Impacts of Regulatory Schemes on Innovation: The Case of Urban Public Bus Transport in Santiago

Author: Tamblay, S., Galilea, P., and Batarce, M. (2013)

Journal: 16th Congreso Chileno de Ingeniería de Transporte

Keywords: public transport, innovation, bus, regulation, Transantiago

Innovation is starting to play an important role in the provision of urban public bus transport. This paper analyses the implications of different contractual interactions, on both technological (i.e., vehicles and infrastructure) and service operation innovation, in private and public procurement of urban bus services in Santiago, Chile. Our findings indicate that the contractual framework firmly determines the degree of innovation present in the industry. In particular, limited regulation incentivises strong service operation innovation, while showing negative vehicle innovation. On the other hand, gross cost and fixed payment contracts lead to negative service operation innovation by operators, motivated mainly by cost reduction efforts.