Total factor productivity (TFP) techniques were used to develop measures of productivity performance for public transit systems of varying size and location. This baseline is used to examine the potential contribution of alternative advanced vehicle location (AVL) applications. TFP aggregates outputs on the basis of their revenue contribution and inputs on the basis of their relative importance to total costs to calculate the overall transit firm productivity as a function of these quantities. This approach provides a measure of efficiency contribution and identifies the instruments that can be used to achieve these gains. The results from the study are insightful. AVL was found to be an important factor in both system performance and cost savings. The introduction of AVL had a positive and significant impact on transit firm productivity. Improvements in productivity and better service information can be obtained through use of AVL. In the bus fleet regression, AVL has a negative coefficient, indicating that the use of AVL by a transit firm will result in fewer buses used given the number of vehicle miles and number of passenger trips. Similarly, cost per vehicle mile was found to be lower when the transit firm used AVL. In addition to these cost savings, research indicates that given fleet size and usage AVL will reduce the annual maintenance hours for a firm.