Local Public Transport

Content

• Introduction

• Consumer Perspective

• Opportunities and Threats

• Future Technologies in Public Transport

• Political Constraints

• Outlook

Introduction

When looking at urban street mobility, it is crucial to also have a look at local public road transport, i.e. city buses and trams. In this regard, local is here defined for trips lengths up to 50km or one hour. In contrast to the automotive market, the market for public transport is not free, but considered a public duty and is therefore state regulated. Specifically, public transport is supposed to be determined by socio-political, economic and transport policy developments. [1]

Thus, there is no free competition and the market entry as well as the order situation of involved enterprises is determined by local authorities. Markets are further spatially limited by local political boarders and timely restricted permissions. [1]

In 2018, the Germans used local public transport on average 141 times per year [2], which makes up for 11.6% of transportation. [3] About 45% of local public transport trips are absolved in line buses. Looking at the development of trip numbers, there was a 9% increase in 2018 compared to 2008, while the number of city bus trips stayed constant. [2] This translates into 42890 local street public transport vehicles (buses and trams). [2] The Association of German Transport Companies (VDV) plans to increase the public transport – and therefore also local public road transport – by 30% until 2030 to reach climate protection targets in the transportation sector. However, this requires not only steps of transport providers, but also legal and governmental conditions. [2]

Consumer Perspective

Taylor et al. (2009) elaborate two dimensions - “nurture factors”, which operators can control and “nature factors”, being outside of the operator’s control. [4]

Income, as a nature factor has negative effects on public transport demand. [5] As an increase in income decreases demand, PT is perceived as inferior good. [6] Similarly, people owning a car are less likely to use public transport, even if fares are lowered. [5] Additionally, related factors such as parking space and gas price have a significant effect on public transport usage. [6] Decreasing urban parking spaces and increasing parking fares are therefore viable measures to increase the attractiveness of local public transportation. [7] A further nature factor is the distance to transport networks. Generally, people in densely populated areas like large cities use buses more intensively [8], whereas people in less densely populated areas are more likely to use cars. [5]

Nurture factors in contrast to nature factors are much easier to control for bus operators. Looking at fares – which amount to over 50% of operators’ revenue - elasticities are quite low, which gives bus operators the opportunity to increase their revenue by increasing fares. This however implies, that reducing fares has a limited effect on adoption of local public transport. Providing free local public transport increases its usage up to 25%. [9] However, this effect is driven by people switching from walking or biking to public transport, while car owners barely switch modes. [9] Thus, free local public transport is not only unprofitable and therefore expensive for regulators – and hence for taxpayers, but appears to be insufficient to reach homemade goals of e.g. the VDV, as well as a to have a significant impact towards an urban green traffic change. [7] In contrast, service is a crucial nurture demand factor including factors like schedules, route network, travel time, punctuality and comfort. Optimally, these factors should interact, so that customers can travel to any destination anytime, in a quick manner and without interchanges and waiting time. [9] Service frequency, measured by operated vehicle-kilometers, is a related factor that significantly drives demand. [4] Fiorio, Florio and Perucca (2013) found that users are more satisfied with monopolistic local public transport operators, since services are more integrated when there is a single operator in the market. [10]

Additionally, out-of-vehicle time, such as transferring and the way to- and from the stations – referred to as the “first mile, last mile” problem, sometimes has an even more significant impact on demand than fares and the actual time in the vehicle. [6] Especially in rural areas, this can be a major problem due to lacking network density, leading to longer ways to- and back from bus / tram stops. This reduces the attractiveness of local public transport and leads many inhabitants to opt for driving the entire distance by car. [11]

Threats & Opportunities for Local Public Transport

A threat for buses and trams is the opportunities that the future developments of cars will present: cars are likely to become autonomous and connected, which might make them so called “third places”. A car ride is therefore not at all going to be an expense, but convenient and potentially productive. This is not only because the focus is steered away from traffic, but also because the interior is comparable to one’s home or office, respectively. [12] Furthermore, buses and trams, just like rails, are bound to fix routes and schedules and therefore inflexible, which contradicts consumers’ need for constant independence and flexibility. [12]

A development that might favor an increase in the usage of buses and trams is the high importance that environmental sustainability has for many people. [13] Additionally, Nordlund and Garvill (2003) found that environmental beliefs impact pro-environmental behaviors such as the choice of the mean of transport. Hence, societal, pro-environmental developments favor sustainable modes of transport like buses and trams over using one’s own car. [14]

Technologies

Alternative Powertrains

While trams with their overhead lines typically have an electric engine, nowadays, a wide range of bus manufacturers offers electric city bus solutions, too. Looking at German manufacturers, MAN and Mercedes Benz buses each offer an electric city bus model with the MAN Lion’s City E and the eCitaro. [15] [16] Also, especially in Europe, Solaris is an important player when it comes to emission-free urban public transport, offering an electric city bus model, a hydrogen powered model and one trolley bus model. [17] Especially Chinese manufacturers focus on electrification, like the market leader Yutong offering various models, selling more than 16,000 sold electric vehicles per year all around the globe. [18]

When it comes to the range of electric city buses, the electric battery provider Proterra provide solutions resulting in 150 to over 500 km reach [19], depending on two factors: firstly, the energy contained in the installed battery and secondly, the operating efficiency, which depends on weather, terrain and stops and driving behavior. [20] Knowing that city buses are confronted with a high number of stops, such as stations, traffic lights and congestion, efficiency is not optimal in this application. The Dutch manufacturer VDL promises a reach of at least 250km per battery charge for their city bus model, allowing to operate the vehicles around the clock. [21] Similarly, the 441 kWh lithium-polymer batteries installed in the Mercedes-Benz eCitaro translate into a reach between 230 and 330 kilometers. [22] Complementary, fast charging solutions are being researched. VDL for example offers a pantograph solution that enables a full charging within 75 minutes. [23]

Overall, battery powered buses are the most rapidly growing and widely spread alternative powertrain in this sector. In 2020, there were 304 new registrations of electric city buses in Germany, resulting in 502 battery-powered electric vehicles and 64 hydrogen fueled vehicles. [24] Overall, there were 500,000 electric buses in operation globally. [25]

According to the Electric Vehicle Outlook 2020 by Bloomberg, 67% of city buses will be electric in 2040. Petrol- and hydrogen powered city buses complement the fleets especially in areas, where charging infrastructure for electric batteries lacks. The fact that hydrogen fueled buses have a comparably low forecasted share of 6.5% is explained by the low share of hydrogen fueled passenger cars and missing comprehensive rollout of hydrogen infrastructure. [26]

Accordingly, hydrogen fueled buses are the second most promising technology for city bus transportation. Although many bus manufacturers do not offer a hydrogen model, the Polish company Solaris for example does offer one hydrogen city bus. Not only does it have a range of around 350km, but also offers a comparably quick refueling process. [27]

Autonomous Driving

Technological innovation for city buses is however not limited to alternative powertrains. Autonomous driving is a potential solution not only for passenger cars, but also for buses. The Chinese manufacturer Yutong tests intelligent unmanned buses, which drive autonomously. Besides, the vehicle is connected to e.g. traffic lights, manages energy efficiency, charges automatically, can be steered remotely and provides many more features. [28] The Spanish bus manufacturer Irizar similarly already tests a first fully autonomous city bus in Málaga. [29] Daimler offers a smart city bus with integrated systems collecting extensive data from the environment and is connects with the infrastructure such as traffic lights. This allows for partially autonomous driving, which increases fuel efficiency, relieves the driver, increases safety and increases comfort for passengers. Additionally, a futuristic, comfortable interior design strives for customer satisfaction and onboard experience. [30]

Not only autonomous buses are investigated, but Siemens also tests autonomous shuttles, i.e. small autonomous vehicles that drive up to 50 km/h. This new mode of transport is not necessarily meant to be a substitution of existing public transport modes, but is supposed to enhance intermodal local public transport, as a solution for the first - and last mile. Passenger safety is provided by the autonomous driving software interacting with an intelligent infrastructure. In cooperation with automotive manufacturers, Siemens aims to provide a customer-centric on-demand solution, reducing waiting times and distances to public transport stops. Customers can request a shuttle via an app, which additionally provides intermodal information, integrating the shuttle solution into existing public transport. [31]

Platooning

In certain areas, the technology of platooning might be an interesting one for city buses. Therefore, multiple vehicles are connected via a software, and only the leading vehicle needs a driver, all following vehicles can be programmed to only follow behind. The virtual connection can easily be established and disconnected. This allows operators to provide a sufficient amount of vehicles depending on specific demand situations. In rush hours, vehicles can easily be connected to serve the demand, and then be disconnected when demand decreases. This makes different vehicle sizes and trailers redundant and is therefore cost-efficient. Karlsruhe University in cooperation with Munich public utilities and the Dutch manufacturer EBUSCO plans to establish Platooning in Munich’s local public transport by 2025. [32]

Infrastructure

Comparing technological innovation in street mobility with rail mobility, one can see a clear surplus of innovative solutions in street mobility. An explanation may be the innovative power of the free automotive industry, amounting to 2.755 billion USD annual revenue [33], versus the largely nationalized rail industry with 110 billion USD. [34] This vast automotive industry also radiates innovative power to public street transportation in terms of alternative powertrains, vehicle design or autonomous driving technologies. Moreover, the extensively developed street infrastructure certainly is advantageous for city bus and tram providers since routes can be planned around the dense network of existing urban streets and also easily altered. The vast majority of urban houses are additionally very well connected to the street network, helping to reduce the extent of the first – and last mile problem. On the other hand, city buses and trams share this street network with passenger cars, trucks, bikes etc. and are therefore exposed to construction work, traffic jams and car accidents.

Political Constraints

In general, public transport is state-subsidized, meaning that although ticket sales are the largest revenue source, operators are not profitable and are dependent on financing by political institutions. Webster & Bly (1982) conclude that subsidization of local public transport brings the desired effect of keeping fares lower and patronage numbers higher than they would be without subsidization. [9]

However, buses are for example also affected by political regulations. According to an EU resolution in 2019, there is a binding procurement ratio for emission-free buses: 45% of all newly registered buses from 2021 – 2025 must be emission-free, while from 2026-2030 this must be the case for at least 65% of new buses. [35] While this is certainly an accelerator for innovation within this field, German bus operators feel patronized and restricted in their freedom of choice, having planned to increasingly focus on fuel-efficient petrol buses. [2]

As discussed before, an important lever for the future of local public transport, especially tram and bus, is the political constraints imposed on passenger cars in cities. Potential political measures like car bans in rural areas, limiting the amount of urban parking areas, increasing fuel prices or similar measures aim to make the urban use of passenger cars unattractive and hence increase expected patronage of local public transport. Besides carbon emissions, governments have an interest in a strong public transport and fewer passenger cars for reasons of urban design, air quality, noise pollution, etc

Outlook

In conclusion, to make users switch from using their car to using local public transport, a versatile set of measures is likely to be successful. On the one hand, the demand for local public transport will grow if municipalities reduce the attractiveness of using the car. Such measures include parking space reduction, urban speed limits and car-free zones, so that car owners are incentivized to switch modes. [7] Also, fuel prices are expected to increase, promoting a move towards shorter travel distances with slower, but cheaper modes. [9] However, such measures on their own deteriorate overall transportation services and do not reflect the growing need for urban transportation. [2]

Thus, on the other hand, constraints for passenger cars must go alongside an improvement of local public transport’s attractiveness. [36] Firstly, a crucial lever is a heightened service level with reduced waiting times, a large and dense network and inter-modal solutions for the first and last mile. [6][9] Secondly, improvements of onboard service like onboard WiFi, appropriate capacity on board and a high comfort level help to reduce the convenience gap compared to future “third place” cars. Finally, further test trials of free local public transport in combination with the above-mentioned measures may lead to a further increase in patronage. [7]

In a scenario including a combination of the mentioned measures: an increase of local public transport usage by 38% and a decrease in passenger car usage by 38% is expected, compared to a scenario sustaining the status quo. [37]

Sources

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