Experiences with Competitive Tendering of Bus Services in Germany
After a long transition period with only a few isolated procedures for competitive tendering, the market for German public transport bus services has seen numerous such tenders in recent years. The results are complex. From the public transport authorities’ point of view, the
main effects are a decrease in subsidy payments, with relatively low expenses relating to the tendering process (allocation, contract management). The overall level of competition is high, with five to seven bidders on average, although this has been declining in recent years. Entry barriers
have been identified at significant levels for several parameters, especially with respect to the volume tendered and the revenue risk to be borne by the operator out of net‐cost contracts. Demonstrably small‐ and medium‐sized transport operators have been able to increase
their market share in the starting phase of introducing tendering, with diminishing success rates in recent years. Due to the increased quality requirements in competitive tendering, the quality of public transport available has improved considerably, and environmental standards have been
better implemented and sustained. As far as employees are concerned, a trend towards wages below the wage rate of private operators cannot be observed. However, their level is well below the level of public incumbent operators.
Keywords: K23; L51; L92; L98; R48
Document Type: Research Article
Affiliations: Institute of Economic Policy Research, Karlsruhe Institute of Technology, Karlsruhe, Germany
Publication date: 01 May 2011
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