Business models

Transport markets vary by country, region and mode of transport. We operate different business models according to the structure and needs of each local market - tailoring our offering to provide the best service to customers wherever we are.

Contracted services
Most of our mainland European bus and rail markets are contracted services where the primary customer is usually a public sector body. In some countries, regional governments and transport authorities have the responsibility for tendering services for designated routes and areas. In the UK, for example, London bus routes are directly contracted by a devolved authority - Transport for London.

Types of contract
There are two main types of contracted arrangement: gross cost and net cost. With gross cost contracts, the tendering authority pays an operator to provide services, retaining the passenger revenue and often setting the routes and specifying the types of vehicles. Some of our rail operations in Sweden as well as our bus contracts in Denmark, Hungary, Sweden and Spain are gross cost contracts.

With net cost contracts, the operator takes on both the income risk and the cost risk but retains all passenger revenue. Arriva operates net cost contracts across Europe, including the UK rail, Swedish bus, Polish rail and Italian bus markets.

Deregulated services
These are fully commercial operations with the relationship directly between Arriva and our passengers. Passenger payments are the main source of income so services must be profitable to be sustainable. Returns have to cover replacement vehicles, depot facilities and the expansion and development of services. Most of our bus operations in the UK outside London operate on a purely commercial basis, as do our services in Spain and Portugal.

Explore our European operations

Integrated transport is a key feature of transport in the Netherlands. Arriva successfully operates a number of integrated transport contracts, including that for Achterhoek-Rivierenland. The 10-year bus element of the contract in Gelderland got off to a good start in December 2010, and the rail side began in 2012.

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