Governance and regulation of urban bus transportation: Using partial privatization to achieve the better of two worlds

Abstract

Mixed delivery of public services is gaining increasing attention as a way for public managers to avoid deciding between a purely public and purely private delivery system. The unusual coexistence of public and private operators in the urban bus market in Barcelona provides an interesting context in which to analyze the challenges and opportunities posed by this system. Competition for concessions among private operators and the regulation of concessionaires generate incentives to improve efficiency and quality. Furthermore, partial privatization increases the efficiency and feasibility of public operators. In fact, competitive bidding is effective in disciplining private operators and increasing the regulators' bargaining power over both public and private firms. The reform implemented in Barcelona offers an interesting insight into all metropolitan areas that are in a position to create a number of separate concessions large enough to benefit from economies of density.

Do contractual practices affect technical efficiency? Evidence from public transport operators in China

“…Roy and Yvrande-Billon (2007) has found through empirical research of the effect of contractual practices on the technical efficiency that operators regulated by cost-plus contracts are less efficient technically than those regulated by fixed-price ones. Albalate et al (2012) has derived from the case studies a conclusion that is consistent with that of Roy. For this reason, the following hypothesis is proposed in this paper: Hypothesis 1.…”

Public and Private Production in a Mixed Delivery System: Regulation, Competition and Costs

“…However, private production (supply from private vendors) within a mixed delivery system may also be used as the basis for a credible threat for the privatization of some publicly delivered services. Indeed, this threat has been used in Barcelona at the time of labor conflicts within the TMB (Albalate, Bel, & Calzada, , p. 97). As such, it may have contributed to cost containment in the public firm, thus helping to explain its relatively good economic performance (compared to that of the private firms) in Barcelona.…”

The efficiency and effectiveness of municipally owned corporations: a systematic review

“…These studies are not uniformly positive about MOCs' efficiency: like state enterprises, singular MOCs are found to be inefficient when not exposed to competitive pressures (Albalate et al 2012;Bognetti and Robotti 2007). Indeed, when governments put up barriers to entry, they insulate MOCs from competition and remove market pressure to maximise their efficiency.…”

“…None of the incorporated studies discusses how labour costs in MOCs compare to those in bureaucracy. Some studies report that labour costs are higher in singular MOCs than in mixed MOCs (Swarts and Warner 2014) or private firms (Albalate et al 2012), but empirical evidence compared to bureaucracy lacks.…”