FINANCING OF LOCAL PUBLIC TRANSPORT

This report studies ways of improving the economics of public transport in urban areas. This is an acute problem because today 60% of the costs of public transport in Sweden are subsidized by taxes. In this report the theoretical prerequisites for making low costs are discussed. Some experiments with different tariffs which have been carried out during the last 10-15 years, mostly in the USA, are presented. A number of tests, where measures to improve the services in public transport have been made, are also studied. Public transport can reduce the need for tax subventions, if it increases the price of the tariff or decreases the services. The conclusion drawn from this report is that the financial issues cannot dominate a cost benefit analysis of the public transport. There are so many other aspects, e.g. sociological and environmental, that must be considered.