Public Transport Competitive Tendering Profile
San Diego Savings Exceed
Light Rail Construction Costs
January 30, 1997

San Diego has converted 37 percent of its bus system to competitive tendering (competitive contracting) since 1979.(1) San Diego is continuing its conversion at a rate that guarantees the jobs of present public transit agency employees (there have been no layoffs). More than 100 buses are now competitively contracted. Policy is separated from operations.

Competitively tendered costs per vehicle mile are 50 percent below 1979 costs and 34 percent below the non-competitive costs of the public operator.

In the competitive environment, system-wide bus costs per vehicle hour have dropped 30 percent (inflation adjusted). From 1979 to 1996, bus costs were $475 million less than if costs had risen at industry rates.(2) This is nearly $100 million more than San Diego spent to build its first two light rail lines (inflation adjusted).

System-wide bus costs have risen three percent, which has made it possible to increase service levels by 47 percent since 1979.

"Ripple effect" savings have reduced the costs of non-competitive (former public monopoly) service by 25 percent per vehicle hour (inflation adjusted).

The former public monopoly has won competitive contracts.


1. Information calculated from data in San Diego Metropolitan Transit Development Board Short Range Transit Plans (multiple annual editions).

2. Based upon the national annual rate of increase in cost per vehicle mile from 1979 to 1994. Before conversion to competitive tendering began, transit costs in San Diego were rising at above industry rates.

For Additional Information Contact::
Wendell Cox

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