A Study of a Community Franchise Business Model of Public Transport Service Delivery

A Study of a Community Franchise Business Model of Public Transport Service Delivery A Dissertation Submitted to Fulfil Requirements for the Degree of Doctor of Philosophy The Institute of Transport and Logistic Studies The Business School University of Sydney Sydney, Australia Candidate: David Emerson MPhil (UNSW) BArch (SydU) FAIA Student Number: 196505953 Supervisors: Professor Corinne Mulley Professor Michiel Bliemer July 2020 ii Originality Statement “This is to certify that, to the best of my knowledge, the content of this thesis is my own work. This thesis has not been submitted for any degree at Sydney University or any other educational institution or other purposes. I certify that the intellectual content of this thesis is the product of my own work and that all the assistance received in preparing this thesis and sources have been acknowledged, except to the extent that assistance from others in the project’s design and conception or in style and linguistic expression is acknowledged. Signed……………………………………………………………. Date………………………………………………………………… iii iv Abstract An unusual and unreported business model of public transport, known locally as a Community Franchise, was identified operating in a large Italian ski field. It is investigated by case study and compared to other more conventional ways of providing ski lifting services. The similarities between ski lifting and public transport are used to construct a hypothetical application of the regime to an urban setting. The study establishes the ways that the regime functions and how it differs from more conventional models of urban public transport in ownership, funding, and incentives. There is no explanation in the literature for the way that this regime undertakes network planning or the effects of franchisees owning and operating the individual lines of transport. A definition of design, broader than the dictionary definition, is suggested to bridge between the normal and the observed resource allocation processes. A computer game is used to experimentally investigate aspects of the ways a centrally directed network functions compared to one where individual lines of the network are owned by competing, profit-orientated franchisees. This experiment establishes that there is no significant difference to a measure of social welfare between the centrally planned version and one where competing franchisee providers maximize their profit. The principal study objective of evaluating the possible application of the regime to urban public transport is approached by canvassing a group of experts who provided anonymous responses to questions about its hypothetical application to the city of Sydney. There is little consensus in the expert view of the urban application of this regime, but an overall indication of its possible application to this role. v vi Author Attribution Statement I am a supervisor of the candidate, David Neale Emerson, of the thesis entitled: “A Study of a Community Franchise Business Model of Public Transport Service Delivery”. This dissertation is being submitted to fulfil requirements for the degree of Doctor of Philosophy, through the Institute of Transport and Logistic Studies at the University of Sydney. Some material in the Literature Review is supported by citation of (Emerson et al., 2016) EMERSON, D., MULLEY, C. & BLIEMER, M. C. J. 2016. A theoretical analysis of business models for urban public transport systems, with comparative reference to a Community Franchise involving Individual Line Ownership. Research in Transportation Economics, 59, 368-378. I attest that this is a true statement of the authorship of this paper. Signed Professor C Mulley vii ABBREVIATIONS AND ACRONYMS ARCC Alpine Resorts Co-ordinating Council, Victoria Australia ARMB Alpine Resort Management Boards, Victoria Australia BusNSW The peak industry organisation for the bus and coach sector, NSW Australia CS Consumer Surplus MNL Multinomial Logit Model PS Producer Surplus ROC Regional Organisation of Councils, NSW Australia ROI Return on Investment TfNSW Transport for NSW: The lead agency of the NSW Transport cluster, Australia Thredbo Thredbo Conference Series on Ownership and Competition in Land Passenger Transport viii ACKNOWLEDGEMENTS I acknowledge the opportunity presented to me by the Institute of Transport and Logistic Studies in accepting me as a doctoral candidate. In hosting this somewhat unusual study, it has provided a supportive and stimulating environment that has greatly assisted in the development of the ideas in this thesis. I am deeply indebted to my supervisors, Professors Corinne Mulley and Michiel Bliemer; for their guidance throughout my study period. Professor Mulley was most supportive and suitably strict in her review of my techniques and theoretical understandings. She was the midwife of this study and provided constant and valued reality checks. Professor Bliemer showed extraordinary patience and provided invaluable input with his authorship of parts of the economic experiment. He provided wise counsel in many aspects of game functioning, experimental procedure, and interpretation of the results. Thanks, are especially due to those academics, transport practitioners, and friends who acted as a sounding board when I was establishing the problem and exploring the nature of the study. This includes Prof Stephen Glaister, Prof John Preston, Prof Andrew Terry, Prof Winjand Veeneman, Didier Van de Velde, Prof Peter White, Charles Curnock, Sir Peter Hendy and Mr Peter Bruliseuer. Special thanks are due to Dott Gerhard Vanzi of Dolomiti SuperSki who provided the essential information and understandings of the franchisor company that he was intimately associated with for decades. Also, to Mr Mario Longhitano who arranged access to key figures in Italy. As well, the other ski field management personnel, Dr Peter Tschiderer, Messes Paul Anderson and Ian Swan, who were instrumental in providing for me the perspective of the functioning of the other ski field organisations with which the Italian regime was compared. The anonymous examiners also gave crucial and helpful advice, with pivotal suggestions which led to conducting the expert survey. I also acknowledge and thank my colleagues, friends and associates of all sorts, who assisted in the conduct of and participated in the computer experiment. This was an undertaking of some complexity and time but well worth the effort as the results were of substantial importance in the understanding of the Community Franchise phenomena. Special thanks are due here to my thorough, dedicated and long-suffering wife, Margaret, who not only conceded the personal space to undertake this doctoral study in the first place but was critical in the organisation of the ‘back office’ of the game conducted over many months. Special thanks are also due to her as well as to Messes Don Steele and Ron Ringer for their roles in the proof-reading and writing style, to Drs Phillip Emerson and Nick Stevens for their guidance on the statistical aspects of the game, to Graeme Jessup who provided feedback to early versions of the expert survey and Dr Ronald Gaudreau for critical feedback on the expert survey as well as for technical and writing aspects of the final draft of this thesis. ix x CONTENTS CHAPTER 1 Introduction ............................................................................................. 1 1.1 Study Background ............................................................................................. 1 1.2 Study Motivation ............................................................................................... 1 1.3 Academic Oversight .......................................................................................... 2 1.4 Study Organisation ............................................................................................ 3 CHAPTER 2 Ski Field Case Study .............................................................................. 5 2.1 Chapter Content ................................................................................................ 5 2.2 Case Study Methodology .................................................................................. 5 2.3 Existing Academic Coverage of the Ski Industry Business ................................ 6 2.3.1 Community and “‘Integrated” Resorts ......................................................... 7 2.3.2 Competition within the two different Ski Regimes ....................................... 8 2.3.3 Social Dimensions of “Community” Organisations ...................................... 8 2.3.4 Asset Allocation in the two Regime types ................................................... 9 2.3.5 Summary of Ski Field Business Regimes ................................................... 9 2.4 Choice of Comparative Ski Fields ................................................................... 10 2.5 Interviews ........................................................................................................ 11 2.5.1 Dolomiti SuperSki Italy ............................................................................. 12 2.5.2 Serfaus Region Austria ............................................................................ 14 2.5.3 NZSki New Zealand ................................................................................. 15 2.5.4 Victorian Ski Fields, Australia ................................................................... 17 2.6 Analysis of the four Case Studies ...................................................................

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