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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2010. A Methodology for Performance Measurement and Peer Comparison in the Public Transportation Industry. Washington, DC: The National Academies Press. doi: 10.17226/14402.
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Page 4
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2010. A Methodology for Performance Measurement and Peer Comparison in the Public Transportation Industry. Washington, DC: The National Academies Press. doi: 10.17226/14402.
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Page 5

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4Research Problem Statement Performance measurement and peer comparison are im- portant management tools that have been used by the private sector since the late 1970s. These tools are used to evaluate performance, identify opportunities for improvement, es- tablish performance goals, and help guide expenditures and investments. They are a means to help organizations better understand and see themselves in relation to other, similar organizations. Performance measurement and peer compar- ison are often initial steps in an effort to assess strengths and weaknesses and develop strategies for changing business practices. There are numerous challenges associated with developing a methodology for performance measurement and peer com- parison for public transportation. Many would argue that no two public transportation systems are alike and that data used to measure public transportation performance are not com- parable or even reliable. Public transportation systems that seem similar may have very different policy objectives or may operate in environments where public transportation has a vastly different competitive position relative to transporta- tion alternatives. Such differences impact performance. Un- less properly addressed, these matters raise questions about the value of performance measurement and peer comparison for public transit systems. Another issue, specifically with peer comparison, is a con- cern on the part of public transit systems that the results of peer comparison may be misused and misconstrued. Most peer comparisons of public transportation systems have been conducted by grouping systems based on a narrow range of factors, focused principally or exclusively on characteristics of the public transit systems. This method can lead to group- ings of systems that are, in fact, not comparable. However, other approaches for peer comparison exist and are worthy of consideration, including comparison based on organiza- tional function and comparison that is purpose driven. If an appropriate methodology is used, performance mea- surement and peer comparison of public transit systems can be extremely useful tools that can help managers identify the strengths and weaknesses of their organization, assist in setting goals or performance targets, and help identify best practices to improve performance. In addition to improved manage- ment and operations, performance measurement and peer comparison can assist public transit in demonstrating its abil- ity to meet local or regional transportation goals that can in- clude safe and efficient mobility as well as broader environ- mental, energy, and other goals. Research Objective and Scope The objective of this research was to develop and test a methodology for performance measurement and peer com- parison for (a) all fixed-route components of a public transit system, (b) the motorbus mode specifically, and (c) major rail modes specifically (i.e., light rail, heavy rail, and commuter rail). The scope of the project was as follows: • The methodology should include performance measures composed of uniformly reported data that are as transpar- ent as possible, credible, and relevant to the concerns of public transportation systems. • The peer comparison approach should enable performance assessments of public transportation systems of different sizes, operating environments, and modes. • The research should consider lessons learned from other industries and from international transit peer-comparison experience. • The research should identify potential applications for the methodology and develop potential strategies for industry adoption of the methodology. • The methodology should be able to be applied not only by individual public transit agencies, but also by state depart- ments of transportation and other transit funding agencies. C H A P T E R 1 Introduction

5Research Approach The research plan consisted of the following tasks: 1. Prepare amplified research plan; 2. Prepare literature review and agency experience; 3. Identify comparison factors, performance measures, and applications; 4. Develop initial methodology; 5. Develop outreach plan; 6. Prepare interim report and conduct panel meeting; 7. Revise interim report/execute outreach plan; 8. Modify methodology; 9. Conduct small-scale application; 10. Conduct large-scale application; 11. Interpret results/recommendations; and 12. Prepare draft and final reports. How to Use This Report This report uses the term peer comparison to describe any activity where a transit agency compares its performance to that of similar (“peer”) agencies using a predetermined set of performance measures. Benchmarking adds the element of seeking out best practices to emulate. In other words, a peer comparison provides an informative, but passive, starting point to a performance analysis, but is unlikely to explain why particular transit agencies are successful in particular areas. Benchmarking involves direct agency contact, delves into the reasons for agency success, and seeks to uncover transferable practices applicable to the agency performing the analysis. Chapter 2, Performance Measurement, Peer Comparison, and Benchmarking, will be of interest to transit managers, decision-makers, and others interested in learning more about benchmarking and its potential benefits. This chapter sum- marizes past and present benchmarking activities in the pri- vate and public sectors, along with benchmarking activities specific to the public transit industry inside and outside the United States. It describes the different levels of benchmark- ing, ranging from simple trend analysis to formal, long-term cooperation and information-sharing with similar, like-minded transit agencies. The chapter goes on to describe the key fac- tors required for a successful benchmarking effort, reviews the transit industry’s positive and negative perceptions of peer comparisons, and summarizes lessons learned. Chapter 3, Applications and Performance Measures, de- scribes a variety of applications for peer comparisons and pro- vides lists of readily available, standardized measures that can be matched to specific performance questions. Transit man- agers will likely be most interested in the applications section of this chapter, while agency staff responsible for performing peer comparisons will want to read the entire chapter. Chapter 4, Benchmarking Methodology, will be of interest to both transit management and agency staff responsible for performing self-reviews, peer-comparisons, or full-scale bench- marking efforts. The chapter describes the methodology de- veloped and tested by this project as a series of steps. The full process involves eight steps; however, depending on the time and resources available for the effort and the nature of the performance question being investigated, not all of the steps may be needed. Chapter 5, Case Studies, draws from the methodology test- ing conducted for this project. It provides examples of using peer comparison to address a variety of performance ques- tions. Agencies can use this section for inspiration on how they might organize their own peer comparison. Chapter 6, Concluding Remarks, includes recommended strategies for incorporating performance measurement and benchmarking into the business practice of the U.S. public transportation industry. The report also includes the following appendixes: • Appendix A provides detailed instructions for using the online software tool as part of a benchmarking effort. • Appendix B describes the development of the peer-grouping portion of the methodology and the process used to calcu- late likeness scores. • Appendix C provides the working paper for Task 10 of the project, summarizing the lessons learned from the real- world tests of the project’s benchmarking methodology.

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TRB’s Transit Cooperative Research Program (TCRP) Report 141: A Methodology for Performance Measurement and Peer Comparison in the Public Transportation Industry explores the use of performance measurement and benchmarking as tools to help identify the strengths and weaknesses of a transit organization, set goals or performance targets, and identify best practices to improve performance.

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