in the U.S. the average measure was 2.01 in 1974.…”

Section: The Present Predicament and The Futurementioning

confidence: 82%

The role of subsidy policies in modernizing the structure of the bus transit industry

Oram

1980

Full reliance on conventional forms of bus transit for peak hour needs reduces industry productivity and creates major new subsidy requirements. Restructuring of transit is needed to enable paratransit integration and other innovations than can improve efficiency. This paper discusses the industry's long-term neglect of efficiency and describes subsidy policies that would promote necessary changes.