Paying for Quality

[#Metro]

http://www.thredbo-conference-series.org/papers/

Understanding Key Drivers of Public Transport Patronage Growth - Recent South East Queensland Experience (PDF)
Mark Streeting and Robin Barlow
http://www.thredbo-conference-series.org/downloads/thredbo10_papers/thredbo10-themeA-Streeting-Barlow.pdf

Service Quality
Booz Allen Hamilton has conducted 'willingness to pay' research that confirms that improvements to service quality have a strong tangible impact on the demand for public transport services. For example, in a study undertaken for Sydney Buses, it was estimated that customers would be prepared to pay an additional amount equivalent to around two-thirds of their current fare to move from a 'base' to an 'optimal' level of service. Specific characteristics such as newer, cleaner, environmentally friendly, air conditioned, low floor vehicles offering an improved ride, accompanied by a customer friendly, well presented driver can all have a positive impact on patronage.
For the purpose of this analysis we focussed on three individual bus-specific service quality dimensions that are amongst the most highly valued by customers:
• • •
Air conditioning Environmentally friendly vehicles (i.e. gas powered) Easy access (i.e. low floor).
Specific willingness to pay estimates were drawn from the Sydney Buses research for each of these parameters. These were expressed as a proportion of average fare to enable an estimate of the demand change to be calculated with reference to our estimated fare elasticity. Respective valuations are around 5% of the average fare (i.e. gas powered and easy access) to around 14% of the average fare (i.e. air conditioning). TransLink provided data with respect to changes in fleet characteristics (i.e. number of buses air conditioned, gas powered and low floor) in 2004/05 and 2005/06.
It should be noted that we were not able to quantify the value of other service quality enhancements associated with new bus fleet such as improvements to seating, provision of additional grab rails, improved destination indicators and so on. Further, no specific allowance was made for any changes to rail and ferry service quality in the analysis or improvements made to transport infrastructure over the evaluation period.