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Experiences with Competitive Tendering of Bus Services in Germany

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  • Arne Beck

Abstract

After a long transition period with only a few isolated procedures for competitive tendering, the market for German public transport bus services has seen numerous such tenders in recent years. The results are complex. From the public transport authorities’ point of view, the main effects are a decrease in subsidy payments, with relatively low expenses relating to the tendering process (allocation, contract management). The overall level of competition is high, with five to seven bidders on average, although this has been declining in recent years. Entry barriers have been identified at significant levels for several parameters, especially with respect to the volume tendered and the revenue risk to be borne by the operator out of net‐cost contracts. Demonstrably small‐ and medium‐sized transport operators have been able to increase their market share in the starting phase of introducing tendering, with diminishing success rates in recent years. Due to the increased quality requirements in competitive tendering, the quality of public transport available has improved considerably, and environmental standards have been better implemented and sustained. As far as employees are concerned, a trend towards wages below the wage rate of private operators cannot be observed. However, their level is well below the level of public incumbent operators.

Suggested Citation

  • Arne Beck, 2011. "Experiences with Competitive Tendering of Bus Services in Germany," Transport Reviews, Taylor & Francis Journals, vol. 31(3), pages 313-339.
    • Handle: RePEc:taf:transr:v:31:y:2011:i:3:p:313-339
    DOI: 10.1080/01441647.2010.511299
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    Citations

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    Cited by:

    1. Ida, Yoram & Talit, Gal, 2015. "Regulation of public bus services: The Israeli experience," Transport Policy, Elsevier, vol. 42(C), pages 156-165.
    2. Wegelin, Philipp, 2018. "Is the mere threat enough? An empirical analysis about competitive tendering as a threat and cost efficiency in public bus transportation," Research in Transportation Economics, Elsevier, vol. 69(C), pages 245-253.
    3. Vigren, Andreas, 2018. "How many want to drive the bus? Analyzing the number of bids for public transport bus contracts," Transport Policy, Elsevier, vol. 72(C), pages 138-147.
    4. Hirschhorn, Fabio & Veeneman, Wijnand & van de Velde, Didier, 2018. "Inventory and rating of performance indicators and organisational features in metropolitan public transport: A worldwide Delphi survey," Research in Transportation Economics, Elsevier, vol. 69(C), pages 144-156.
    5. Papaioannou, Panagiotis & Georgiadis, Georgios & Nikolaidou, Anastasia & Politis, Ioannis, 2020. "Public Transport tendering and contracting arrangements in countries under regulatory transition: The case of Cyprus," Research in Transportation Economics, Elsevier, vol. 83(C).

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