Analysis of Transit Contracting Models and Proper Incentives for Long-Term Success

(Center Identification Number: 77952)77953

As transit systems are being challenged to operate in the most cost-effective manner, and budgets are being tightened and demand for services increases, there has been renewed interest in the area of contracting for fixed route service in the United States (U.S.). Researchers were tasked to inventory and synthesize previous work in the area of types of transit operating contracts in the U.S. and Europe, assess the benefits and drawbacks of each general approach, and develop situational guidance for Florida Department of Transportation (FDOT) to help determine if a particular model could be appropriately considered. The investigation began with a review of the literature. Using the National Transit Database for 2011, transit service contracting practices in five states were reviewed, focusing on the monetary nature of the contractual relationship between the agency and the contractor. Specific contracts awarded were reviewed to compare and contrast operating parameters outlined in the contracts in terms of assignment, responsibility, and oversight. Researchers turned to individual transit agencies to explore lessons learned from their contracting experience, providing valuable insight not only for agencies considering contracting some or all service for the first time, but also for agencies interested in improving their existing contractual relationships. A contracting decision tree is illustrated, and several strategies to improve service in-house are detailed for agencies that decide to forego contracting. In order to meet the challenges of today’s economy, transit agencies must understand and assess the benefits and drawbacks of each general approach to contracting for transit service.

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