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Intermode : Innovations in Demand Responsive Transport

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  • eric.britton@ecoplan.org
    Or. . . Thinking small in a big way! Dear Sustainability Colleagues, Because I firmly believe that what we need in cities is not more cars (are you listening
    Message 1 of 1 , Aug 12, 2004

      Or. . . Thinking small in a big way!



      Dear Sustainability Colleagues,


      Because I firmly believe that what we need in cities is not more cars (are you listening WBCSD?) but more car-like (in terms of service levels) and more sustainable transportation, I find that anything which probes the rich potential of this largely unmet technology and service challenge, by whatever name, is worth careful attention.


      In this case I have just checked out a just published report on the potential of “Intermode: Innovations in Demand Responsive Transport Systems” in the UK carried out by a team lead (at least in part) by Marcus Enoch of the Transport Studies Group at Loughborough University for the Department for Transport and Greater Manchester Passenger Transport Executive. To get to it the link is http://www.dft.gov.uk/stellent/groups/dft_localtrans/documents/page/dft_localtrans_030324.hcsp (make sure you get the whole mess into your browser).


      I must say that I always approach reports on this most important topic with considerable reserve. I have been looking at these systems for many years and have in the process seen a lot of mediocre (on a good day) stuff purporting to help us better understand the area.  (Sure!) This report by contrast strikes me as good value, and since you may be time pressed, I have purloined a few pages that summarize the top lines, which I sincerely recommend to your attention.


      This is not the last time this subject is going to come up.


      Eric Britton


      PS. In the meantime if you are looking for earlier publications treating this topic, check out http://www.bestwebbuys.com/Medical-Transportation-N_10024807-books.html. A small gold mine.



      Intermode : Innovations in Demand Responsive Transport

      The Intermode Study

      Increasingly, conventional bus services do not meet the needs of a large section of the population. This is due to increasing incomes and car ownership levels and the resulting dispersal of activity centres and trip patterns. One possible solution is public transport systems that can operate effectively with lower and more dispersed patterns of demand than the bus, i.e. Demand Responsive Transport (DRT1). DRT has featured in a number of UK Government reports suggesting it could be used to tackle a number of policy objectives, and recently the use of Rural and Urban Bus Challenge funding has encouraged the take up of DRT. Existing research on DRT has tended to focus on the means of delivery - i.e. what type of vehicle is most appropriate, how might the technology work, and should a service be fully or semi-flexible? However, there are a number of additional regulatory, fiscal, institutional and cultural barriers at government, local authority, operator and user levels that have not yet been comprehensively investigated. These appear to be as important as the technical issues involved.

      In 2002, the Department for Transport (DfT) and the Greater Manchester Passenger Transport Executive (GMPTE) commissioned the Open University (in collaboration with the University of West of England and Loughborough University) to determine the market potential for DRT systems in the UK. The project set out to examine examples of 'good practice' DRT systems already in operation and identify any regulatory or institutional barriers hampering the development of DRT schemes.

      In essence, the purpose of this study was to look at the potential for DRT as an alternative public transport system in terms of market or demand niches, and from the viewpoint of the public authority and the commercial operator. It aims to determine how DRT might be developed to serve journeys that are not currently well served by public transport and explores why DRT has so far failed to make much impact, and how government and other public authorities might rectify this.


      Composite Cases

      To analyse the material, the case studies were aggregated to create a series of composite case studies, each of which was described firstly by the nature of the DRT service it represents and the market it serves and secondly by whether it is driven primarily by public policy or by commercial objectives. There are four function-based composite case types:

      Interchange DRT providing feeder links to conventional public transport. Typically this would be a DRT service providing an interchange at a rail station or into a bus route.

      Network DRT enhances public transport either by providing additional services, or by replacing uneconomic services in a particular place or at certain times. Typically, this substitution happens at times of the day or week when demand for conventional public transport is low or dispersed, so making it hard to offer an attractive service. However there are also places where DRT may be more appropriate, such as town and city cross-suburban trips. Funding from the Government's Rural Bus Challenge has led to the development of a number of such services, many in areas where conventional bus services had previously been withdrawn.

      Destination-specific DRT is a specialist form of network DRT that serves particular destinations such as airports or employment locations. A key element of many of these schemes is the presence of a partnership between a local authority and the 'destination' (e.g. a company, airport operator or whatever).

      Substitute DRT occurs where, instead of complementing conventional bus services, a DRT system totally (or substantially) replaces them. This represents a reinvention of public transport.

      Interchange DRT Composite Case

      Except where trunk and DRT services operate at a high frequency, integrated timetabling with connecting services and ideally guaranteed connections are advisable, and it is desirable to encourage flexibility in service design to ensure connections are achieved in both directions, i.e. DRT to trunk and trunk to DRT. Driver training is of crucial importance. Vehicle interior should be to a high specification, and ideally as close to a taxi environment as possible. This is particularly important for 'choice' users such as commuters.

      There is an issue regarding fares. Most systems operate fares that are the same or comparable to local bus fares, and may even use normal bus tickets. Some, however, have fares that are higher than bus fares, but considerably lower than normal taxis. If modal shift from car is desired fares need to be competitive with perceived motoring costs (including parking costs at stations). Through fares and tickets onto interconnecting service might be more attractive to users.

      In the UK context, where a DRT service is introduced to connect with fixed-route public transport, it could be appropriate to have fares moderately above bus fare rates, but with concessions for key groups and discounts for pre-booked pickups/drop-offs at fixed stops.

      Financially, Interchange DRT tends to occupy a space that spans subsidised and commercial operations. Overseas examples, like many local bus services, require continued subsidy, although it is notable that for the rural services in particular this is less than for conventional buses. In the UK, the subsidy rate of £1.80-4.00 per trip tends to be above the typical maximum of around £2 for tendered services. However, initial funding can lead to a level of subsidy no higher than conventional buses. And this is with a higher quality of service, coverage and patronage.

      Network DRT Composite Case

      Many of the key design elements of the interchange DRT services apply to network services as well.

      For network services, unlike with interchange DRT projects, integrated fares, although desirable, are not an essential requirement. Some schemes do have fares that are integrated with the parallel public transport system and use the same zones, but passengers still pay a premium to use such schemes. If modal shift from car is desired, fares need to be competitive with perceived motoring costs (including parking costs at stations and/or destinations).

      DRT schemes are typically more expensive to provide per passenger trip than conventional bus (although probably cheaper to operate in the particular circumstances than a conventional bus would be). Therefore public policy driven network schemes that provide additional service levels may be vulnerable in the longer term to funding being cut unless it can be convincingly demonstrated that they are delivering their objectives. Conversely, being more flexible, DRT can very usefully perform as a pilot bus service in an area until demand levels on particular routes or at particular stops can be fully ascertained and resources allocated to a fixed route service.

      Destination-specific DRT Composite Case

      The destination-specific composite case is a subset of the network DRT case, and hence many of the conditions that applied for the network composite mode will apply here too. Destination-specific services tend to be targeted at particular markets. Often therefore, either the users are perhaps valued in some way (e.g. where companies are happy to subsidise the commuter trips of their employees), or else the users see such a journey as a one-off and are therefore happy to pay a premium (e.g. airport shuttle passengers). Timetables can be geared specifically to meet the particular needs of the site(s) served, rather than designed to co-ordinate with the rest of the public transport network.

      Destination-specific schemes do not tend to involve trip chains, and therefore the fares systems, tickets and/or timetables can be self-contained

      Destination-specific DRT services have a good potential for commercial partnership funding between an operator, local authority and/or a site owner, tenant or developer. This is because in addition to 'self-interest' reasons for establishing a DRT service (congestion, lack of sufficient parking places, improving access for staff and visitors), there may also be regulatory reasons. For example, where a developer wishes to build a factory or supermarket, planning permission for this will be required from the local council. Often, this process results in a planning agreement whereby the developer agrees to run a scheduled bus to the site for a couple of years. This usually runs virtually empty and is then discontinued. A more positive use of such a planning gain agreement might be to enter into a partnership with the council and bus operator to pump-prime a DRT service.

      Substitute DRT Composite Case

      Social inclusion concerns have played a major part in many DRT schemes. However, there is a danger of too narrow a market base, and it is notable that a number of these DRT schemes have sought to consolidate a number of specialist DRT services, such as those for people with disabilities, into a general DRT service. Indeed, several of these schemes have merged three or four previous services in order to capture resource efficiency gains, cut costs and improve services to customers.

      Most of the above lessons also apply to the more radical substitute DRT services. However, from this analysis one issue to emerge is whether it is better to go for the incremental development of DRT, or if the benefits are only achieved as the result of a radical restructuring. Experience suggests that a total evaluation of an areas bus service is needed, rather than a piecemeal approach.


      Markets for DRT

      Most DRT schemes have been driven by social policy objectives and hence focused upon captive users, who by definition have restricted transport choices, and in particular have low levels of access to cars. By way of contrast a number of DRT schemes have targeted choice users, many of whom could have made the trip by car. This latter group is of particular interest where the role of DRT in transport and environmental policy is concerned.

      One finding to emerge from the analysis of the composite cases is that there are key differences in the user requirements of the 'choice' and 'captive' markets. One factor that is rated highly across all trip types for both captive and choice users is certainty of arrival time. The availability of door-to-door travel, a key attribute of DRT, achieves an interesting mix. For shopping and health trips it is rated strongly for both captive and choice groups, though the rating is higher for choice than captive. Door-to-door travel is also rated higher by choice groups for commuting and leisure trips. It should be noted that door-to-door is a more valuable attribute for women than men, due mainly to the perception of enhanced personal security. These observations are indicative of a more general pattern of difference between choice and captive users. Times of operation appear to be of importance for commuter and leisure trips, with choice commuters scoring higher. This probably relates to leisure trips being in the evenings, possibly after conventional bus services stop. On the important issue of price there is a major contrast between choice and captive users. Price is a very important issue for captive users, but less so for choice users. By way of contrast, comfort and image is far more important for choice than captive users (although comfort understandably scores more highly for health trips and also for leisure trips).

      Recommendation: This analysis can be used and developed to target the design of a DRT service to the markets it is planned to serve. For example, a DRT scheme geared mainly to shopping, health and leisure trips by captive users should combine a different set of attributes than one aimed at car commuters. A key distinction is that what captive users most want is a bus or minicab, whereas the last thing choice users want is a bus. Captive users value bus-like attributes. Choice users value taxi/hirecar type attributes.

      Implementation issues

      DRT systems tend to require a more complex network than conventional bus or taxi services. At the very least this involves operators, call centres and local authorities. It is also clear that good relations need to be established with the local community, rival transport operators (particularly minicab and taxi firms who may see a subsidised service as a threat), and local trip generators such as employers, retail outlets, etc., that could encourage their staff and visitors to use the service, or even potentially sponsor or contribute towards the costs of providing the service. There can be problems involving taxi and private hire operators, as moving into DRT and being expected to work in partnership with the local authority and others is not their normal mode of operation. Finally, clear communication channels with the various licensing, regulatory and financing authorities can smooth the path of implementation enormously.

      Politically, there is widespread political enthusiasm for DRT, but it is the support of the operators, not the politicians, that is the biggest problem. One approach to dealing with this operator reticence has been for local authorities to bear all the revenue risk by issuing gross cost contracts. In practice, this has meant that the local authority buys/leases and brands the vehicles, plans the routes and then invites operators to bid to run the services for a fixed fee which they will receive no matter how many people use the service. Currently DRT is still limited to niche markets and limited areas of the country, and considered experimental. It is almost as though DRT has to reach a 'critical mass' and be more widely accepted before the conservative bus industry accepts it as a viable proposition. Thus far, DRT is seen as providing a less certain revenue stream than conventional public transport.

      Directly related to this and a serious operational problem that has afflicted DRT projects in the UK and elsewhere, is active opposition from rival transport operators. However, the research conducted for this study suggests that the fear of competition from DRT expressed by taxi operators is ungrounded, and DRT is in reality an opportunity. There is considerable, guaranteed profit to be gained. In essence, more needs to be made of the positive incentives for communities to encourage small, local taxi operators to participate in DRT.

      Issues facing Government

      Institutional, legal and regulatory

      While it could be argued that the plethora of existing and potential regulatory regimes allows operators flexibility in the type of schemes they devise, in practice the complexity facing operators has hindered rather than facilitated the development of not only DRT, but other innovative transport options such as car club, lift share or vanpooling schemes.

      Currently DRT is neither 'fish nor fowl' - it is neither taxi, nor minicab nor bus, meaning that it is extremely complicated to set up a DRT scheme and that DRT is not seen as a mainstream public transport solution by all players. Further, registration, licensing and financing principles and procedures continue to be conducted on an ad hoc basis - an undesirable situation for all concerned because DRT scheme promoters are thus forced to negotiate from scratch every time they register a service or try and claim financial support. To be successful DRT needs a strong identity.

      Recommendation: The current institutional arrangements facing DRT scheme promoters are too complicated. Ideally, over the longer term the operating, licensing and financing regimes of all the road-based passenger public transport sectors need to be re-visited and completely replaced with a new integrated system governed by common principles, based on safety and the needs of the passenger, and controlled by a single governing authority. Ad hoc and piecemeal alterations to the various regimes would seem to be counterproductive. On the other hand, it is recognised that such a wholesale change in the current political climate is very unlikely to happen for a variety of reasons and that some specific changes would benefit DRT operations (see Chapter 6). As a minimum, in the short term, the DfT needs to further clarify the institutional framework for ALL potential types of DRT scheme. Also, as DRT has no natural constituency to draw from for political support, unlike the established bus and taxi lobbies, one possible remedy could be to set up a new DRT forum.

      For the cases studied, there was also some comment that more information about how to set up, plan, run and market DRT would be helpful to local authorities and bus operators.

      Recommendation: Government should improve the dissemination of public transport planning, operating and marketing techniques, possibly through the publication of a good practice guide.

      With DRT there are many different variations in the degree of route and timetable flexibility. This is combined with uncertainty in the legislation, which has led to a non-uniformity of how the legislation is applied among the six Traffic Commissioners found in eight regions.

      The second major concern to emerge from the research was to do with the related issue of timing points. Timing points are seen as being problematic because buses are required to run to them even if there are no bookings, and because they limit the flexibility of how the service is operated.

      Monitoring whether services run (or are available to run) or not currently determines the limit of how flexible a service can be. There is therefore a need to look at alternative approaches to the current 'catch all' timing-point method, which, while appropriate to fixed timetable services, is clearly useless for on-demand style service patterns. Instead, the 'mystery shopper' approach might be an alternative way for Traffic Commissioners to monitor actual service compliance, for example with a sample of services being booked by telephone to see if they are then operated as per the published standard.

      Recommendation: New monitoring methods need to be devised by the Traffic Commissioners (or subsequent registration body). This would allow a more comprehensive range of flexible public transport service options to be registered.

      In theory, the deregulation of bus services due to the 1985 Transport Act should have encouraged bus and taxi operators to bid for operations, and stimulate competition. In practice, this has rarely happened. In summary, taxis are being under utilised.

      Recommendation: As a minimum, stronger guidance and/or regulation needs to be issued to taxi and Private Hire Vehicle (PHV) licensing authorities extolling the virtues of shared taxi-type operations. More beneficial would be to standardise private hire and taxi licensing rules while shifting these licensing responsibilities from the district authority tier to that of the highway authority (where the authority is not a unitary one) or to a PTE (where one is present).

      A very specific regulatory barrier relating to the potential for DRT services to substitute for specialist services such as education, social service and disabled transport, was due to Section 60(5) of the 1985 Transport Act, preventing PTEs from 'owning and loaning' vehicles, thus making it far more complex for them to act as a vehicle broker. This brokerage system would theoretically enable a council or a PTE to provide a vehicle pool, from which private and community transport operators, council departments and Primary Health Care Trusts could lease vehicles as required for a few hours a day - perhaps significantly reducing costs.

      Recommendation: The regulations in the 1985 Transport Act preventing PTEs from 'owning and loaning' vehicles should be rescinded2.

      Financial issues

      An important consequence of the institutional arrangement is whether a service is eligible for particular types of funding or not. Public subsidy accounts for 30% of bus operator revenue for services outside London, which comes from Bus Service Operators Grant (BSOG), payments for tendered services, and concessionary fares compensation. For DRT, as with licensing, the situation is rather less clear.

      Essentially, the current position is that private hire vehicles are never eligible for BSOG, while taxis are only eligible when operating as a registered Taxibuses under Section 12 of the 1985 Transport Act. Regulations were introduced from May 2002 to extend the BSOG scheme to a wider range of Community Transport services, i.e. those which are provided by a non-profit making body under a Section 19 permit. Local bus services are only eligible for BSOG providing that services are available to the general public and that members of the public can make single journeys between any two stopping places.

      Recommendation: BSOG should be extended to cover all mileage on services registered with the Traffic Commissioners as 'shared use' public transport services, whether they be operated by bus or taxi. Ideally, it should also be possible for DRT schemes registered with and monitored by local authorities to be eligible for BSOG too3.

      The UK Government recently decided to extend the Rural Bus Subsidy Grant (RBSG) for a further two years (to 2005/6) and to allow it to be used for funding a wider range of services, possibly including DRT, although final decisions are still to be taken on exactly what services will be covered. As of November 2003, the DfT is consulting interested organisations on the details of the changes to the rules of the grant.

      Recommendation: Rural Bus Subsidy Grant should be extended to cover all mileage on services registered with the Traffic Commissioners as 'shared use' public transport services, whether they be operated by bus or taxi, should they comply with the 'rurality' criteria. Similarly, rural local authority registered DRT schemes would also ideally be eligible.

      One major area of DRT funding in the UK has been Rural, and more recently, Urban Bus Challenge funding. RBC and UBC has had a very positive effect on the DRT industry. However, there are problems in that it is overly complex, encourages innovative schemes rather than potentially cost effective schemes, and requires time to be spent on bidding for resources with no guarantee that any money will be forthcoming.

      Recommendation: The Challenge funding mechanisms have served their purpose, and there is now a need for a more predictable source of money to support DRT schemes as they strive to become a financially viable form of public transport. This could be offered through BSOG or RBSG, or perhaps through a 'pump priming' fund (such as the Kickstart initiative), whereby the subsidy gap between DRT and conventional bus routes might be covered for the first two or three years. In any event, a decision as to the long-term future of the Challenge funding scheme (and about any replacement money) would be appreciated as soon as possible.

      While vehicles of ten seats (including the driver) or more qualify to be zero rated for VAT on costs on fares, private hire vehicles and taxis do not. This inconsistency with the VAT treatment of costs and fares does have an impact on the take up of shared taxi schemes. Once again though, the issues of monitoring and enforcement are crucial.

      Recommendation: Ideally, subject to an appropriate monitoring and enforcement regime being established, taxis and PHVs should be eligible for zero-rated VAT on costs and fares whenever they are operated as a public transport system, as opposed to exclusive-use.


      In some ways, DRT already has a strong political backing as it is perceived to help address the 'social inclusion' policy area and it could be developed to meet 'resource efficiency', 'integration', 'environment' and 'congestion' objectives too. However, there are a number of areas where DRT could be embedded further into such policy processes. One way is through accessibility planning. Previously, there has been a tendency to consider access to public transport services in terms of distance from a bus stop and frequency of service. A subtle alteration to these accessibility planning indicators, e.g. by suggesting that people be offered at least an hourly opportunity to travel would mean that DRT would become the most efficient way of meeting the standard in many places.

      Recommendation: Government needs to set a framework from which to set legislation concerning how often the public should have access to transport. An hourly opportunity to travel would be a good standard. A national accessibility standard for rural areas would promote DRT, as it would be the only efficient way of meeting the standard in many places.

      Land use is a significant shaping factor in the effectiveness and efficiency of public transport systems, and in recent years low-density out-of-town developments have been allowed to proliferate. Such developments are car-friendly and bus-unfriendly, and so DRT may be more appropriate than a bus in these areas. However, this should not mean that developers should be allowed to carry on in a similar vein, using DRT as a as a solution for poor planning, and planning rules need to be altered accordingly.

      Recommendation: Planning guidance should recognise that low-density out-of-town developments are not conducive to public transport operation and should be discouraged. However, where such developments already exist, DRT may be a possible solution to poor public transport accessibility.

      A further issue of importance is in the calculation of costs and benefits relating to DRT (and to public transport as a whole). For instance, enabling older people to access social networks through public transport delivers significant benefits, but these are not 'reclaimed' by the transport sector.

      Recommendation: Government ought to sponsor more research into the wider environmental, social and economic benefits of transport in order to help justify higher public transport subsidies.

      Very much related to this is the question of subsidies to other forms of transport. It is important to note that the costs of using public transport relative to the marginal cost to the user of using a car due have risen significantly over recent years, and any future widening of the cost gap between public transport and the car will undermine the viability of DRT.

      Recommendation: Government needs to consider policies aimed at reversing the trends whereby car use is becoming cheaper and public transport use more expensive.

      On a more prosaic level, while DRT is typically more expensive than conventional fixed-route bus services per passenger trip, it is also usually far less expensive than specialist education, social service and health transport services. Allowing DRT to take on these trips may well provide a more cost effective option for a local authority currently subsidising these services separately (providing the fixed costs of providing DRT services are also reduced). However, significant institutional and cultural barriers need to be overcome before any meaningful integration can take place. In particular, it is vital that financing streams are properly established.

      Recommendation: Government ought to examine ways and means of encouraging the establishing of vehicle brokerage operations.

      Other barriers

      The proliferation of call centres is also seen as a problem. While scheme-by-scheme centres may be desirable from an operational viewpoint, (local knowledge of an area is valued by customers), the set-up and operational costs involved are typically high, and many current UK DRT schemes are simply far too small to justify the level of investment required. Regional level call centres therefore probably offer the best balance between cost and operational requirements.

      Recommendation: Government needs to look at ways of developing a more rational network of DRT call centres.

      Other technological barriers are that there is still no mobile telephone coverage in some very remote areas of the country, such as parts of Cornwall and the north west of Scotland (arguably where DRT might be most effective), making high tech DRT schemes very difficult to introduce.

      2 As of November 2003, it is understood that the DfT has already pledged to allow PTEs to lease vehicles and is in the process of drawing up a Regulatory Reform Order to effect this.

      3 Since this recommendation was made, the regulations of February 2004 do enable a whole new raft of DRT services to be registered with the Traffic Commissioners which are thus also eligible for BSOG. Nevertheless, local authority-registered schemes remain ineligible (see http://www.dft.gov.uk/stellent/groups/dft_localtrans/documents/page/dft_localtrans_027309.hcsp for further details.


      Agaion tue full repsort is at http://www.dft.gov.uk/stellent/groups/dft_localtrans/documents/page/dft_localtrans_030324-01.hcsp#P25_536

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