Urban Transport Integration

I have often wondered about the poor state of integration of urban transport services in India. In this blog, I am considering various ways in which integration can be achieved in India.

Definition of integration
While reading through various articles on this topic, I came across a set of documents which consider integration is a process or while another set of documents which consider integration a state of a system. Prior is the dynamic perspective in which integration is a process while latter is a static perspective where integration is a state of transport system at equilibrium.

According to dynamic perspective, there is an optimal process of integration that will eventually lead to an optimal state (which itself keeps changing). The challenge is to find the optimal process i.e. optimal institutional structure and regulatory mechanism to achieve integration. According to static perspective, there is an optimum level of integration and the system has to achieve this state by any process. Thus, the relevant question is to find the optimal state i.e. mix of transport modes and level of integration.

To me, both of these questions (what is the optimal process of integration and what is the optimal level and mix of integration) are important and both these questions should be answered together and not separately.

Some transport planners consider integration to be applicable only to the public transport modes and interactions within the public transport. But, most of the transport planners believe that integration should encompass whole transport mobility chain i.e. it should consider public as well as private transport modes including non motorized transport modes. In recent years, planners have adopted even wider concept for integration, where integration also includes convergence of transport planning and urban and land use planning.

Here, I am defining integration as a dynamic process which leads towards an optimal state of transport considering whole transport chain. It also include the convergence of urban planning and transport planning as a part of integration process in order to achieve a sustainable transport system. I am only focusing here on integration of public transport and the instruments which could be used to integrate services. Various kinds of integration in urban public transport include complementary routes, schedule integration (frequency matching), fare integration, physical integration of transfer points, information sharing, common marketing, resource sharing and technology sharing.

To me, there are three main ways of making these integration happen: market driven (informal arrangement-driven by the economic incentives of all the players involved), coordination driven (formal arrangement among service providers-mainly driven by the one group of players and the benefit is shared with all), and government driven.

1. Market driven
Simplest possible instrument is a market driven phenomenon. The level of integration keeps increasing as the system evolves over a period in a given urban area. Such integrations are driven from supplier side due to their commercial interests as illustrated in the table below

	Before Integration			After Integration
	Player 1	Player 2	Total	Player 1	Player 2	Total
Revenue	1100	600	1700	1254	654	1908
Cost	1000	500	1500	1100	525	1625
Profit	100	100	200	154	129	283
% Profit	10%	20%	13%	14%	25%	1

Source: Idea adopted from NEA et al., (2003)

The table above shows (a hypothetical case) how integration can be beneficial for both parties under certain assumption of cost and revenue increase. The over all profit also increases for the system. In such cases, there may not be any explicit understanding between the service providers initially but services evolve in a complementary manner due to their economic interest in a game theory framework.

2. Coordination Driven
The integration may be driven by one or more service providers as their benefits are much higher from others. As Table below illustrates, under certain assumptions of cost and revenue pre and post integration, one player may be able to get higher benefit and may even be ready to share with another player, who is either in a worse or status-co situation. In the given case, Player 1 may take the lead to share a part of the profit with the other players post integration. This integration is possible by forming a coordinating committee, where player 1 takes the lead.

	Before Integration			After Integration
	Player 1	Player 2	Total	Player 1	Player 2	Total
Revenue	1100	600	1700	1254	654	1908
Cost	1000	500	1500	1100	545	1645
Profit	100	100	200	154	109	263
% Profit	10%	20%	13%	14%	20%	16%

Source: Idea adopted from NEA et al., 2003

The committee may be constituted with high level authorities from various service providing firms, who wish to integrate their services. The formation of committee creates avenues for formal discussion between various service providers to arrive at service parameters and formula for sharing revenue. This allows each of the service providers to have their individual freedom to a large extent.

3. Government Driven

There can be cases where no player has enough incentive for integration. The marginal advantage from integration is just enough to compensate the loss of other players. Table below depicts a case, where the benefit to player 1 is just enough to share with player 2. In this case none of the players have any apparent incentive to initiate the process of integration given the initial hassles that may come across.

	Before Integration			After Integration
	Player 1	Player 2	Total	Player 1	Player 2	Total
Revenue	1100	550	1650	1221	594	1815
Cost	1000	500	1500	1100	550	1650
Profit	100	50	150	121	44	165
% Profit	10%	10%	10%	11%	8%	10%

Source: Adopted from NEA et al., 2003

Table below shows a more realistic picture for public transport firms i.e. most of them are having operational losses. In this case, players have little soft budget constraints and hence little incentive to perform better.

	Before Integration			After Integration
	Player 1	Player 2	Total	Player 1	Player 2	Total
Revenue	500	300	800	575	324	899
Cost	1000	500	1500	1080	525	1605
Profit	-500	-200	-700	-505	-201	-706
% Profit	-50%	-40%	-47%	-47%	-38%	-44%

Source: Adopted from NEA et al., 2003

This type of integration instrument must be driven by the government. Regulatory board or authority may be an instrument to arrive at an integrated service through government intervention. Regulatory board/authority would be binding on all the service providers as a result of which this entity may also curb some of the freedoms of the individual players.

In this case, a planned transport development can be carried out. Also, this allows implementing competitive transport services and attracting private sector funding. Even urban and land use planning, and development can be linked with transport development for a sustainable transport within the scope of this instrument.


Concluding Remarks
The realities of the state of transport in India is depicted through the last table discussed under government initiative. Hence, to me, integration can only be achieved through government initiative. However, creating a rule or an organization may not be enough as discussed in the earlier blog on 'National policy on urban street vendors and its effect'. The organization/rules need to be supported by modification in the existing rules and rights of organizations.