Switzerland's Public Passenger Transportation: Innovation in the Corset of the Concession System.

The Swiss public service is known for its high quality and substantial subsidies. In 2015, public passenger transportation (PT) consumed nearly CHF 8 billion of taxpayers' money ¹ [1]. While stringent public concessions ensure guaranteed supply and fiscal discipline, they can also lead to lower levels of innovation. However, the future of PT (especially road-based transportation), with its many new competitors and their innovative business models, depends on broad and aggressive innovation (in order to be able to grow its market share). But what role should the Swiss State, which subsidizes roughly half of PT, play in the upcoming transformation of its PT?² This paper argues that the State should focus on transparency and competition among private operators that are winning concessions based on quality, cost, and innovation. There should also be a government-imposed free revealing of better solutions among participating operators of concession services. [ABSTRACT FROM AUTHOR]