(Dis)satisfaction with public services: the case of public transportation

Abstract

Public services are offered to the public based on the principle of equality. Private services on the other hand are based on differentiation. These differences raise the question of whether customer preferences for public services are homogeneous while preferences for private services are heterogeneous. Builds on an empirical study of 1,000 customers using either bus, train or tram in and around the greater area of the capital of Norway. Discusses customer (dis)satisfaction with public transportation services. Concludes by claiming that individual customer preferences exist and that high – and low-frequency users of public transportation services have different preferences. As a consequence, the industry has a low overall customer satisfaction score. Implementing differentiated public services will improve the satisfaction score, i.e. expected utility, and thereby reduce the need for privatizing the industry.