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make the transition
Making the Transition to an Area- or Route-Contract System /
Forming Operators’ Associations
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make the transition
Changes in industry structure
Forming operators’ associations
Privatization arrangements
Creating a level playing  field
Negotiating a purchase price
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Forming Operators’ Associations
There is a minimum size for an operating unit to be eligible to bid for a route or area contract. In the case of a route, it is likely to be at least 20 vehicles. For an area it may be 200 or more.

When the industry is based on small operators with only one or two vehicles each, none of these will be eligible to bid for a contract. Unless entirely new operators are established, it will be impossible to introduce a route or area contract arrangement.

Even if such operators are formed, there will be a large number of small operators who will be excluded from the market, and this may have undesirable consequences.

Creating larger operating units
The problem may be overcome through the creation of larger operating units in the form of operators’ cooperatives — sometimes also referred to as associations or unions. They already exist in many cities.

Most transport cooperatives or associations are formed by a number of vehicle owners. They pool their resources by putting their vehicles into a common fleet, under the control of officers appointed by the cooperative members. The members usually retain ownership of their vehicles, and may continue to employ the crews.

A more formal structure and constitution may be required if the associations are to be eligible to bid for contracts.

In addition, the officers of the associations are likely to require training in basic management techniques, as well as in the fundamentals of bus operating practices and procedures.

Other key issues to consider
Changes in industry structure
Increasing the number of operators
Consolidating small operators
Privatization arrangements
Creating a level playing field



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