Cost effect of reorganising – A study of special transport services

Abstract It is a policy objective in Sweden that all citizens should have access to the transport system. The public sector is required to provide special transport services (STS) for those who are unable to use regular public transport or private car. Between 1999 and 2014, the yearly cost per STS trip increased by 66%. This is problematic, considering the fact that the population is growing older and an increased demand for STS may be expected in the future. It is therefore important to understand the cost structure of STS operations. Although STS has been organised in various ways in Sweden, the trend is to transfer responsibility from the municipal level to the regional level. This paper examines the cost structure of STS in Sweden to determine whether the transfer of responsibility has had an impact on costs. It is concluded that transferring the procurement of STS from the local to the regional level decreases marginal cost but increases fixed cost, thus lowering costs for municipalities with high levels of production and increasing costs for municipalities with low production levels. Transferring the administration of STS permits is found to have the opposite effect: it lowers fixed costs but increases marginal costs.