Lowest Bid Wins: Effects of Increasing Competition on Public Transport Staff
T Hagen, Institute of Transport Economics, NO
Norwegian public transport has changed radically the last fifteen years. Competition in the marked has increased, and subsidies have declined. Tendering regimes have been introduced.
There is evidence of negative effects of tendering for public transport staff.
* When a contract is lost, employees are subjected to sudden unemployment - a major stress factor for employees. Many seek work in other trades. Transport companies thus experience recruitment problems.
* Unemployed workers are often engaged by the winning operator. However, benefits from the loosing operator do not follow the employee to his new employer. Employees lose pension and seniority benefits.
Investigations in two Norwegian counties indicate that the tendering of bus services has caused short term cost reductions, but public transport employees are the losers when the lowest bid wins. New contractual forms and tendering procedures are being considered.
Association for European Transport