Algorithm for Optimal Bid Packaging for Competitive Contracting in Public Transit

Abstract

Transit planning has traditionally been approached from the point of view of a single, public operator that dominates transit service provision. Transit market arrangements that encompass a larger potential role for the private sector in providing transit services in a competitive environment have created new opportunities for improved service efficiency and have enhanced operational sustainability. Such evolving market arrangements are bound to necessitate a transformation in the traditional transit planning approaches. Research revisited some transit planning tasks in view of evolving transit market and regulatory arrangements and investigated the implications of one such market arrangement, namely, competitive contracting, for mass transit service design. Competitive tendering elements that relate to determining the size of the contract to be tendered as well as the allocation of routes among bid packages (also known as service design) are addressed. The methodology developed in the research comprises a decision support tool for the planning of transit service tendering, with the modeling framework using a genetic algorithm–based approach to optimal bid packaging. The proposed modeling framework and case study provide a much-needed tool for the analysis of how possible moves to new market arrangements in the transit environment may achieve service sustainability objectives and reduce or eliminate the need for subsidies. The framework is useful for transit authorities wishing to contract out routes in their bus networks.

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