Roles of Service Planning and Organizational Decisions in Influencing the Economic Sustainability of Multimodal Bus and Light Rail Transit Systems

Several recently published studies have demonstrated that employing planning strategies oriented on improving the internal characteristics of transit service, including frequency, coverage, intermodal integration, and seamless connectivity between all important trip attractors, positively influences ridership and productivity of multimodal bus and light rail transit systems. However, the research has not assessed overall economic outcomes of implementing these strategies, including social benefits and capital costs. Another emerging body of scholarship pointed to transit service contracting and consolidated regional governance as another possible strategy for improving transit feasibility. Again, not all economic aspects of these decisions have been evaluated thus far, and the available assessments of contracting and transit governance models do not consider long-term effects of specific organizational decisions. This study intends to fill these research gaps by investigating the influence of several internal and external transit performance factors on the amount of net benefits generated by 13 U.S. bus and light rail transit systems, observed annually during the 2001 - 2011 period. The evaluation starts with an estimation of net benefits (agency revenues plus non-direct social benefits minus operating and capital costs). Next, a panel regression model is employed to examine the statistical relationship between specific performance factors and the average net benefits generated by the case systems. The results of this study indicate that higher frequency, higher service density, higher ratio of contracted service and the presence of strong regional transit governance positively influence net benefits. The role of network decentralization (volume of service headed outside of the central business district) appears to be insignificant. These results bring additional evidence indicating the positive outcomes of certain internal transit planning strategies, which corresponds with the findings offered by previous research studies.