Juan Carlos Munoz
NBER Working Papers and Publications
|November 2005||"The War for the Fare": How Driver Compensation Affects Bus System Performance|
with Ryan M. Johnson, David H. Reiley: w11744
Two systems of bus driver compensation exist in Santiago, Chile. Most drivers are paid per passenger transported, while a second system compensates other drivers with a fixed wage. Compared with fixed-wage drivers, per-passenger drivers have incentives to engage in "La Guerra por el Boleto" ("The War for the Fare"), in which drivers change their driving patterns to compete for passengers. This paper takes advantage of a natural experiment provided by the coexistence of these two compensation schemes on similar routes in the same city. Using data on intervals between bus arrivals, we find that the fixed-wage contract leads to more bunching of buses, and hence longer average passenger wait times. The per-passenger drivers are assisted by a group of independent information intermediaries call...
Published: Ryan M. Johnson & David H. Reiley & Juan Carlos Muñoz, 2015. "“THE WAR FOR THE FARE”: HOW DRIVER COMPENSATION AFFECTS BUS SYSTEM PERFORMANCE," Economic Inquiry, vol 53(3), pages 1401-1419.