Contents lists available at ScienceDirect Research in Transportation Economics journal homepage: www.elsevier.com/locate/retrec Evaluation of cost drivers within public bus transports in Sweden Helene Lidestam a,b,c,* , Carolina Camén d , Björn Lidestam b,e a Department of Management and Engineering, Linköping University, 581 83 Linköping, Sweden b Swedish National Road and Transport Research Institute (VTI), 581 95 Linköping, Sweden c K2 – The Swedish Knowledge Centre for Public Transport, Scheelevägen 2, 223 81 Lund, Sweden d SAMOT Research Group, Service Research Center – CTF, Karlstad University, 651 88 Karlstad, Sweden e Department of Behavioural Science and Learning, Linköping University, 581 83 Linköping, Sweden ARTICLE INFO Keywords: Public transport Bus transports Costs Public procurement Competitive tenderingJEL classification: R41 R49 R19 ABSTRACT The supply of public transport in Sweden has been continuously increasing and as a consequence thereof, the cost for bus traffic has also increased. However, many indicators show that costs for public transports in Sweden in recent years have increased more than supply. Therefore, the aim of the present study is to test and evaluate the importance of the nine previously identified cost drivers (Camén & Lidestam, 2016) of public bus transports in Sweden. A mixed-method design, which included both focus groups and a questionnaire, was used. The questionnaire, with quantitative rating scales, was sent to representatives from the bus operators and from the Public Transport Authorities (PTAs). In the focus groups, industry associations, consultants, and politicians also participated. The results reveal what the dominating cost factors are, as well as the factors considered to be the most important, according to actors within the Swedish bus transport sector. The most important cost driver identified is peak traffic and the costs of its consequences. 1. Introduction Public transport has an important role in today's society because it can generally be regarded as part of a sustainable transport system. The form of public procurement, competitive tendering, of bus transports that is currently used in Sweden started in London in the mid-1980′s. Since then, many other European countries have followed suit and Sweden has been using the system since the late 1980′s. The process of public procurement in Sweden starts with an ad- vertisement in the media in which the current PTA, Public Transport Authority, invites operators to report their interest in attending a first meeting regarding future public procurement within the area served by the PTA. At this meeting, information about which form of transport is covered by the procurement is given, and interested operators are given the opportunity to comment. After that, the PTA contacts the interested operators remaining after the initial meeting and approximately one year after this first contact, a tender document is presented. This document specifies the conditions for the traffic. After the tender documents have been presented via the web, interested operators are given the opportunity to ask the PTA questions. These questions and the answers that follow are available to all operators so that everyone has access to the same information. Approximately one year after the tender documents have been published, tenders must be submitted. Traffic then normally starts one year after the decision of the PTA. Usually, the contract period is from eight to twelve years with different options for extension. The gross cost contract is still most common in Sweden, but there is a growing interest in using different kinds of contracts, including these with incentives. The contracts including patronage incentives used in Sweden have been evaluated for example in Pyddoke and Swärdh (2017). Data from 17 medium-sized Swedish cities from 1997 to 2013 were used in the study and no statistically significant effects with re- gard to either patronage or costs, could be shown (Pyddoke & Swärdh, 2017). The costs of public transport fell dramatically in Europe the first years after the conversion from monopoly to competitive tendering (Cox & Duthion, 2001; Hensher & Wallis, 2005) with the exception of Italy and France (Boitani & Cambini, 2006). After this period the costs for public transports seem to have increased again. Possible reasons, such as reduced competition, increased service quality and wage in- creases have been identified by Alexandersson and Pyddoke (2003) and Hensher and Wallis (2005). Two decades of competitive tendering in Norway are studied in Aarhaug, Fearnley, Gregersen, and Bjørnøy Nordseng (2017). Developments regarding the number of biddings, the contract size and costs have been studied and analysed by Aarhaug et al. (2017) who found that the costs have increased above inflation https://doi.org/10.1016/j.retrec.2018.05.009 Received 13 November 2017; Received in revised form 22 May 2018; Accepted 23 May 2018 * Corresponding author. Department of Management and Engineering, Linköping University, 581 83 Linköping, Sweden. E-mail addresses: helene.lidestam@vti.se (H. Lidestam), carolina.camen@kau.se (C. Camén), bjorn.lidestam@vti.se (B. Lidestam). Research in Transportation Economics xxx (xxxx) xxx–xxx 0739-8859/ © 2018 Elsevier Ltd. All rights reserved. Please cite this article as: Lidestam, H., Research in Transportation Economics (2018), https://doi.org/10.1016/j.retrec.2018.05.009