|
Delegated ManagementDelegated management is when a policy board delegates the management and operation of an entire transit organization to a private provider. Imagine converting a publicly operated transit system to the control of a private operator, who is held contractually accountable to manage operations, grow ridership, take financial risk for performance, bring innovative ideas from systems around the world, advise policy makers on best practices in the industry, and assume the responsibilities of finding and developing talent. Under the delegated management model, there is a clear delineation of responsibilities between the policy arm of a transit organization and the service delivery arm. Public Boards remain in control of setting policies and standards as they direct the long and short range objectives of the service. Veolia Transportation, drawing upon its experience and talents, can provide all operating aspects of the system including the planning, delivering and reporting of operations. Because we are in control of all the “moving parts” of not only operations but also marketing, planning, scheduling, finance, and grants management, we assume greater financial risk, along with greater control to utilize innovative methods to achieve a Board’s policy objectives. Why delegated management? The program brings the efficiency of the private sector to achieve the mobility goals of the community more quickly and at less cost. Under the delegated management model, Veolia Transportation is responsible for outcomes and has the authority to utilize best methods to achieve those outcomes. Because this is a risk and reward model, we are typically at financial risk for service failures and achieve incentives when goals are met. The structure of the relationship aligns the goals of the private operator with that of the public authority, creating a true partnership. A good example of how the model achieves system objectives can be found in Europe, where over 90 percent of systems utilize the delegated management model. Under many of our contracts Veolia Transportation is at risk for fare revenue. If ridership increases, we share in the financial reward; if it decreases, we feel the loss. As a result, we make a tremendous investment to grow ridership by introducing innovative marketing programs, instituting creative and effective service designs, investing in customer-friendly fare collection systems, and carefully projecting the financial impact of fare policies. When we achieve success it means the community is better served, the product is more attractive, and more residents use the system. Everyone wins. Delegated management creates an alignment of public and private goals using a risk and reward model by providing the private operator the latitude to apply innovative and proven methods to achieve public policy objectives. |
