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Selecting an optimal contractual payment model for Istanbul's public bus operators using non-linear mathematical programming

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  • Canıtez, Fatih
  • Çelebi, Dilay
  • Deveci, Muhammet
  • Kuvvetli, Yusuf

Abstract

In this study, an optimum payment model is suggested for Istanbul's public bus transport operators by modelling the expectations of passengers, operators and the transport authority. Their expectations also involve non-linear relationships, hence a non-linear mathematical programming is utilized in the paper. The commercial payment, gross-cost and performance-based gross cost payment models are the alternatives to be considered instead of the net-cost model due to its service quality problems in Istanbul's context. According to the model results, a gross cost payment model is recommended for Istanbul. By offering a consensus-based middle ground between the transport actors, the model provides a way for improvement in public transport service provision especially for developing cities where regulatory and institutional context is hard to change.

Suggested Citation

  • Canıtez, Fatih & Çelebi, Dilay & Deveci, Muhammet & Kuvvetli, Yusuf, 2019. "Selecting an optimal contractual payment model for Istanbul's public bus operators using non-linear mathematical programming," Research in Transportation Economics, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:retrec:v:76:y:2019:i:c:s0739885919302628
    DOI: 10.1016/j.retrec.2019.100750
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    Cited by:

    1. Sheng, Dian & Meng, Qiang, 2020. "Public bus service contracting: A critical review and future research opportunities," Research in Transportation Economics, Elsevier, vol. 83(C).

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    More about this item

    Keywords

    Public transport; Non-linear mathematical programming; Contracting models; Net-cost; Gross-cost; Performance-based contracts;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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