The Political Economy of Urban Transport

This paper describes how the public sector interferes in the operation of urban transit in many distinct ways in most countries. In the past, public transit systems have usually been operated by the public sector itself, with pricing and investment decisions directly under political control. Many countries have begun to privatize transit companies, but even then, regulations of pricing and investment decisions usually remain. One specific aspect is that public transit is usually heavily subsidized. According to the American Public Transit Association (APTA 2006), total fares in several thousand public transit authorities in the US accounted for only 33% of operating costs and 23% of total operating and capital costs, while for Europe corresponding figures show fares cover about half of operating costs (APTA, 2005). Urban transit is obviously heavily subsidized through general tax revenue. Interestingly, automobile travel too, often does not cover the full costs of road construction and usage (let alone environmental and accident costs). Indeed, in the US, user fees (including gasoline taxes, license fees and other charges) accounted for only 60% of total highway expenditures. In Europe, higher petrol taxes suggest that subsidies to automobile travel should be significantly lower. These subsidies obviously have repercussions on individual commuting choices. For instance, subsidizing automobile travel may provide incentives for individuals to move further out from the city centers into the suburbs.

  • Availability:
  • Corporate Authors:

    European Conference of Ministers of Transport

    2 rue Andre Pascal
    F-75775 Paris Cedex 16,   France 
  • Authors:
    • Borck, Rainald
  • Publication Date: 2008


  • English

Media Info

  • Media Type: Print
  • Features: Bibliography; Figures;
  • Pagination: pp 23-46
  • Monograph Title: Privatisation and Regulation of Urban Transit Systems

Subject/Index Terms

Filing Info

  • Accession Number: 01140524
  • Record Type: Publication
  • ISBN: 9282101991
  • Files: TRIS
  • Created Date: Sep 21 2009 2:22PM