Multi-Operator Management and Franchising Support: ITS Evaluation Guide

Published August 16, 2022 in ITS Evaluation Guide

Public transport franchising, or a multi-operator model, has become increasingly common as transport authorities seek to deliver greater operational value from buses, trams, rail, or ferries, using specialist operators.

Services are defined by the authority and operated under contract by private companies, usually through a competitive tendering process. Multiple operators then provide the services.

The transport authority determines the routes, fare structures, and incentives to deliver a successful public transport service, making sure that the various networks are coordinated. This is part of a global trend where there is a clear separation between the transport authority that develops and oversees the public transport system and the operators operating and delivering passenger services.

This model has enabled transport authorities to enhance and improve service quality in Cape Town, London, and Singapore. For example, since Singapore has fully transitioned to the franchise model, there has been more reliable services leading to less overcrowding on bus services, less passenger wait time, and more services deployed. Overall, passenger satisfaction levels have increased to over 90% in Singapore.

ITS technology underpins the franchise model by ensuring the authority can plan and monitor all aspects of the network while operators can deliver and report on services. The ITS solution includes planning and operations, automatic vehicle location and control (AVLC), ticketing, headway management, real-time passenger information (RTPI), disruption response, depot management, and business intelligence. The ITS must be capable and scalable to monitor thousands of vehicles across multiple operators and account for future growth.

As the delivery of the services are entirely funded through the contracted performance delivered, generally the operator contracts include some mechanisms for operators to identify where services are impacted by external situations (road closures and specific disruption) with a mechanism to reflect this into the performance calculation. For example, if the road is closed and the bus is diverted, unable to call at some nominated stops, the operator should not be penalised for being unable to deliver services to these stops. Equally, if the vehicle breaks down or the driver goes the wrong way, the operator should not be compensated.

Therefore, often these systems include mechanisms to collect and manage this information, incorporating it into performance reports which feed into the monetary compensation. It is essential that these systems are trusted and present a common and validated point of truth.

Benefits

The benefits of using ITS for public transport franchise models include:

Role specialisation – operating an extensive, integrated public transport network is not easy. A franchised approach creates a separation of roles for the transport authority and the operator. This allows parties to focus on their areas of specialisation. When done correctly, the model leads to a better passenger experience.

Passenger-focused services – without the need for fare revenues to directly support each service, transport authorities can target service quality delivery, independent of specific route profitability, enabling services to be aligned to passenger requirements. ITS enables this service quality to be directly measured by the transport authority or operator.

Better passenger experience – transport authorities can focus on improving areas like ticketing, trip frequency, service reliability, passenger transfers, and passenger information. These improvements combined result in smoother trips for passengers.

Transparent performance management – ITS solutions offer transport authorities and operators comprehensive reporting and claims processing systems. These systems provide clear and transparent performance management and compensation for operators and ensure that transport authorities receive value for money.

Cost savings – opening routes for competition establishes a competitive environment and results in the best value for money. Lower costs and higher innovation levels are possible, as operators seek to improve efficiency to meet contract terms.

Evaluation Guide

When assessing ITS solutions to support public transport franchising models, the following questions should be asked:

1. Does the system accept schedules from multiple operators?
In a franchised model, operators still need to prepare schedules. Larger operators will use their own tool, though if the authority wishes to encourage smaller operators, it may require the system to include planning and scheduling facilities for these operators. Managing schedules is critical, as a scheduling solution, when integrated with the authority’s tools, enables operators to respond to tenders quickly with valid, competitive responses. Planners can prioritise their time on optimising schedules to maximise profitability. Make sure that your ITS accepts planning and scheduling information from multiple operators, who may use different software packages. You will need to decide on an appropriate data sharing standard for your region and mandate that operators use it to integrate data.

Where the authority uses an integrated schedule management solution, the system will need to support importing information from this solution, maintaining the separate operators’ data to maintain operator integrity.

2. Does the system support integration with passenger information and journey planning systems?
Integrated passenger information is essential in a franchised model. Passengers need to plan their journeys across different modes and transfer seamlessly without being concerned about who is operating each service. Passengers need to know exactly when their service will arrive through a selection of media, including printed timetables, information displays at stops, and mobile devices. This data can also be used on-board vehicles to show upcoming stops and stations and the predicted travel time between them. Ensure that your ITS solution has a single source of passenger information integrated across all operators, so your passenger information is consistent, accurate, and reliable across your network.

3. Does the system have connection protection?
Connection protection, also known as transfer protection, ensures that vehicles intended to exchange passengers between routes or modes can do so quickly and efficiently. Connection protection, if used, needs to align with the franchised contract service model. Otherwise, it can be counterproductive, for example, when franchised operators are paid by on-time service, but connection protection is used to hold vehicles back to ensure services connect.

4. Do you have a transport authority management layer?
The transport authority should have a high-level monitoring and management section to view the overall performance of the public transport system to see how each operator is performing. Some systems, for example London, have an active incident management capability over the top of the operator service management. The system should protect commercial data by ensuring strict segregation of operators, so each only has access to their own real-time and reporting information.

5. Does the system have comprehensive reporting?
When operating a public transport system with multiple operators, it is essential to have comprehensive reporting to give an overview of operations and a more detailed view of individual areas. Monitoring metrics such as on-time performance, travel times, and passenger numbers allows transport authorities to identify problem areas and provides opportunities to optimise these services.

The reporting should align with the contractual measures used to monitor and compensate operator performance. Accurate and consistent reporting will enable authorities to automatically compensate operators based on trips undertaken and measure performance against Key Performance Indicators (KPIs) defined in the contract.

6. Does the system have a contract performance management facility?
Advanced multi-operator systems are usually managed through a mileage and trips operated model, with KPIs based on the operational requirements – like on-time performance, passenger numbers, or other customised metrics. Make sure that your ITS provider has a business intelligence system that provides the reporting and metrics you require for contract management or can be customised to reflect the specific contractual measures required.

7. Do you want to adjust operator payments based on reasonable justifications?
Within operator contracts, there is usually a provision for recognising circumstances outside the operator’s control, sometimes known as a ‘Claim Processing System’ (CPS). This provides operators and transport authorities with a transparent, coordinated workflow for assessing and capturing the cause of disruptions, actions taken, impacts on services, and compensation claims.

Where trip validation underpins the KPI model and directs all operator payments, the CPS needs to assess whether every trip was delivered according to the contracted service. If trips are disrupted, operators need to justify their actions and have these approved by the authority. KPI calculations are updated in line with the approved claim. Given that missing trips and deviations will be contentious items, it is essential that the ITS real-time system is reliable, transparent, and completely trusted by all parties.

Make sure the ITS solution can be configured to reflect agreed operator contracts. It should provide reliable data and allow documentation to support service variation claims. The authorisation should automatically transfer claims through to the compensation mechanism.

For great examples of how ITS can help public transport franchising and multi-operator management, see our case studies on the Singapore Land Transport Authority and Transport for London bus services. For more franchising information, read more at our blog and whitepaper.

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Download the ITS Evaluation Guide – Analysis

Mode of Transport

Public Transport Authorities, Bus, Trams/Light Rail, Ferry

Solutions

Intelligent Transport Systems

Meet the author

David Panter

Industry Solutions Manager, ITS

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