A. Direct Savings
Competitively contracted public-transit services have achieved average direct cost savings of more than 30 percent. For example, the first competitively contracted services mandated by state law have resulted in cost savings of more than 31 percent for Denver, in Snohomish County, Washington, a suburb of Seattle, contracted express service saves more than 30 percent; St. Louis saved more than 50 percent on competitively contracted routes; and in Los Angeles, two large contracts resulted in average cost savings of 60 percent.
B. Ripple Savings
A competitive environment also improves public cost performance for services that are not yet contracted. This is referred to as the "ripple" effect. Lower public cost increases have occurred in transit agencies such as San Diego, Norfolk, and London upon introduction of competition. In San Diego before competitive contracting, transit costs increased at a rate similar to that of other transit agencies. From 1979 to 1990 (after conversion to a competitive contracting program), San Diego costs per mile increased at a rate half that of the transit industry, generally.
C. Service Quality
Public administrators of competitively contracted transit services have rated the quality and performance of contracted services as equal to or better than in-house public service provision. Where there have been third-party evaluations of service quality, auditors have found that the safety, reliability, and quality of contracted service is equal or superior to in-house agency provision.