SUBSIDISATION OF URBAN PUBLIC TRANSPORT

Abstract

Because of the general trend of increasing costs of public transport operation and higher subsidies (in some cases accompanied by falling patronage) the ECMT initiated a study of subsidisation and sought the help of TRRL. The study, which involved 18 countries, was concerned with the aims of subsidy, the sources and conditions attached to subsidy, trends in subsidies and the effect of subsidies on patronage, fares, service levels, costs and productivity. The qualitative information concerning the aims of subsidy was analysed in relation to the likelihood of achieving such aims, with particular reference to current experience of attempts to switch car drivers to public transport. The quantitative information on trends referred to the countries as a whole and covered the period 1965 to 1977; these data were supplemented by data from 59 cities in 7 countries collected in the course of a TRRL sponsored study of travel demand factors. The relationships between patronage and fares and service levels, and between subsidies and various operating factors, including costs and productivity, were studied using regression analysis. The general conclusion reached was that although the major part of the subsidy paid was reflected in reduced fares and improved service levels there may well have been some leakage into higher unit costs and manning levels.(a) (TRRL)

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