Operating Costs
There are many ways to construct an operating cost model. One approach is to use three primary operating cost categories:
- Operations
- Maintenance
- Management and administration
Some of these costs are fixed regardless of the number of buses in operation and others will vary with the amount of service. The authority will require the bus operator to prepare financial reports that it can use to measure bus system performance.
Vehicle operating costs
- Wages and salaries (by staff category: drivers, conductors, etc.)
- Fuel, lubricants and grease
- Depreciation or fleet replacement provision
- Vehicle insurance
- Licenses and permits
- Bus station and other infrastructure charges
- Other vehicle operating expenses
Vehicle maintenance costs
- Wages and salaries
- Maintenance materials
- Tires and tubes
- Consumables
- Outside maintenance
- Ancillary vehicles
- Other maintenance expenses
Management and administrative costs
- Wages and salaries
- Office supplies
- Telephones and postage
- Ancillary vehicles
- Advertising
- Claims and bad debts
- Agents’ commissions
- Other insurance
- Training
- Interest
- Taxation
- Other management and administrative expenses
Operating costs in route and area contracts
The financial model should contain individual route cost data to help the authority prepare private contract tenders, evaluate contract awards, and monitor private contractor performance.
The authority obtains cost information from the bidders as part of their bid submission and inputs this information into the financial model’s operating cost worksheet. It should also conduct independent cost surveys when possible. In addition, the authority can use the financial model to calculate the financial positionof each route and assess financial indicators, such as the route’s farebox recovery ratio, for each of the private contracts.
See also
Capital costs
Operating costs
Authority costs
