“The War for the Fare” How Driver Compensation Affects Bus System Performance Export

@techreport{Johnson:2005me, abstract = {Two systems of bus driver compensation exist in Santiago, Chile. Most drivers are paid per passenger transported, while a second system compensates other drivers with a fixed wage. Compared with fixed-wage drivers, per-passenger drivers have incentives to engage in ``La Guerra por el Boleto'' (``The War for the Fare''), in which drivers change their driving patterns to compete for passengers. This paper takes advantage of a natural experiment provided by the coexistence of these two compensation schemes on similar routes in the same city. Using data on intervals between bus arrivals, we find that the fixed-wage contract leads to more bunching of buses, and hence longer average passenger wait times. The per-passenger drivers are assisted by a group of independent information intermediaries called ``sapos'' who earn their living by standing at bus stops, recording arrival times, and selling the information to subsequent drivers who drive past. We find that a typical bus passenger in Santiago waits roughly 10\% longer for a bus on a fixed-wage route relative to an incentive-contract route. However, the incentives also lead drivers to drive noticeably more aggressively, causing approximately 67\% more accidents per kilometer driven. Our results have implications for the design of incentives in public transportation systems.}, author = {Johnson, Ryan M. and Reiley, David H. and Munoz, Juan C.}, citeulike-article-id = {1605701}, institution = {NBER}, keywords = {chile, cities, design, incetive}, local-url = {file://localhost/Users/darbyjack/Documents/Papers/Johnson2005.pdf}, number = {11744}, posted-at = {2007-08-29 17:22:19}, priority = {2}, title = {``The War for the Fare'' How Driver Compensation Affects Bus System Performance}, type = {Working Paper}, year = {2005} }

TY - RPRT ID - Johnson:2005me L3 - citeulike-article-id:1605701 N2 - Two systems of bus driver compensation exist in Santiago, Chile. Most drivers are paid per passenger transported, while a second system compensates other drivers with a fixed wage. Compared with fixed-wage drivers, per-passenger drivers have incentives to engage in ``La Guerra por el Boleto'' (``The War for the Fare''), in which drivers change their driving patterns to compete for passengers. This paper takes advantage of a natural experiment provided by the coexistence of these two compensation schemes on similar routes in the same city. Using data on intervals between bus arrivals, we find that the fixed-wage contract leads to more bunching of buses, and hence longer average passenger wait times. The per-passenger drivers are assisted by a group of independent information intermediaries called ``sapos'' who earn their living by standing at bus stops, recording arrival times, and selling the information to subsequent drivers who drive past. We find that a typical bus passenger in Santiago waits roughly 10% longer for a bus on a fixed-wage route relative to an incentive-contract route. However, the incentives also lead drivers to drive noticeably more aggressively, causing approximately 67% more accidents per kilometer driven. Our results have implications for the design of incentives in public transportation systems. IS - 11744 TI - ``The War for the Fare'' How Driver Compensation Affects Bus System Performance KW - chile KW - cities KW - design KW - incetive AU - Johnson, Ryan AU - Reiley, David AU - Munoz, Juan PY - 2005/// ER -