A study of the scope for competitive markets in road, rail and air
From these beginnings, administrative regulation of public transport has become all-pervasive, imposing territorial carve-ups, cross-subsidisation, quantity licensing, and price controls. Its proliferation has been justified by a variety of defective arguments about economies of scale in the industry, the supposed instability of competition, the requirements of urban land-use planning, the ‘coordination’ problem, and the ‘right’ of every citizen to mobility.
The stifling of market mechanisms has led to misallocations of resources and such large and consistent losses as to create a widespread myth that public transport can never be run profitably. Reform is urgently needed to permit the market much wider scope.