Public Managers’ Perceptions of Industry Shocks and Contracting During Times of Turbulence: Adapting or Staying the Course

Abstract

This study examines how public transit managers adapt their contracting behavior in response to two industry shocks: new technologies (rideshare services, teleworking) and the COVID-19 pandemic, both of which led to significant declines in public transit ridership. In an industry heavily reliant on a mix of government and contracted services, transit agency managers are responsible for upholding contracts and ensuring compliance to achieve desired outcomes while weighing risks and adjusting capacity. This research explores how public managers perceive the efficiency and risk of contracting arrangements during this turbulent time by analyzing survey data collected biannually between 2015 and 2023. Contrary to expectations that managers would increase contracting as a cutback management strategy, findings reveal no significant changes in contracting behavior. Transit managers perceive ridesharing as having limited impact and view the pandemic as a disruption, but not a reason to alter contracting arrangements. This lack of responsiveness suggests that managers consider their current mix of in-house and outsourced service delivery efficient and effective in managing risk. Rather than increased contracting as cutback management strategies to improve efficiency amidst decreased ridership, transit agency managers maintained a steady course in their contracting behavior, prioritizing stability and incremental adjustments over fundamental shifts.

Keywords: Contracting, Public transit, Transit agencies, COVID-19 pandemic, Ridesharing services, Transit disruptions