Why Competition Does Not Work in Urban Bus Markets: Some New Wheels for Some Old Ideas

This study examines experiences in de-regulating competition in urban transit, which has been marked by lack of price competition, excessive entry and inefficient frequency decisions, safety hazards, informal ownership structure and conflict between operators in competing for passengers. The example of Santiago, Chile, is given, where the urban transport sector was liberalized between 1979 and 1983. In 1991, tendered franchises replaced the old system. Sri Lanka is also cited. Another phenomenon is the likelihood of cartels forming after liberalization is rescinded. However, the effects they have on pricing and entry are not clear. Here the authors present a model using ideas from the job search and price dispersion literature to characterize the pricing equilibrium of a competitive bus market. Conclusions suggest that tendering may be a better way to promote competition and lower fares than blanket liberalization.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/oclc/856156
• Authors:
  • Gomez-Lobo, Andres
• Publication Date: 2007-5

Language

• English

Media Info

• Media Type: Print
• Features: Appendices; References;
• Pagination: pp 283-308
• Serial:
  • Journal of Transport Economics and Policy
  • Volume: 41
  • Issue Number: 2
  • Publisher: University of Bath
  • ISSN: 0022-5258
  • Serial URL: http://www.jtep.com

Subject/Index Terms

• TRT Terms: Bus transportation; Competition; Equilibrium (Economics); Fares; Mathematical models
• Subject Areas: Finance; Motor Carriers; Planning and Forecasting; Public Transportation;

Filing Info

• Accession Number: 01054539
• Record Type: Publication
• Source Agency: UC Berkeley Transportation Library
• Files: BTRIS, TRIS
• Created Date: Jul 30 2007 8:30AM