Bus network design: CSO or ROI?

Bus network design involves difficult choices, and trade-offs between competing objectives, within funding constraints.

At one end of the spectrum, investment in public bus services aims to achieve the strategic community outcome of moving people in an efficient manner. I refer to this as ROI or return on investment, using the commercial definition.

Jarrett Walker of Human Transit refers to this objective as a ‘patronage’ policy approach, which aims to maximise bus passenger patronage, hence fare box recovery, and hopefully reduce the number of private single occupant motor vehicle trips.

At the other end of the spectrum is the provision of public transport as a CSO or community service obligation. Walker describes this policy position as ‘coverage’. A bus service CSO aims to provide equitable access and mobility for the broader community, particularly those that do not have alternative means of transport.

One of the challenges in bus network planning is that planners and elected officials do not publicly acknowledge which parts of the public transport network serve which purpose: ROI or CSO. In my view it should be an explicit and publicly stated policy position.

As we all know, once a bus service is in place it is very difficult to remove – even when the local community opposing the removal of a service doesn’t actually use the service!

In technical terms this is called an ‘option value. In cost–benefit analysis and social welfare economics, option value refers to the value that is placed on private willingness to pay for maintaining or preserving a public asset or service even if there is little or no likelihood of the individual actually ever using it.

So this means we can legitimately argue that some bus services are a CSO as they have an option value.

What I don’t think is right, is when particular bus services are criticised (hence operators, agencies and governments) because of low patronage and hence low fare box recovery – it is not fair and reasonable if they are in fact providing a CSO. On one hand we can’t remove services, while on the other hand we  are criticised for low patronage – can’t win either way!

If bus services are providing a CSO then the associated costs and revenue should be taken out of the fare box recovery equation. If they are designed as ROI, fare box recovery is a legitimate performance metric.

In bus network planning and service design the policy basis, whether ROI or CSO, should be an explicit policy decision and be made public.

Should we be explicit about which parts of  bus networks are ROI or CSO?

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