On The Buses: The Benefits of Private Sector Involvement in the Delivery of Bus Services
- Special Report
Buses provide extensive public transport coverage in Australia’s capital cities, including regular timetabled services and school buses. In metropolitan areas buses provide approximately 40 per cent of overall public transport trips amounting to nearly 600 million journeys per annum, or roughly 1.5 million trips each day. Buses are the most significant public transport mode in all major cities other than Sydney and Melbourne.
Across Australian major capital cities, bus services cost approximately $2.8 billion each year to operate, with around 20-25 per cent of this cost paid by passengers, and the remaining 75-80 per cent paid by governments. Getting the best value for money from these services is therefore an important area of transport policy.
There is strong evidence from Australia and internationally that the private sector can deliver bus services more cost effectively than government operators. Around the world unit costs savings on transition from public to private operations have ranged from 20 per cent to as high as 55 per cent. Typical areas of greater efficiency include improved staff productivity, greater labour flexibility, better asset utilisation, more efficient procurement and leaner head office structures.