Market and financing

Management, agreements, pricing and forms of funding for resource-efficient and attractive public transport.

Market and financing

bild marknad och finansiering

The public transport market is characterised by a dynamic relationship between supply and demand, and the fact that a significant part of the supply is funded by taxes. Most of the local and regional public transport in Sweden is operated as procured transport services. This means that the conditions for public transport are largely determined within the framework of a scheme involving public clients and private contractors. For several years and in different ways, it has been an ambition of regional public transport authorities to influence the costs, quality, environmental performance, supply and demand by means of new contractual models, such as through incentives for the operators.

These models have consequences for passengers and for the design of the transport system. In addition to the procured transportation, there are public transport services provided on commercial terms, as well as public transport in its own right. Regional public transport is financed partly through taxes and partly through ticket revenues. The future investment needs and operating costs of public transport and how these are to be financed is a growing challenge, especially in light of ambitions to achieve an increased share of motorised travellers for public transport. Different price strategies can increase or reduce passenger numbers, and lead to increased or reduced operating costs.

Overall research issues
Understanding passengers' circumstances, preferences and experiences is fundamental to developing public transport in the desired direction. Knowledge is also needed about how organisational reforms affect the market in ways that create increased public benefits. Such reforms generate effects that may be intentional or unintentional and unforeseen.The following overall issues are emphasised within the area:  

  • How do different supply and price strategies effect passengers using public transport, e.g. differentiated pricing and free public transport, and how does it affect different groups of passengers with regard to e.g. availability and distribution? How can such strategies be implemented in ways that achieve policy goals regarding e.g. socio-economic efficiency, and which are also acceptable to citizens and the various social actors?
  • How do different contract and business models affect the market and how do they contribute to achieving politically determined goals, including how those goals are translated and interpreted, for example in contracts? How do requirements in the contracts affect the preconditions and expectations of those who provide public transport?
  • Which factors affects the conditions for public transport authorities and public transport companies within the existing procurement system, e.g. technology development, competition levels, standardisation of contracts? Which factors influence the choice of regime, e.g. the presence of commercial traffic and traffic operated independently? How can knowledge of these factors be used to develop the organisation of public transport?
  • What preconditions exist to change the funding of the operation of and new investments in public transport, e.g. in ways that more clearly link the funding to those who benefit from such measures? How does it affect the incentives of different administrative levels to implement measures?
  • In what way and with what result can value-creating partnerships between regional public transport authorities, transport companies and municipalities etc. help to develop the public transport market, including the ability to develop innovate solutions?

Expected result
The research is expected to lead to an increased understanding of the public transport sector's market conditions, how different strategies and business models affect the ability to achieve predetermined public transport objectives, including targets for increased passenger numbers and increased cost efficiency. The research also helps highlight and analyse new approaches to the funding of public transport in the future. The research will provide public transport authorities, public transport companies and other relevant actors with insights on the market's current organisation and how it can be developed in the future.


Impact of a lower demand during the COVID-19 pandemic on the frequency of dwell time delays

Ruben Kuipers & Carl-William Palmqvist, Transportation Research Interdisciplinary Perspectives, September 2023

Improving the Efficiency of Public Procurement: Empirical evidence using micro-level contract data

Ivan Ridderstedt, Doctoral thesis, KTH, September 2023

Effects on operating costs of adjusting bus departure times during peak-hour traffic in Sweden

Eva-Lena Eriksson, Helene Lidestam & Lena Winslott Hiselius, Research in Transportation Economics, September 2023.

Innovation in stable competitive tendering regimes: An insoluble knot?

Lisa Hansson, Malin Aldenius, Alexander Paulsson, Karin Thoresson & Birgitta Vitestam, Research in Transportation Economics, September 2023

Future Public Mobility - The next step for sustainable travel

Rådslaget, 2022.

Samverkan med effekter? Samverkansavtal mellan operatörer och regionala kollektivtrafikmyndigheter – så påverkas resande och kvalitet

Roger Pyddoke och Karin Thoresson, K2 Outreach 2022:1.

Marketization in Crisis: The Political Economy of COVID-19 and the Unmaking of Public Transport in Stockholm

Alexander Paulsson & Till Koglin. Critical Sociology 2022.

Large increases in bus use in Sweden: lessons learned

Maria Börjesson, Margareta Friman, Masoud Fadaei. Handbook of Public Transport Research 2021.

Do small cities need more public transport subsidies than big cities?

Maria Börjesson, Chau Man Fung, Stef Proost, Zifei Yan. Journal of Transport Economics and Policy 2019.

Do buses hinder cyclists or is it the other way around? Optimal bus fares, bus stops and cycling tolls

Maria Börjesson, Chau Man Fung, Stef Proost, Zifei Yana. Transportation Research Part A: Policy and Practice 2018.

Optimal prices and frequencies for buses in Stockholm

Maria Börjesson, Chau Man Fung, Stef Proost. Economics of Transportation 2017.

Steering green buses: The opportunities and challenges of introducing renewable fuel in public transport

Malin Aldenius, doctoral thesis, Lund University, October 2021

Partnership or franchising to improve bus services in two major English urban regions? An institutional analysis

Tom Rye, Robert Hrelja, Jason Monios, and Clare McTigue, Transport Policy Volume 114, December 2021

Funding public transport under pressure - the case of Amsterdam

Fabio Hirschhorn Zonana, August 2021

Public transport funding under pressure

John Hultén, Claus Hedegaard Sørensen, Elisabeth Lång, Fabio Hirschhorn Zonana and Jens Alm, K2 Working paper 2021:12

Evaluating bids on price and quality

Ivan Ridderstedt and Roger Pyddoke, K2 Working paper 2021:7

The passenger’s influence on dwell times at station platforms: a literature review

Ruben A. Kuipers, Carl-William Palmqvist, Nils O.E. Olsson, Lena Winslott Hiselius, Transport Reviews, February 2021

Penalties as incentives for punctuality and regularity in tendered Swedish public transport

Roger Pyddoke, Research of Transportation Economics, September 2020

Optimal fares and frequencies for bus services in a small city

Disa Asplund, Roger Pyddoke, Research in Transportation Economics, May 2020

Flexibility in contract design - is that possible?

Carolina Camén, Malin Aldenius, Panagiota Tsaxiri, Helene Lidestam, Research in Transportation Economics, November 2020

COVID-19 and Public Transport

Chiara Vitrano, K2 Working paper 2021:1

Flexibility in contract design: is that possible?

Carolina Camén, Panagiota Tsaxiri, Malin Aldenius and Helene Lidestam, ScienceDirect, July 2020

The impact on bus ridership of passenger incentive contracts in public transport

Andreas Vigren, Roger Pyddoke, Transportation Research Part A: Policy and Practice, May 2020

Why do cities invest in bus priority measures? Policy, polity, and politics in Stockholm and Copenhagen

Fredrik Pettersson and Claus Hedegaard Sørensen, Transport Policy, October 2019

Public transport regimes and mobility as a service: Governance approaches in Amsterdam, Birmingham, and Helsinki

Fabio Hirschhorn, Alexander Paulsson, Claus H. Sørensen and Wijnand Veeneman, Transportation Research part A, December 2019

Penalties as incentives for punctuality and regularity in tendered Swedish public transport

Roger Pyddoke K2 Working Paper 2019:6

Evaluation of free public transport for older people in Sweden

Tania Dukic Willstrand, Per Henriksson, Helena Svensson and Lena Levin, Proceedings of the 6th Humanist Conference, The Hague, Netherlands, 13-14 June 2018

An international review of experiences from on-demand public transport services

Fredrik Pettersson K2 Working Paper 2019:5

The impact on bus ridership of passenger incentive contracts in Swedish public transport

Andreas Vigren, Roger Pyddoke, K2 Working Papers 2019:3

Outcomes from new contracts with “strong” incentives for increasing ridership in bus transport in Stockholm

Roger Pyddoke, K2, VTI & Hanna Lindgren, Transportstyrelsen. Research in Transportation Economics Volume 69, September 2018, Pages 197-206

Evaluation of cost drivers within public bus transports in Sweden

Helene Lidestam, Carolina Camén and Björn Lidestam, Research in Transportation Economics Volume 69, September 2018, Pages 157-164

Influence of public bus transport organisation on the introduction of renewable fuel

Malin Aldenius, K2, Lund University Faculty of Engineering. Research in Transportation Economics Volume 69, September 2018, Pages 106-115

How to create functioning collaboration in theory and in practice – practical experiences of collaboration when planning public transport systems

Fredrik Pettersson & Robert Hrelja, International Journal of Sustainable Transportation, published online 11 Oct 2018.

A typology of inter-organisational coordination in public transport: The case of timetable planning in Denmark

Hedegaard Sørensen. Research in Transportation Economics. Available online 6 July 2018

Public–private innovation: barriers in the case of mobility as a service in West Sweden

Smith, G., Sochor, J., Karlsson, M. (2018.) Public-private innovation: barriers in the case of mobility as a service in West Sweden. Public Management Review. 4 maj 2018.

Partnerships between operators and public transport authorities

Hrelja, R., Rye, T. & Mullen, C. (2018). Partnerships between operators and public transport authorities. Working practices in relational contracting and collaborative partnerships. Transportation Research Part A: Policy and Practice, 116, 327–338,

The relationship between formal and informal institutions for governance of public transport

Rye, T., Monios, J., Hrelja, R. & Isaksson, K. (2018). The relationship between formal and informal institutions for governance of public transport. Journal of Transport Geography, 69, 196–206

”A new model for analyzing differentiated fares and frequencies for urban bus services in small cities”

Disa Asplund, Roger Pyddoke. K2 Working Papers 2017:8.

The Qualities Needed for a Successful Collaboration: A Contribution to the Conceptual Understanding of Collaboration for Efficient Public Transport

Hrelja, Pettersson, Westerdahl, Sustainability 2016, 8, 542.

Research projects

Metoder för anbudsutvärdering i svensk upphandling av kollektiv busstrafik

Project manager: 
Ivan Ridderstedt

Nya pengar till kollektivtrafiken – en studie om statliga interventioner i finansieringen av kollektivtrafik i Europa

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Access Sweden

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Din Resa = Min arbetsplats – En studie om gränssnittet mellan personer som reser och arbetar i kollektivtrafiken

Project manager: 
Karin Winter

Punktlighet – är resenärsupplevd och objektivt uppmätt tillförlitlighet samma sak?

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Kollektivtrafiken som medel för att nå samhällsmål – en studie av finansiella/ekonomiska förutsättningar

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Att förstå mobilitetsmönster i tio svenska regioner

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Collaborative partnerships and contracts with effects? Public transport patronage and quality outcomes in collaborative contracts between operators and public transport authorities.

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Covid-19 and changed conditions for the financing of public transport

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Innovation and technological change in public transport markets

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The corona diaries: the role of change agents in (re)shaping institutions and policies in times of turbulence

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