Chapter 17: Bus Services: Deregulation and Privatization (Lessons for Third World Cities)

There is a growing tendency towards deregulation and privatization around the world (Armstrong-Wright and Thiriez, 1997). In parallel there has been greater participation of private operators in the supply of bus services. Sometimes this has been the result of deliberate government policy, for example, as in the case of the U.K. Here the aim was to introduce market forces, improve supply, and reduce the heavy subsidies being paid for publicly owned services. In developing countries local authorities have, in addition, been faced with very rapid growth in demand that has overwhelmed their publicly owned services. Few have resources to allow subsidies to go on growing in pace with increasing demand. As a result, publicly owned services, in terms of quality and quantity, have seriously declined. The vacuum created has been readily filled by a wide variety of privately owned transport modes from autorickshaws to double-deck buses. This situation has evolved rather than being the result of formal government decrees to deregulate and privatize.