Privatisation and Regulation of Urban Transit Systems

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Urban public transport services generally run at a large deficit. This has led public authorities to seek efficiencies, notably through private sector involvement. Support for the sector traditionally seeks to provide basic mobility services to all segments of society, including low-income users. Intervention is also required to manage the natural tendency towards concentration and market power in the provision of these transport services. Policy towards urban public transport is increasingly aimed at managing congestion on the roads and mitigating CO2 emissions by substituting for travel by car. 

Achieving coherent transport networks that are efficient and financially sustainable is a challenge for any public authority. This Round Table examines experience in integrating private management and capital with public transport policy objectives in a number of developed economies. For network operators, the Round Table concludes that innovation is the key to surviving the rapidly changing policy and regulatory environment.

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Privatisation, Regulation and Competition: A Thirty-year Retrospective on Transit Efficiency

International Transport Forum

The past few decades have seen transit patronage decrease in all Western countries, including Europe and the United States, lagging far behind the substantial growth in mobility that has occurred during the same period. Among the more important factors offered by many authors to explain the observed reductions in public transit have been the rising levels of real income and decreasing relative costs of private travel. Combined, these factors have led to significant increases in automobile ownership and population shifts from central cities to suburbs, both of which reduce the demand for public transit. An important implication of the changing land-use patterns is the need for public transit to adapt their operations – including routes, service frequency, work rules and fare structures – to meet the changing needs of their customers and to provide more efficient transit services. Yet, throughout the past thirty years, public transit systems have either been reluctant or unable to significantly alter their operations.

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