Management of revenue sharing

Where an urban passenger transport system features multiple operators, and travel validations permit interchange between them, then there is a need for some form of revenue sharing for fares collected by one operator with travel then made on another.

In systems characterized by high levels of regular commuting and single interchanges, operators may ‘net off’ their liabilities to each other on the basis that morning and evening trips are a mirror pattern, and hence each benefits at one time in the day. In all other cases some evidence of travel made will need to be provided, and a central clearing house can administer the process.

Clearly, though, this procedure can be obviated through gross-cost contracting whereby the operator’s reward depends on the service offer provided, and not on the passengers actually carried. In effect, the revenue sharing is managed internally by the contracting authority.