SPUTNIC – Strategies for Public Transport in Cities
Policy and Research Recommendations Report
Title: / Strategies for Public Transport in CitiesAcronym: / SPUTNIC
Contract N.: / TREN/05/FP6TR/S.07.59847/019835
Date of issue: / 20 October2009
Project start: / 26 July 2006
Duration: / 36 months
This study is subject to a disclaimer and copyright.
This study has been carried out for the Directorate-General for Energy and Transport in the European Commission.
Copyright in this study is held by the SPUTNIC consortium. Persons wishing to use the contents of this study (in whole or in part) for purposes other than their personal use are invited to submit a written request to the following address:
UITP International Association of Public Transport
Rue Sainte-Marie 6
1080 Brussels
/ Project funded by the European Commission under the Sixth Framework Programme for Research and Development /1
Policy and Research
Recommendations Report
SPUTNIC – Strategies for Public Transport in Cities
TABLE OF CONTENTS
Executive Summary
0.Introduction
0.1.SPUTNIC objectives
0.2.Operational approach of SPUTNIC
0.3.Structure and aim of this document
0.4.Acknowledgement
1.Set up sound and stable framework conditions
1.1.Establish long term urban mobility planning
1.2.Implement an accepted Market Organisation
1.3.Implement Public Service Contracts according to EU Regulation
1.4.Implement incentives
1.5.Implement monitoring systems
1.6.Verify and adapt legislation
2.Establish seamless multi-modal PT transport offers
2.1.Co-ordinate PT planning
2.2.Set up legislation that favours integration
2.3.Implement organisational models for integration
2.4.Raise awareness of the potentials of integration among all actors
2.5.Extend integration to other mobility service providers
3.Improve PT funding and financing balances
3.1.Check all options for tariff measures in order to increase revenues
3.2.Evaluate the possibilities of creating additional revenues by enlarging the operator’s service portfolio
3.3.Make use of market forces
3.4.Identify alternative sources to fund PT infrastructure and operations
3.5.Make use of EU funding and other special purpose funds
3.6.Make use of loans by International Finance Institutions
4.Stop (further) decrease of PT modal share – Increase modal share of PT
4.1.Concentrate on central indicators
4.2.Improve knowledge about current situation and development
4.3.Harmonise planning of PT services and urban planning
4.4.Increase knowledge regarding the further analysis of collected data
4.5.Include the analysis of potential customers with the analysis and monitoring of the PT market
4.6.Overcome prejudices (increase knowledge about social groups using PT)
5.Create a comprehensive marketing approach towards the promotion of PT
5.1.Promote marketing as a means to work with customers and to improve customer satisfaction
5.2.Promotion of service quality
5.3.Clear responsibility for PT marketing in different framework situations
5.4.Mobility management
5.5.Raising awareness of all target groups
5.6.Campaigns and information on changes in PT route or infrastructure
6.Match customer’s experiences with customer’s expectations towards PT
6.1.Show that actual PT services are much better than their public perception
6.2.Transformation of captive users into satisfied (loyal) customers
6.3.Provide different channels for customer comments
6.4.Put the customers into the centre of service provision (by adopting the customer’s eyes when viewing PT services)
6.5.Train staff in order to be proud of their work and act as ambassadors for their company
6.6.Create a better understanding of customers and potential customers
6.7.Drawing up a development strategy for a sustainable mobility environment
7.Improve the image of PT in the eye of decision makers and the public
7.1.Lobbying to convince decision makers of the values of PT
7.2.Increase awareness of PT both in the eyes of decision makers and general public
7.3.Opening companies to the public
7.4.Advertising the strengths of PT
7.5.Improve image based on emotional values
7.6.Share best practices within the EU
8.Improving of strategy and business performance
8.1.Introduction of new management methods like, EFQM Excellence Model, Total Quality Management, Value Based Management, Balanced Score Card, etc.
8.2.Develop a clear strategy and break down the goals to achievable targets to responsible managers within the organisation
8.3.Use of the Benchmarking technique in understanding (i) the firm’s operating environment and in assessing (ii) strategy, (iii) processes and (iv) Key Performance Indicators with respect to other organisations
8.4.Analyse performance indicators to investigate their suitability and compatibility and use them as a diagnostic tool
8.5.Improve involvement and management of stakeholders (identify stakeholders, create forums for strong involvement, manage relations)
8.6.Establish a contractual agreement (mid/long term) with the corresponding public/authority which includes topics relating to the service level to be provided, financial issues and the determination of the tariff system to be used
8.7.Act in more proactive, entrepreneurial approach
8.8.Improve knowledge on competitors
8.9.Improve the control of the business practices when new private partners are involved
9.A need for restructuring of the PT companies and authorities
9.1.Adjustment of organisational structure in accordance with a new mission, vision and strategy
9.2.Better use of change management methods and approaches, including analysing the company culture, planning and control and internal communication
9.3.Decentralisation and working with different business units
9.4.Use of modern IT technology for internal communication and culture change
9.5.Increase the efficiency of the structure and decision making processes through proper use of standard operating procedures
9.6.Improvement of outsourcing techniques and partnering
10.Solving the future Skill Gap by development of new competencies of staff
10.1.Introduction of up-to-date Performance Management methods for managers and employees
10.2.Greater emphasis on Competency Based Human Resources Management and Talent Management
10.3.Make better use of present EU research on vocational training and E-learning
10.4.Establish appropriate incentive schemes for middle management
10.5.Create new and transparent hiring processes to find more entrepreneurial type of top level managers
10.6.Create a learning culture in the organisation, including the use of modern learning technology (e-learning)
10.7.Intensify knowledge exchange between PT organisations and schools and universities
11.Increase of Public Transport effectiveness and attractiveness of technical and operational performance
11.1.Optimise the number of vehicles required by increasing the commercial speed
11.1.1.Consider upgrading the infrastructure (after lack of investments)
11.1.2.Consider fleet renewal with respect to cost factor
11.2.Optimise the maintenance process and the workshops
11.3.Reduce the travel time
11.4.Increase the travelling comfort
11.5.Additional strategic aspects
12.Conclusions
13.Target groups involved in policy recommendations
14.Abbreviation list
Executive Summary
This report describes policy and research recommendations identified throughout the SPUTNIC project work. The content of the report is based on the desk research and more important the input from external participants being experts in the respective four priority areas of SPUTNIC. The information is structured by grouping the strategies necessary for the improvement of the public transport sector into 11 policy recommendations of overriding importance.
Set up sound and stable framework conditions
The PT market is undergoing essential changes. In particular in cities and regions undergoing rapid economic development, legal framework conditions and responsibilities of the different actors fundamentally differ from the past. These developments have an important impact and bring the need of both internal changes in PT organisations and a new kind of relations between PT operators and authorities.So in practice long term and even short term planning is often difficult due to unstable or unclear regulatory settings. Furthermore frequent and aimless political interference as well as not cooperating PT companies are leading to spiralling downward PT services.Without clear and stable relationships operators are prevented from long term business planning.
Establish seamless multi-modal PT transport offers
Car users are used to enjoying a seamless and uninterrupted journey as a rule. There are exceptions, they may have to park a long way from their final destination, there are a few cases of congestion charging and there are pedestrianised areas where cars are banned. It is therefore obvious that one of the keys to attract more customers and advance the modal split for the benefit of PT lies in the integration of the PT transport chain – seamless travel.Integration of PT combines several major aspects such as network integration, timetable and passenger information integration, tariff and fare integration and service integration as well: “One network, one timetable, one ticket, one fare.”
Improve PT funding and financing balances
The low cost recovery ratio of PT in many countries must be dealt with. This is a problem not just in CEEC but in other MS as well. There is a danger that PT gets into a negative spiral where decision makers try to reduce deficits by reducing services; this may lead to less customers which leads to bigger deficits and so on. Politicians may then get tired of compensating PT when they see neither improved cost recovery nor improved ridership. Improving cost recovery for instance through competitive tendering may have social consequences for instance through different demands on PT staff and reduced job security. This must be dealt with to avoid social unrest and opposition to change.
Stop (further) decrease of PT modal share – Increase modal share of PT
One of the most important goals of PT operators, but also of planning departments at local, regional and national levels, is to stop a further decrease of the PT modal share or even – ideally – increase it. Despite this, the overall trend over the last few decades was towards less use of PT and increased car use. This trend has been supported and further strengthened by increasing rates of motorisation. Some operators were quite successful in stopping this trend and increasing their share; however in order to achieve this PT operators and other involved parties need a clear understanding of the transport market and of PT within this market.
Create a comprehensive marketing approach towards the promotion of PT
Marketing is an essential instrument of PT companies for winning new customers, and for binding them and existing customers to their company; it enables PT companies to reach the entire population, providing them with essential information for the use of PT services. Furthermore marketing measures can help the PT operator achieve a positive standing in an increasingly competitive transport market towards other modes and competing PT operators. Marketing in PT is no longer limited to the provision of timetables and some advertisements on buses, despite the thinking of some PT managers. However there is still a lot of room for improvement, mainly in small and medium sized companies, but also in some of the big ones. Within PT companies, marketing departments should work closely with all departments in developing a holistic approach ensuring that all employees are aware of and support its marketing efforts.
Match customer’s experiences with customer’s expectations towards PT
Customer satisfaction is the degree to which customer expectations of a product or service are met or exceeded by experiences. There are a lot of variables playing into this, and not all variables/reasons have the same impact on the decision whether or not to buy a product/service. Therefore any measurement of customer satisfaction needs to be able to take into account such differences, which makes the analysis of customer satisfaction a time intensive and difficult process. In the context of customer satisfaction, more and more PT companies are striving not just for customer satisfaction but for customer delight – an extra bit of added value that may lead to increased customer loyalty.
Improve the image of PT in the eye of decision makers and the public
The image of products and services has always played a major role in how they are viewed by the public and their subsequent success in the market place. It becomes especially important in times of increasing competition when companies want to raise their profile and increase their presence in the sector. While PT services are not as highly dependant on their image as for example, beverages or food products, the image is nevertheless an important factor in their success. PT companies have been becoming increasingly aware of this fact and have implemented a number of successful image campaigns.
Improving of strategy and business performance
A problem faced by many PT organisations and by those who work in them, is meeting the constant demand for high performance, which affects everything, from assuring sustainable financial growth of the organisation to satisfying the passenger at the next stop. But without the proper models of management and performance and the theoretical elements that drive them, PT managers and professionals are left with the task of interpreting each situation they face. Or even worse, they simply charge ahead in a trial-and-error mode. Business performance improvement theory and practice result in more powerful and practical principles and models to help practitioners identify and solve a wide range of performance problems: “If you can’t measure something, you can’t control it. If you can’t control it, you can’t manage it.If you can’t manage it, you can’t improve it.”
Consider restructuring of the PT companies and authorities
In all European countries the pressure on PT companies and authorities is very high due to radical changes that the industry is undergoing. These changes are focused predominantly on: the need for improvement of the economic situation and coping with competition in European cities and regions as well as the need for quality improvements, overcoming investment backlogs and establishing an organisational and financial framework for the business in CEEC. In both cases, restructuring is the keyword comprising the necessary changes, which of course are specific to each individual situation. The approaches are similar to a great extent and use "modern" management techniques, which have been implemented in other industries for a long time.
Solving the future Skill Gap by development of new competencies of staff
PT organisations in Europe are finding themselves sometimes ill-equipped to compete in the market. The reason is that too many managers and employees lack the right skills to help the organisation grow and succeed in continuously offering high quality PT. In this case you can talk of a widening gap between the skills the PT organisation needs for success and the current competencies of management and employees. A skill gap is a significant gap between an organisation’s skill needs and the current capabilities of its workforce. It is the point at which an organisation can no longer grow and/or remain competitive in PT because its managers and employees do not have the right skills and competencies to help drive business results and support the organisation’s strategies and goals.
Increase of PT effectiveness and attractiveness of technical and operational performance
In the new Member States many PT systems have been used very frequently in regions as well as in urban areas due to low fares and low level of car ownership; however there has been no focus put on economic efficiency. This has led to a large decrease in the quality of the equipment and infrastructure as well as the neglecting to modernise the technical level.
Key target is the reduction of operational and maintenance costs by optimising costs for fleet, infrastructure and technical equipment. The available investment budgets have to be used for long term investment and strategic measures in order to achieve a sustainable reduction of costs. It is the goal to produce the same or a higher level of service with higher cost efficiency.The transport provision offered can be modified to increase the attractiveness for the passengers. Primarily, this means improving the efficiency and reliability of PT, which may mean additional costs for the operator. However increasing of attractiveness should attract more new customers and consequently provide more income for the operator. Following an amortisation phase the return-on-investment can be achieved.
0.Introduction
Urban areas represent the backbone of economic wealth creation; they are the places where business is done and investments are made. The attractiveness of European cities is a key element in enhancing their potential for growth and job creation.At the same time, cities are confronted with the most transport-related environmental and health problems linked to high levels of traffic and congestion, poor air quality, high noise levels, high numbers of accidents, etc. The cost of road traffic congestion alone will reach 106 billion € by 2010 for the whole EU area.
With the clearly perceptible climate change as well as the significant energy import dependency, in particular for fossil fuels, the EU is facing unparalleled challenges.
Currently, urban transport, in particular motorised private transport, relying almost entirely on fossil fuels, accounts for 40% of green house gas emissions of the total road transport sector and up to 70% of other pollutants from transport.
Improving the urban transport system will mean a profound improvement in theliveability of European cities. To this end, more than ever before, sustainable solutions are needed in order to reduce the negative impact of transport on the urban environment. Solutions will have to strengthen and promote a well-functioning, attractive and energy-efficient transport system for passenger transport. These methods should allow for each city a specific combination of the private car, Public Transport and other modes like cycling or walking that is “optimal” in the sense that it meets mobility demand by addressing the users’ needs but also by following sustainability imperatives in a balanced way.
After the adoption of the EuropeanCommission Green Paper ”Towards a new culture for urban mobility” on 25 September 2007 the future of urban transport in Europe is still high on the EU political agenda with the recent submission of the European Commission Communication “A sustainable future for transport: Towards an integrated, technology-led and user friendly system”[1]. This Communication does not include a detailed programme of policy measures but identifies the trends and challenges that transport policy will have to deal with in the coming years; this is the first step to the adoption of a new White Paper on Transport Policy expected in 2010.Earlier than that an Action Plan on Urban Mobility is expected to be adopted by the end of 2009.