VBP = Verifierade Betalande Påstigande = Verified paying passengers

The Swedish public transport market is characterized by competitive tendering in the form of grosscost contracts with or without quality incentives. Few contain ridership incentives. Strategic planning of supply and regulatory frameworks on fare levels and fare structures are politically decided, and ticket incomes are kept by the authorities. Around 50% of the operating costs are covered by ticket income. One exception is the County Council of Greater Stockholm, and some of their new larger bus and tram contracts are based on up to 100% remuneration per transported and verified paying passenger. It is too early to draw solid conclusions based on a rigorous evaluation of how these new contracting approaches work in practice, but this paper highlights the basic structure of the contracts and problems encountered during the start-up phase and suggests some guidance for further implementation. The overall assessment of 100% contract remuneration per verified paying passenger as a way of improving services and enhancing cost-efficiency appears to be sound. It is recommended that transport authorities should strive for a homogeneous transport area in market terms, should set standard requirements for quality in combination with penalties, and should choose this contract model only where there is a certain level of stability of demand.