Appendix D. Transit agency cost rates
The unit operating cost per bus-hour, 𝜋 , is primarily determined by the amortized vehicle price,
𝑚
maintenance costs, and staff wages. The vehicle purchase and maintenance costs can be assumed to be
an affine function of bus capacity (Oldfield and Bly, 1985), while the staff wages are proportional to the
value of time. In other words, we can express 𝜋 as:
𝑚
𝜋 = 𝑎 +𝑏 𝐾+𝑐 𝜃 (D1)
𝑚 𝑚 𝑚 𝑚
where 𝑎 , 𝑏 , and 𝑐 are the cost coefficients.
𝑚 𝑚 𝑚
The unit operating cost per bus-km traveled, 𝜋 , is mainly determined by the fuel costs, which are
𝑣
related to 𝐾 but not to 𝜃. Thus, we can assume an affine relationship between 𝜋 and 𝐾 as follows:
𝑣
𝜋 = 𝑎 +𝑏 𝐾 (D2)
𝑣 𝑣 𝑣
where 𝑎 and 𝑏 are the cost coefficients.
𝑣 𝑣
To calibrate the cost coefficients, we utilized data from two popular bus models: the Volvo 8900
for a full-sized bus and the Ford Transit for a medium-sized one. Table D1 displays the capacities,
purchase costs, fuel consumption rates, and service lives of these vehicle models.
We assume two employees are assigned to each bus during operation hours, including one driver
and one manpower for maintenance, management, administration, and support services combined.
Therefore, we set 𝑐 = 2. To amortize the bus purchase costs, we assume that each bus operates for 16
𝑚
hours a day. Additionally, we inflate the bus purchase cost by 50% to account for other cost items
associated with the bus fleet, such as maintenance, insurance, and facility rent. Based on these
assumptions, we determine that 𝑎 = 2.068$/vehicle⋅h, and 𝑏 = 0.108$/h.
𝑚 𝑚
Table D1. Data of Volvo 8900 and Ford Transit11
Models Capacity Price ($) Fuel consumption rate (liter/100 km) Service life (year)
Volvo 8900 80 500,000 26 12
Ford Transit 17 76,000 7.4 5
For the bus-km-related cost coefficients, we assume a prevailing gasoline price of 1.1$/liter12. The
bus-km-related costs are also inflated by 20% to cover the cost items other than fuel, such as mileage-
related depreciation, vehicle deterioration, and toll. Based on these assumptions, we determine that
𝑎 = 0.0314$/vehicle⋅km, and 𝑏 = 0.0039$/km.
𝑣 𝑣
11 The passenger-carrying capacity of a full-sized (single-deck, not articulated) bus like the Volvo 8900 may vary depending
on the seat plan requested of the transit agency. For our analysis, we assume a capacity of 80 passengers, including standees.
The purchase cost of Volvo 8900 was obtained from Horrox and Casale (2019). Its fuel consumption rate was extracted from
the Volvo Buses Environmental Blog (https://volvobusesenvironmentblog.wordpress.com/). As for the Ford Transit, we
obtained its seat capacity and purchase cost from the Ford Transit price list
(https://www.ford.co.uk/content/dam/guxeu/uk/documents/price-list/commercial-vehicles/PL-Transit_Minibus.pdf), while its
fuel consumption rate came from the Ford Media Center
(https://media.ford.com/content/fordmedia/feu/nl/nl/news/2014/05/15/ford-launches-first-18-seat-transit-minibus--offers-
improved-eff.html). We learned the service lives of both models from Laver et al. (2007).
12 https://www.eia.gov/petroleum/gasdiesel/, accessed on June 15, 2022.
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