Berlin, Germany--In spite of the ongoing recession, Berlin's public transport
enterprise (BVG), in which the city maintains a controlling interest, has been applying
business principles to its operations and is well on its way to becoming an independent
service provider.
Unemployment hovers around 15 percent in Germany's capital city, but the BVG was able
to ratchet up its farebox coverage of operating costs to 61 percent last year, due to a
range of cost-cutting measures that reduced the payroll by more than one-third.
BVG finance chief Joachim Niklas told an international conference in Miami earlier this
year that the system's total employment has fallen from 28,000 to 16,000. Concurrently,
the number of department heads has declined from 170 to about 70 in the course of the
company's restructuring into a series of "cost centers" whose managers have
become "businessmen within the BVG." Productivity has risen by 60 percent in
recent years.
The company in the reunited capital is responsible for nine metro lines, 21 light rail
lines, and 161 bus lines traversing the entire city. The network includes some 93 miles of
underground, 224 miles of light rail, and 1,180 miles of bus lines that collectively carry
about 780 million passengers a year.
With the economic turndown, the BVG has faced a ridership drop, but it has made up for
it in a number of innovative ways other than cost cutting and productivity initiatives,
including:
- renting out space in 28 major subway stations to concessionaires that operate stores,
sell BVG tickets, and improve the station ambiance;
- operating an intercity coach company and travel agency that offers bus trips within
Germany and Europe;
- building an award-winning bus shelter manufactured in the BVG workshop and funded by
advertising revenues, some 1,500 of which have already been erected;
- making it easy for passengers to buy and renew monthly passes at over 1,000 retail
outlets and some 3,500 vending machines in stations and on buses, meaning that more than
80 percent of BVG's riders now use season tickets;
- obtaining revenues from sports and cultural events organizers, lately even hotels and
car repair shops, for the use of tickets, room registration cards, or service receipts as
farecards;
- contracting with companies and federal government agencies for discounted,
tax-deductible farecards for their respective employees;
- fielding some 500 inconspicuous retired employees on a small stipend, dressed in
civilian clothes, to reduce fare evasion and fine evaders; and
- promoting customer loyalty through the organization of a free BVG Club that provides
numerous incentives and cultural/social events for rail and bus buffs, including
"behind the scenes" tours, a magazine, and site visits.
The fleet has been spruced up; new low floor light rail cars have been phased into
service, along with the new H series of subway cars that are considered especially
customer friendly. The new subway cars have room for bicycles, wheelchairs, and baby
carriages, are ready for driverless operation, and feature unrestricted passageways
throughout the train without doors between individual cars.
Nearly 60 miles of dedicated bus lanes have already been set up to reduce congestion,
and the program continues. Intelligent Transportation Systems technology provides
intersection priority to prevent buses from getting stuck in traffic and real-time
passenger information displays. A contactless farecard system is in the testing stage,
with 25,000 participants on underground, bus, and light rail lines.
The company has even discovered a profitable new life for its old buses. BVG workshops
convert double-decker buses that have come to the end of their programmed life cycle into
open-top buses for sightseeing jaunts around Berlin. The "topless buses," which
come fitted with a folding roof in case of rain, have been bought by tour companies in
Hamburg, Germany, and Copenhagen, Denmark. Negotiations are underway with a Brussels
operator.
Over the past two years, BVG also has offered an unusual performance guarantee said to
be unique in Germany's local transport industry. According to Niklas, the customer
guarantee sets up self-enforced standards of punctuality and cleanliness. Every passenger
who reaches his or her station stop with a delay of more than 20 minutes beyond the time
shown in the current timetable is sent a free ticket. Moreover, if the delay occurs after
11 p.m. and the customer is forced to take a taxi, the BVG will reimburse the taxi charges
up to 50 marks ($30) upon presentation of a receipt. Similarly, if suits or dresses are
soiled as a result of dirty vehicles or equipment, the system will reimburse the rider's
cleaning costs.
"The BVG is convinced it offers good service," Niklas explained. "Our
customer guarantee makes it clear that the BVG takes its claim to be a customer-oriented
service company seriously. The image of the BVG has greatly benefited as a result."
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