Contents lists available at ScienceDirect Research in Transportation Economics journal homepage: www.elsevier.com/locate/retrec Inter-modal competition in an urbanised area: Heavy rail and busways Barbara T.H. Yen a,∗ , Corinne Mulley b , Wen-Chun Tseng c a School of Engineering and Built Environment, Griffith University, Griffith University Gold Coast Campus, Queensland, 4222, Australia b Institute of Transport and Logistics Studies, The University of Sydney, Australia c School of Engineering, University of South Australia, Australia ARTICLEINFO JEL classification: H4 L9 R4 Keywords: Inter-modal competition Public transport Smart card Travel behaviour Mode selection Passenger transport ABSTRACT This paper investigates inter-modal competition in an urbanised area by modelling passengers' travel patterns through revealed preference data - the smart card transaction records extracted from the automated fare col- lection system. In South East Queensland, Australia, public transport is provided by both busways and heavy rail. In some places these two modes run parallel so that they are effectively in competition with each other. The results indicate that busways are more competitive than heavy rail due to their more frequent service and higher accessibility to stations. A simulation analysis investigates policy in terms of inter-modal competition between these two modes. 1. Introduction There is a prevalence of inter-modal studies which have examined the market demand for long-distance travel. For example, studies have analysed the effects of competition between air transport and high- speed rail (Roman, Espino, & Martin, 2007; Yang & Zhang, 2012; Dobruszkes, Dehon, & Givoni, 2014, etc). In evaluations of competition in the public transport market, both intra-modal and inter-modal competition has been addressed in the literature. Glaister (1985) and Glaister (1986) investigated competition after deregulation of urban bus routes in an urban area by examining the relationship between vehicle size and fare level. As an outcome of the British experience in intra-modal competition, Mackie, Preston, and Nash (1995), Ellis and Silva (1998), Van Reeven and Janssen (2006), and Gomes-Lobo (2007) identified that a critical issue in competition is between operators' quality or frequency, rather than price. Clark, Jørgensen, and Mathisen (2011) also examined different competition models (i.e. Collusion, Cournot, Stackelberg, Bertrand and Sequential Price Competition) and found that competitive conditions appear to have less influence on fares. Van Reeven and Janssen (2006) found that destructive competi- tion is unlikely to happen on longer distance services because passen- gers are more appreciative of the quality of their preferred service. Paha, Rompf, and Warnecke (2013) study confirmed this finding, ex- ploring customers' choice behaviour in passenger rail competition in Europe. Previous studies have considered inter-modal competition, although many of these studies were related to competition between high speed rail and airline travel (Adler, Pels, & Nash, 2010; Behrens & Pels, 2012; Bhat, 1997a; CEC, 2006; Dobruszkes, 2011; Dobruszkes et al., 2014; Friedbel & Niffka, 2009; Gonzalez-Savignat, 2004; Janic, 1993; Koppelman & Wen, 2000; Ortuzar & Simonetti, 2008; Park & Ha, 2006; Roman et al., 2007) and not between modes within a given city. Very few studies have investigated inter-modal competition be- tween different modes within a city (e.g. heavy rail and bus) because it is expected that normally cities integrate different modes in order to maximise network effects. In South East Queensland (SEQ), however, its busway networks and a heavy rail system exist side by side, and they are not well integrated. Mostly situated on segregated rights-of-way, with an average stop spacing of about 1.2 kilometres (longer spacing at the periphery and shorter spacing near the city centre) and many ex- press services, the busways offer travel into the central business district (CBD) from the north and south of the city. The SEQ busway network offers passengers faster, more frequent and reliable bus services than the rail network, but some of these busways operate parallel to the heavy rail lines, with relatively low bus-rail integration (e.g. the South East Busway is parallel to the Beenleigh rail line (see Fig. 1) supporting manybusroutesthatcrossthetrainlinebeforerunningonthebusway). To some extent, these two modes are competing with each other for passengers. Busways can provide a wider coverage (more than 100 routes operate in the South East Busway alone) with higher accessibility through greater penetration and high service frequency. In contrast, the https://doi.org/10.1016/j.retrec.2018.04.007 Received 15 September 2017; Received in revised form 13 February 2018; Accepted 29 April 2018 ∗ Corresponding author. E-mail addresses: t.yen@griffith.edu.au (B.T.H. Yen), corinne.mulley@sydney.edu.au (C. Mulley), wenchuntseng@gmail.com (W.-C. Tseng). Research in Transportation Economics 69 (2018) 77–85 Available online 02 November 2018 0739-8859/ © 2018 Elsevier Ltd. All rights reserved. T