Optimum diversity in the public transport market

Many observers of the transport field believe that the alleviation of road congestion lies in encouraging public transport, using small vehicles operating at high frequency. Several studies have advocated reducing the size of the standard bus. An unexplored option is the operation of small vehicles catering to high-value-of-time travellers alongside large vehicles serving low-value-of-time travellers. This paper investigates the viability of these two types of vehicle serving the same route. It shows that the usefulness of introducing the second type of vehicle depends on two factors: its effect on waiting, and its effect on cruising time. Two specialised carriers will increase the former, but may reduce the latter. The viability of two modes depends, therefore, on the importance of waiting time vs. vehicle time, the dispersion of the value of time, and the size of the market. When frequency and vehicle size are set optimally, congestion has little effect on whether a single mode or multiple modes should be operated, and should not affect the modal split.