Selection of Work to be Tendered
Under an area contract, it’s necessary to decide on the demarcation of areas, and whether different contracts are to be awarded for different types of service in the same area.

Demarcating areas
One of the transport authority’s objectives is to make each operator responsible for network planning in his area. This means it’s desirable to make the areas sufficiently large and self contained so that the operators have reasonable areas to work with.

In a small city perhaps the smallest package would be three operators with about 150 buses each. In a large city it’s unlikely that more than 10 areas can be identified, and in fact there would be benefits in permitting some operators to contract for two or three areas.

The most satisfactory geographical shape for each bus contract area, to meet the requirements of commuters in most cities, is likely to be a wedge shape with the central business district at its apex.

However, except where all routes are strictly radial, and converge at a terminal or terminals in the central area, it’s not usually possible to divide an urban area between operators into absolutely distinct areas, because this inhibits cross-city travel.

There must usually be a central common zone served by all operators. This is not necessarily a disadvantage. There will be a certain amount of competition between operators for traffic that is wholly within the common zone. This will give passengers a chance to compare the service standards of different operators.

The area boundaries must take into account the possible need for the linking of routes to provide cross-city connections and other links between major centers. It’s likely there will be a degree of overlap dictated by travel requirements.

Different contracts for different types of service
In many cities, particularly the larger ones, there are two or more standards of service, with different fare scales reflecting the difference in quality of service. Typically, there will be a regular or standard service, and a premium service, using air-conditioned buses in hot climates, and more comfortable seating.

A decision has to be made as to whether or not there should be separate franchises for different types of service, within the same area.

The different service standards cater for different markets and require different types of vehicles. Different operators may wish to specialize in one type of service or another. This may be an advantage, particularly in a very large city, and where there are many capable operators.

On the other hand, a single operator may be required to provide two or more types of services. There are various ways to do this. Different standards of service may be treated as different routes although allocated to one operator. Alternatively, the contract may specify that different types of buses are provided, in specified proportions.

The cost and complexity of administering the system will increase with the number of separate franchises — ease of administration and enforcement must be considered.