STATE OF THE INDUSTRY Vital statistics Strategic outlook BRT/BBS review 2018 Australasia Bus Conference Wednesday, 10 October 2018

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1 STATE OF THE INDUSTRY Vital statistics Strategic outlook BRT/BBS review 2018 Australasia Bus Conference Wednesday, 10 October 2018 Yale Zhuxiao Wong Institute of Transport and Logistics Studies University of Sydney Business School Acknowledging: David A Hensher Loan Ho The University of Sydney Page 1

2 Overview The University of Sydney Page 2

3 Context for Projects A BIC/ITLS joint initiative The University of Sydney Page 3

4 Context Buses the most important mode of public transport Industry employs more than 50,000 people bus/coach operators, supply/value chain 2018 update to 2003 Fact Sheet: Passenger Transport Activity in Australia Reference/advocacy tool Data from ITLS, BIC, ABS, BITRE, states/territories Vital statistics, strategic outlook, policy commentary The University of Sydney Page 4

5 Report(s) contents State of the Industry Passenger statistics Vehicle statistics Fleet statistics Chassis/Body manufacturers Coach sector and tourism dollar Bus axle mass limit review Road user taxes and charges Costs in the bus and coach business Operating expenditure and productivity Bus driving profession Transport safety Contractual developments/reform Future technologies/business models BRT/BBS Review Australian comparison Overseas experience The University of Sydney Page 5

6 Passenger and Vehicle Statistics Contribution to moving people The University of Sydney Page 6

7 Billions National passenger mode share 17% 4% National mode share by passenger kilometres ( ) 5% 10% 64% Passenger cars Buses Rail Air Other National bus/coach mode share historical trend ( ) 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% National passenger kilometres Bus share of land passenger modes The University of Sydney Page 7

8 Billions Capital city passenger mode share Capital city bus/coach mode share historical trend ( ) 0 Capital city passenger kilometres Bus share of urban modes 4.2% 4.0% 3.8% 3.6% 3.4% 3.2% 3.0% 1% 6% 9% Capital city mode share by passenger kilometres ( ) 0% 4% 0% 80% Passenger cars Commercial vehicles Motor cycles Rail Light rail Bus The University of Sydney Page 8

9 Thousands Thousands Average kilometres travelled by each bus/coach Average kilometres travelled bus/coach by area of operation ( ) Capital city Other urban areas Other areas Interstate National average Average kilometres travelled bus/coach by service type ( ) Route service Dedicated school Charter service Other Total The University of Sydney Page 9

10 Millions Total kilometres travelled by each bus/coach 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total kilometres travelled by service type ( ) Other 300 Charter 200 School 100 Route 0 Total kilometres travelled ( ) Route service School service Charter service Buses with 20 or more seats Tour service Buses with fewer than 20 seats Other The University of Sydney Page 10

11 Fleet Statistics Buses and coaches on register The University of Sydney Page 11

12 Thousands Buses/coaches on register 30 Number of buses/coaches on register by state/territory (2017) NSW VIC QLD SA WA TAS NT ACT The University of Sydney Page 12

13 Bus operators in Australia Estimated 3,500 bus operators in Australia 58 metro operators Top 15 operators own 15% of fleet (14,865 buses) Operator Depots Fleet Transit Systems Australia 28 2,214 ComfortDelGro 27 1,849 Transdev 19 1,790 State Transit (NSW) 8 1,452 Transport for Brisbane 7 1,223 Keolis Downer 22 1,118 Ventura Bus Lines Busways Group Australian Transit Group Transit Australia Group The University of Sydney Page 13

14 Fleet age profile Buses on register by age (2017) 25% 30% 17 years years 7-11 years 0-6 years 28% 17% Average age of bus/coach fleet by state/territory The University of Sydney Page 14

15 Road transport fuel consumption Road transport average rate of fuel consumption (L/100km) Buses Non-freight carrying trucks Articulated trucks Rigid trucks Light commercial vehicles Motor cycles Passenger vehicles and after 2001 to and earlier The University of Sydney Page 15

16 Bus vs. rail life-cycle emissions MULLEY, C., HENSHER, D. A. & COSGROVE, D Is rail cleaner and greener than bus? Transportation Research Part D: Transport and Environment, 51, All rail All buses All Rail transport Non-CO2 effects (direct and indirect) Non-CO2 effects (direct and indirect) Upstream CO2 (electricity supply) Upstream CO2 (electricity supply) Upstream CO2 (petroleum refining) Upstream CO2 (petroleum refining) In-vehicle CO2 (estimated freight locomotives, In-vehicle CO2 diesel) (estimated passenger In-vehicle locomotives, CO2 diesel) (estimated passenger locomotives, diesel) All Buses Non-CO2 effects (direct and indirect) Non-CO2 effects (direct and indirect) Net upstream CO2 (petroleum refining, biodiesel Net upstream and CNG CO2 supply) (petroleum refining, In-vehicle biodiesel and CO2CNG (estimated supply) non-urban bus In-vehicle component) CO2 (estimated urban bus In-vehicle component) CO2 (estimated urban bus component) The University of Sydney Page 16

17 Manufacturer Statistics Chassis and bodies The University of Sydney Page 17

18 Chassis manufacturers Chassis market share by year ( ) Volvo Scania Mercedes-Benz BCI MAN Other 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Chassis market share by state (Total ) NSW VIC QLD WA SA TAS ACT NT Volvo Scania Mercedes-Benz BCI MAN Other The University of Sydney Page 18

19 Body manufacturers 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Body market share by state (Total ) NSW VIC QLD WA SA TAS ACT NT Volgren Custom BCI Bustech Higer Other Body market share by year ( ) Volgren Custom BCI Bustech Higer Other The University of Sydney Page 19

20 Top body plus chassis combinations Chassis Body Deliveries Volvo Volgren 2,882 BCI BCI 1,344 Scania Custom 860 Scania Volgren 675 Mercedes-Benz Volgren 632 Higer Higer 538 Volvo Custom 530 Bustech Bustech 386 Mercedes-Benz Custom 342 Volvo Bustech 300 The University of Sydney Page 20

21 Delivery characteristics Deliveries and their applications 2500 Deliveries by emissions standards ( ) Long distance Charter Route School Seat belts fitted No seat belts Euro 3 Euro 4 EEV Euro 5 Euro 6 The University of Sydney Page 21

22 Case study: Chinese manufacturers Chinese chassis manufacturers market share ( ) Chinese body manufacturers market share ( ) % 25% 20% 15% 10% 5% 0% % 30% 25% 20% 15% 10% 5% 0% BCI Bonluck BCI Bonluck Higer King Long Higer King Long Yutong Percentage Chinese Yutong Percentage Chinese The University of Sydney Page 22

23 Capital and Operating Costs Costs in the bus and coach business The University of Sydney Page 23

24 Capital cost ATAP Australian transport assessment and planning guidelines: M1 Public transport. Canberra, Australia: Transport and Infrastructure Council. Mode or Vehicle type Capacity (Seated plus standees) Cost per vehicle or consist Economic life Equivalent annual capital costs Annual cost per passenger capacity Bus (Diesel) Mini 19 $140, $18,800 $990 Midi 48 $340, $33,100 $810 Rigid standard 65 $430, $41,800 $730 Rigid long 78 $500, $48,700 $720 Articulated 90 $650, $63,300 $810 Double decker 100 $680, $66,600 $710 Bus (Gas) Rigid standard 65 $520, $51,500 $900 Light rail Bi-articulated 218 $5,000, $389,100 $2,160 Heavy Rail 3-car EMU 550 $9,000, $705,400 $1,500 The University of Sydney Page 24

25 Operating cost ATAP Australian transport assessment and planning guidelines: M1 Public transport. Canberra, Australia: Transport and Infrastructure Council. Cost category Units Bus (Diesel) Light rail Heavy rail On-vehicle crew $ per train/bushour Direct vehicle $ per train/buskm operating costs Infrastructure $ per annum per operations and track-km maintenance 100, ,000 Overhead costs % on other operating costs Profit margin % on total operating costs The University of Sydney Page 25

26 Cost efficiency $7 $6 $5 $4 $3 $2 $1 $0 Cost per service kilometre by city (2017 estimate) SMBSC Private OSMBSC Private Brisbane Perth Adelaide AVERAGE Gross Cost Net Cost The University of Sydney Page 26

27 Bus Driving Profession The dream of every boy (Kompier, 1996) The University of Sydney Page 27

28 Fast facts Item Industry average Average for all jobs Weekly pay $1,151 $1,230 Employment size 41,100 workers Future growth Stable Skill level rating Lower skill Unemployment Lower unemployment Full-time share 67.3% 68.4% Average full-time 38.5 hours 40.0 hours Average age 56 years 40 years Gender share 14% female 46.7% female The University of Sydney Page 28

29 Education profile Bus and coach drivers employed by education level (2016) Below Year 10 Years 11 & 10 Year 12 Certificate III/IV Advanced Diploma/Diploma Bachelor degree Post Graduate/Graduate Diploma or Graduate 0% 5% 10% 15% 20% 25% 30% All Jobs Average Bus and Coach Drivers The University of Sydney Page 29

30 Age profile: A silver tsunami 30% Bus and coach drivers employed by age profile (2017) 25% 20% 15% 10% 5% 0% and Over Bus and Coach Drivers All Jobs Average The University of Sydney Page 30

31 Thousands Key challenges High turnover, staff retention issue Stresses and abuse, irregular hours High barriers to entry (upfront costs + fragmented qualification) Professionalise the industry Bus captains (HK, SG) Engrain customer service and free from labour work Centrally recruit and train drivers, then deploy amongst individual operators Workforce trend and projection ( ) The University of Sydney Page 31

32 Bus safety Fatalities involving heavy vehicles ( ) Articulated truck Bus Heavy rigid truck Total fatalities (right) 1,600 1,400 1,200 1, Cross modal comparisons show bus is safest road transport 0.4 deaths per billion km c.f. 3.1 in car (110 motorcycle) 2/3 fatalities occur outside bus Seat belts (school/rural) Bus design (ADR) Driver training Speed limiting (standees) The University of Sydney Page 32

33 Contractual Developments Reforms and best practice WONG, Y. Z. & HENSHER, D. A The Thredbo story: A journey of competition and ownership in land passenger transport. In Alexandersson, G., Hensher, D. A., & Steel, R. (Eds.), Competition and Ownership in Land Passenger Transport (Selected papers The University of Sydney from the Thredbo 15 conference). Research in Transportation Economics. Page 33

34 The early years Turn of the century Recent developments Market Arbitration Inaugural Thredbo STO framework Trusting partnerships conference (Australia) First Thredbo in the Global South Regulatory cycles First Thredbo in Asia (2019) Winner's curse Hierarchy of regulatory needs Actionable benchmarking Procurement Mechanism Asset Ownership Risk Allocation Competitive tendering the established norm Economic deregulation deemed inevitable Recognised role for negotiated contracts Beyond contracting; next generation economic deregulation Cost minimisation as main goal Ideal contract; macro contract context, risks and rewards SMART contract management and KPIs Idea to regulate the regulator Broader focus on user requirements Shared asset ownership Future mode regulation Mobility as a service contracts Contract Design Contract Management The University of Sydney Page 34

35 Regulatory cycle and STO framework Regulated public monopoly Regulated private local monopoly Competitive private supply Private sector area monopoly Strategic Transport policy (Regulator) Tactical System planning (??) Operational Service delivery (Operator) Adapted from GWILLIAM, K Bus transport: Is there a regulatory cycle? Transportation Research Part A: Policy and Practice, 42, Adapted from VAN DE VELDE, D. Entrepreneurship and Tendering in local public transport services. 5th International Conference on Competition and Ownership in Land Passenger Transport (Thredbo 5), 1997 Leeds, United Kingdom. The University of Sydney Page 35

36 Future competition and ownership issues Multi-modal contracts Access contracts Next generation deregulation Intermediate mode regulation Autonomous vehicle regulation Mobility as a service contracts Urban aviation regulation The University of Sydney Page 36

37 Case study: Singapore reform process Good practice: ITLS advised Management contracts with actionable benchmarking Two envelope process; focus on quality Rotating rounds Ideal contract size Published bid prices and evaluation panel The University of Sydney Page 37

38 From Workhorse to Thoroughbred Review of bus rapid transit and branded bus service performance HENSHER, D. A., WONG, Y. Z., HO, L. & CLIFTON, G From workhorse to thoroughbred: The University of Sydney Review of bus rapid transit and branded bus service performance and future opportunities. Page 38

39 Bus rapid transit (BRT) vs. Light rail transit (LRT) Choice vs. blind commitment (Hensher, 1999) Right-of-way vs. traction technology Modal ideology, political imperative BRT may have already lost the battle The University of Sydney Page 39

40 Bus rapid transit (BRT) vs. Branded bus services (BBS) Last minute bids of political desperation (Sydney, Canberra) Brand identity, service simplification (Currie and Wallis, 2008) BBS might be an acceptable alternative to LRT The University of Sydney Page 40

41 Studied systems City Service Fleet Brand Identity Bus Priority T-Way (Liverpool-Parramatta) Mixed None Low/Medium T-Way (North-West) Mixed None Medium Sydney M2 Busway Mixed None Medium Metrobus (Phase 1) Mixed/Dedicated Medium Low Metrobus (Phase 2) Mixed/Dedicated Medium None B-Line Dedicated Strong Low Melbourne SmartBus (Original) Dedicated Strong None SmartBus (DART) Dedicated Strong Low Brisbane Busway Mixed None High Bus Upgrade Zone (BUZ) Mixed Weak Medium Perth Central Area Transit (CAT) Dedicated Strong Low Adelaide O-Bahn Mixed None High Canberra Rapid Mixed Weak/Medium Low The University of Sydney Page 41

42 Raw passenger boardings / Service kilometre / / Average headway Gross performance ratio (pax/skm/headway) Sydney Bus Rapid Melbourne Transit Branded BrisbaneBus Serivice Perth Adelaide Generic Services Canberra The University of Sydney Page 42

43 Normalised passenger boardings / Service kilometre / Average headway Net performance ratio (Normalised) Sydney Bus Rapid Melbourne Transit Branded BrisbaneBus Serivice Perth Adelaide Generic Services Canberra The University of Sydney Page 43

44 Normalisation procedure Category Attribute Statistically Significant Dedicated carriageway Bus priority Dedicated lane Signal priority Premium stations Brand identity Soft branding Hard branding Service type Downtown circulator Radial inner Radial outer Cross-town/Orbital Feeder/Coverage Direct competition Other attributes Free service City-specific dummies The University of Sydney Page 44

45 Absolute difference: Net versus gross performance Net versus gross performance comparison Sydney Bus Rapid Melbourne Transit Branded BrisbaneBus Serivice Perth Adelaide Generic Services Canberra The University of Sydney Page 45

46 Overseas experience The University of Sydney Page 46

47 New (?) technologies and opportunities The University of Sydney Page 47

48 Next Steps Plus a bit of cross-promotion The University of Sydney Page 48

49 Where to access the reports? Ask Michael Apps (!) Do BIC Industry Census More information: The University of Sydney Page 49

50 The University of Sydney Page 50

51 Thredbo 16 Singapore, August 2019 Models of mainstream public transport provision Practical considerations in implementing different institutional regimes Emerging business models and implications for the transport ecosystem Realising the potential benefits of demand-responsive travel How much regulation should disruptive transportation technologies be subject to? Better service delivery through modal integration Assessing the wider benefits of public transport projects Beyond the farebox: Sustainable funding of public transport by better understanding service values More information: The University of Sydney Page 51

52 Certificate of Transport Management July 2019 CTM/CTMR a professional development course for bus/coach industry staff Knowledge and skills in management, planning and policy How to run an efficient and successful transport service Important industry qualification for middle/senior management More information: The University of Sydney Page 52

53 ITLS public transport research team The University of Sydney Page 53

54 Recent publications BRAY, D., HENSHER, D. A. & WONG, Y. Z Thredbo at thirty: Review of papers and reflections. In Alexandersson, G., Hensher, D. A., & Steel, R. (Eds.), Competition and Ownership in Land Passenger Transport (Selected papers from the Thredbo 15 conference). Research in Transportation Economics. In press, corrected proof. HENSHER, D. A Future bus transport contracts under a mobility as a service (MaaS) regime in the digital age: Are they likely to change? Transportation Research Part A: Policy and Practice, 98, HENSHER, D. A Tackling road congestion What might it look like in the future under a collaborative and connected mobility model? Transport Policy, 66, A1-A8. HO, C., HENSHER, D. A., MULLEY, C. & WONG, Y. Z Potential uptake and willingness-to-pay for mobility as a service (MaaS): A stated choice study. Transportation Research Part A: Policy and Practice. 117, WONG, Y. Z Corporate mobility review: How business can shape mobility. Sydney, Australia: Sustainable Business Australia. WONG, Y. Z Mobility as a service (MaaS): What does it mean for the NSW bus & coach industry? Bulletin. Sydney, Australia: BusNSW. WONG, Y. Z. & HENSHER, D. A The Thredbo story: A journey of competition and ownership in land passenger transport. In Alexandersson, G., Hensher, D. A., & Steel, R. (Eds.), Competition and Ownership in Land Passenger Transport (Selected papers from the Thredbo 15 conference). Research in Transportation Economics. WONG, Y. Z., HENSHER, D. A. & MULLEY, C Emerging transport technologies and the modal efficiency framework: A case for mobility as a service (MaaS). 15th International Conference on Competition and Ownership in Land Passenger Transport (Thredbo 15). Stockholm, Sweden. WONG, Y. Z., HENSHER, D. A. & MULLEY, C Mobility as a service (MaaS): Charting a future context. WONG, Y. Z., HENSHER, D. A. & MULLEY, C Mode-agnostic mobility contacts: Identifying broker/aggregator models for delivering mobility as a service (MaaS) [Part I: Experimental Design]. 40 th Australasian Transport Research Forum (ATRF). Darwin, Australia. WONG, Y. Z., HENSHER, D. A. & MULLEY, C Mode-agnostic mobility contacts: Identifying broker/aggregator models for delivering mobility as a service (MaaS) [Part II: Model Estimation]. Transportation Research Board (TRB) 98th Annual Meeting. Washington, D.C., United States. The University of Sydney Page 54

55 STATE OF THE INDUSTRY Vital statistics Strategic outlook BRT/BBS review 2018 Australasia Bus Conference Wednesday, 10 October 2018 Yale Zhuxiao Wong Institute of Transport and Logistics Studies University of Sydney Business School Acknowledging: David A Hensher Loan Ho The University of Sydney Page 55