Transit agencies may contract for a portion or all of their operations needs. Smaller, newer transit agencies without historical relationships with unionized labor are more likely to contract all of their service. Larger, older agencies with standing relationships and long histories with unionized labor typically contract only a portion of their labor, if any at all. Reducing the number of union contracts would be politically difficult. <ref name="Iseki et al. 2006">
Iseki, Hiroyuki, Amy Ford and Rachel J. Factor (2006), “Contracting Practice in Fixed-Route Transit Service: Case Studies in California”, Transportation Research Record, 1927: 82-91.</ref>

==Views on contracted labor==
Three general perceptions about how contracted labor reduces operating costs dominate contemporary views. First, contracting labor capitalizes on any difference in the cost of non-union labor in the private sector. Typically, non-union labor is believed to be less costly than unionized labor. Second, contracting with the private sector introduces competition into the labor market, creating an incentive for labor unions to reduce wages in their contracts with the public sector. Third, transit agencies contract out inefficient service in order to maintain efficient operations under their direct control. <ref name="Taylor et al. 2008">
Taylor, Brian, Karen Frick and Martin Wachs (2008), "Contracting for Public Transit Services in the US", Privatisation and Regulation of Urban Transit Systems, Transport Research Centre Round Table 141: 47-62.</ref>
This may include utilizing more flexible non-union labor such as in split shifts. Split shifts are shifts in which a worker logs two four-hour shifts in the same day rather than a continuous shift of eight hours or more. This model fits well with peak hour travel in which operators are needed in the morning and afternoon but not necessarily in the middle of the day. Split shifts avoid overtime pay.

Contracted service is also seen as flexible over the long-term. Transit agencies view contracted labor as easier to initiate and terminate than directly hired labor. Rather than directly hiring workers for experimental routes, transit agencies may benefit from reduced political risk by contracting for service until the service is deemed to be permanent. Along these same lines, contracted labor is viewed as faster to initiate service than directly contracted labor. For new service routes, transit agencies may hire contracted operators in order to expedite start of service. <ref name="Iseki et al. 2006" />

==Efficiency achieved through contracting==
Despite these commonly held views, contracted service yields only moderate cost savings. In a study of 400 transit agencies spanning a 10 year period from 1992 to 2002, partially contracted service yielded a 7.8% cost savings while contracting all service yielded only a 5.5% savings.<ref name="Iseki 2004">Iseki, Hiroyuki (2004), “Does Contracting Matter? The Determinants of Contracting and Contracting’s Effects on Cost Efficiency in US Fixed-Route Bus Transit Service”, University of California, Los Angeles, unpublished dissertation.</ref> Research has also shown a strong self selection bias to be present among transit agencies. If an agency can achieve cost savings through contracting either a part or all of its service, it will do so. Other agencies efficiently delivering their own directly provided service are much less likely to contract service. Thus, transit agencies cannot necessarily look to other agencies for guidance on the choice of contracting.

==Effect on labor==

==Additional effects from contracting==
Contracting labor has been associated with a decline in service quality. Contracted transit service has been found to have up to 70% more collisions and 34% more mechanical breakdowns than through comparable publicly provided service. <ref>Nicosia, Nancy (2002), “Essays on Competitive Contracting: An Application to the Mass Transit Industry”, University of California, Berkeley, unpublished dissertation.</ref>

==References==
<references />

Contracting transit operations

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Jcampbell:

Contracting transit operations

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2012-03-01T23:20:16Z

Jcampbell:

[[Category:Transit system management]]

Labor productivity in transportation service has declined in recent decades (citation). Unions have grown in membership and influence and have often won workers such contract elements as the eight-hour work day. As an example, the eight-hour work day brings workers stable income and often benefits associated with full-time employment. Transit operation, however, does not lend its self well to eight-hour work shifts. Because transit demand peaks in the morning and afternoon commute times, more workers are needed during these periods than in the middle of the workday. Without part time or flexible shift workers, transit agencies are forced to staff full-time vehicle operators to their highest peak demand, loosing many hours of productivity when these same workers are idle midday.
--Strategies for increasing labor productivity--

Several strategies exist for increasing labor productivity. Two of the most common strategies are contracting for transit operation service and altering current labor regulations.

---When to use contracted labor---

Though contracting service often leads to losses to labor, contracting service can be beneficial to transit agencies in some cases. When significantly different labor laws exist for directly hired versus contract workers, transit agencies may benefit by contracting with more workers in order to achieve more schedule flexibility. Additionally, when transit agencies are expanding service or undergoing other temporary or experimental service increases, contract labor offers a good alternative to directly hired workers.

---When to lobby for altering labor laws---

Human resources

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Jcampbell:

Other models

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Jcampbell: moved Other models to Contracting service

#REDIRECT [[Contracting service]]

Cost effective vehicle purchases

2012-02-17T00:42:12Z