III. Dealing with Changes Roles for Existing PT Providers
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1 III. Dealing with Changes Roles for Existing PT Providers Introduction to Public Transport Planning and Reform III-1
2 Guidelines for Rationalizing Supply of Public Transport Build on existing operational capacity of service providers Incentivize the formalization of informal operators Do not deprive captive users from existing service provision i Scale up and phase in changes to control service disruption Enforce law and order III-2
3 Assess Existing Provision of PT Necessary for rationalizing supply Assessment Areas Quality of service Availability, access, affordability, safety/security, intermodal integration Financial i sustainability of supply Cost-effectiveness of service Subsidization Fiscal sustainability Social distribution (commuters, schoolchildren, elderly and unemployed people) Negative Externalities Destructive competition on the street ( overtrade ) Economic inefficiencies (cost-effectiveness) Social and environmental externalities Undersupply or unserved demand) III-3
4 Examine Current Local Conditions o and Trends Current and projected situation of transport supply and demand Accurate assessment requires surveys of household travel and public transport providers Planned changes in service Capacity of public planning, management, enforcement institutions Contemplated change in industry organization Operational capacity of current service providers Implications for, treatment of stakeholders during and after transition Enforcement III-4
5 Incumbent Operators State-owned or municipal Can be assigned performance contract) Franchised private operators Competing or granted monopoly on route/area Range of informal operators Status Pirates to formally registered and law compliant small scale enterprises or cooperatives Dynamics Survivalists owner-drivers to thriving companies III-5
6 BRT and Existing Operators Megabus Pereira Existing bus operators can be used to: Operate BRT services (e.g. trunk routes) Extend reach of BRT (e.g., feeder and distribution/community services beyond BRT Provide new PT services in urbanizing parts of city BRT service contracts may be special contracts More demanding service duties Access to infrastructure most often is controlled III-6
7 Public Transport Informality A Challenge and An Opportunity A Challenge Resistance to shifting from self-regulation to contractual obligations, law enforcement e.g., Bogota, from 1999 to date, Sao Paulo in 2001, Paris in 2008 An Opportunity Use market knowledge to test t new services Build on operational capacity, self-regulation, flexibility Retain cost-effectiveness Requires Operational Integration III-7
8 Successful Experiences Operational Integration Developed countries Shared taxis as a complement/substitute to standard bus services (e.g., Canada, USA, UK, Netherlands, Norway, France, Sweden) Developing countries Operational integration of incumbent operators in rationalized bus systems (e.g., Bogota, Curitiba, Sao Paulo, Santiago de Chile, Seoul, Indore) III-8
9 Origins Shared Taxis as a PT Mode Paratransit started in the US in the 70s On-Demand Service (ODS) a major thrust in Western Europe/North America for past 20 years Major factors Urban sprawl and diverse travel patterns More cost-effective than scheduled service Fast-growing elderly/disabled population 16% of adult population p in the UK IT progress in central control/dispatching) Benefits to all stakeholders Public authorities (e.g. when subsidizing the service) Regular bus operators (alleviation of service duties) Taxi operators (secured cash flow) Users (enhanced access, availability and quality of service) III-9
10 Shared Taxis Impact on Operators Special Mobility Needs Approach: Göteborg, example Operates FareService with a municipal Travel Dispatch Center employing 110 people 4000 calls per day IT dispatching system (developed by Volvo) Optimizes routes and vehicle assignments Calculates l fares paid to 350 contracted taxis from five companies 80 special vehicles with wheelchair lifts or ramps Government funding Norway, 20% of taxi services paid by public authorities; Sweden, about 50% revenues paid by public sector III-10
11 Shared Taxis Impact on Operators Support Regular Bus Service France On-Demand Service contracted to taxis in 60 cities Regular-hour service (e.g., Saint Brieuc on 50 lines) Substitute for low-performing bus routes (e.g., Mulhouse) Weekend/holiday service (e.g., Dijon) After hours when no bus service (e.g., Strasbourg) Province of Quebec, Canada 12 Taxibus services either as a stand-alone PT mode or in coordination with standard bus service Sweden Substitute for low-performing rural services in most municipalities Netherlands Focus on general public service in rural areas 60% of taxi revenues are government-supported III-11
12 Shared Taxis Are Possible New Markets for Regular Bus Operators On-Demand Service to airports e.g., Super Shuttle (US) by Veolia Transport to 24 airports, dispatching managed by 2 call-centers in Florida and Arizona. Advantages to bus operator Acquire operational expertise in digital dispatch and GPSenabled cabs Diversify the company's portfolio of services Partner with taxi operators who are franchised Respond to demands cost-effectively Examples Golden Arrow sub-contracts to minibus taxis night-shift workers commuting (Cape Town) UCT contracts part of free shuttle service for staff and students to taxi operators (Jammie Shuttle) III-12
13 Operational Integration of Incumbent Operators in Rationalized Bus Systems Trunk routes (e.g., Mexico) BRT operation on Corridor Insurgentes (Metrobus) 200 incumbent operators formed into one company Service contracted without bidding process Feeder/distributor ib t services to regular bus stations ti Taxis provide community service in Buenos Aires 11,319 minibus taxis serve 355 routes in Santiago, Chile Beginning in 2007 now substitute for low-performing bus routes Fully integrated PT network (e.g., Sao Paulo) 39 bus/6000 van operators formed in coops (13,700 veh) City divided in 8 regions, one company/region Fare integration is key Boardings/day increased by 50% III-13
14 Shared Benefits of Operational a Integration Public authorities Reduced capital investment, less intensive use of regular buses Sao Paulo reduced bus routes by 30%, bus fleet by 25% through provision of community services by 4500 micro and minibuses operated by formerly informal operators Operators Secured cash-flow, part of capital investment taken care by public agency, access to finance (South Africa) Drivers Better working conditions, higher wages Users Improved reliability, affordability, availability (current and tailored services) III-14
15 Overcoming Inevitable Challenges Make strong outreach efforts to stakeholders Including users, financial institutions, vehicle manufacturers Why? PT operators are effective lobbyists Have capacity to interrupt or disrupt the service Make provisions for damage control e.g. likely disruption of service Build Confidence e.g, Help informal operators incorporate, acquire bidding capacity, strengthen operational capacity, access finance Make incremental changes Can be demonstrative Scale changes to management/enforcement capacities III-15
16 Promoting Changes in Industry Organization Most challenging is change from: Competition on the street by highly fragmented informal sector to Integrated formalized system Why? External regulation must be imposed on a self-regulated industry Multiple, fragmented service providers have uneven capacities Service providers are required to operate a brand new type of trade demanding different skills/capacities and business model (barriers to market entry) III-16
17 Implementing Effective Regulation Use existing self regulation as much as possible Provide incentives for joining associations ruled by voluntary codes of conducts (South Africa, Sri Lanka) Support self-imposed discipline e.g. Award exclusive rights to complying associations (South Africa) Apply targeted, progressive discipline Address problems without depriving users of needed service Beware of creating, excessive barriers to market entry (or costs of formalization) Formalization should not forbid existing operators access to the market (which is often impractical) Adjust regulations to evolving state of the industry An iterative and dynamic process; do not let operators outsmart regulations III-17
18 Assessing Potential Implications for Existing Stakeholders Increased/decreased number of vehicles and workers Proposed Approach: Avoid oversupply while preserving and extending availability Changes in types and locations of work Proposed Approach: promote higher labor standards/required qualifications, mitigate possible retrenchments Different trade and business model Proposed Approach: Assess how costs and benefits of formality compare with those of informality Change from independent franchise holder/owner/operator / to employee or shareholder h III-18
19 Enforcement Issues Reform cannot work unless new arrangements are legally and consistently enforced e.g. franchised operators should be protected against illegal operators Consistent enforcement requires close coordination of all implementing agencies e.g., Police, licensing boards, transport authorities, tax administration May require specialized agency (e.g. Taxi policing in Paris) Enforcement must be selective and focused on worst violations III-19
20 Concluding Remarks Informality should be corralled but not suppressed A rationalized PT service provision should be integrated Even a highly rationalized PT service can only serve part of mobility needs Improved financial sustainability is an indispensable driving force for convening PT providers III-20
21 References City on the Move, Taxi Festival, Lisboa 2007, proceedings of the conference : (De)regulation of the Taxi Industry, OECD, 2007: CODATU conference proceedings: TRB Conference proceedings : R. Cervero, A. Golub, Informal transport: A global perspective., Transport Policy, 2007 III-21
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