Privatisation and Deregulation of Urban Bus Services: An Analysis of Fare Evolution Mechanisms

This paper describes a model created to analyze the effects of privatization and deregulation of urban bus services in regard to bus fleets and passengers’ valuation of time. Systems in Britain, Santiago, Chile, and Colombo, Sri Lanka, are analyzed. The paper finds that economic distortion can have widely varying effects on the outcome. The history of privatization in the three locales in given, followed by a description of the free market fare determination model. A case analysis of each locale is carried out. The model shows that the urban bus industry has an imperfection in that competitive operators do not face a totally elastic demand at an equilibrium price. Operators enjoy a pseudo-monopolistic position because passengers at a bus stop cannot access competitors simultaneously. The case analysis also shows where deregulation can have a detrimental effect on bus systems, as was the case in Santiago.

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  • Authors:
    • Fernandez, J Enrique
    • Munoz, Juan Carlos
  • Publication Date: 2007-1


  • English

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Filing Info

  • Accession Number: 01042947
  • Record Type: Publication
  • Source Agency: UC Berkeley Transportation Library
  • Files: BTRIS, TRIS
  • Created Date: Feb 21 2007 12:13PM