(PS08)

Urban Transport and the Purchaser/Provider Split

Executive Summary

Over the past two decades, various countries have established policies to shift the production of transit services into a competitive environment. Known technically as the purchaser-provider split model, it preserves public funding for the service but creates incentives for efficiency and innovation by requiring both in-house and private operators to bid for the right to operate services. Public transport systems are tendered to multiple operators, who provide service according to public specifications. The resulting regional transit system is seamless, with full fare interconnectivity. Marketing is handled by the tendering agency, which ensures that all services are operated, from the perspective of customers, as part of a single, unified system. Without exception, the result has been cost savings, which vary country to country based upon labour market conditions.

Full Text of Policy Series No. 8 - (PDF, 14 pgs, 118 Kb)

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Wendell Cox, Senior Fellow, is principal of Wendell Cox Consultancy, an international public policy, demographics and transport consulting firm. He has developed a leadership role in urban transport and land use and the firm maintains three internet websites: www.demographia.com, www.publicpurpose.com and www.rentalcartours.net . Wendell Cox has completed projects in Canada, the United States, Asia, Australia, New Zealand, Europe and Africa. He is author of "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life" and a co-author with Richard Vedder of "The Wal-Mart Revolution: How Big-Box Stores Benefit Consumers, Workers, and the Economy." He was appointed to three terms on the Los Angeles County Transportation Commission which oversaw highways and public transit in the largest county in the United States. He was also appointed to the Amtrak Reform Council. Wendell Cox is visiting professor at the Conservatoire National des Arts et Metiers (a national university) in Paris.