An Economic Analysis of Regulation of Urban Public Transport in Europe

The objective of this work is to apply economic analysis to urban public transport, at both a theoretical and an empirical level, in order to assess efficiency in terms of both production and consumption. Our study is the first attempt to look systematically at this issue for urban transport at the European level. In so doing we aim to identify the organisational and regulatory features of systems that are efficient in both production and consumption.

Our starting point is an admittedly simplified classification of three broad types of regulatory structure in urban public transport in Europe.

1. Regulated, publicly owned monopolies (`the classical model'). This is the dominant organisational form in 10 member states (AT, BE, DE, ES, LU, GR, IE, IT, NL, PT), although there may be in these states some cities that have variations on this regulatory structure (e.g. regulated, private monopoly) or may have an alternative regulatory structure (e.g. some cities in ES have network management contracts).

2. Limited Competition Models. This has a number of variants. The two most common are the Scandinavian model, based on minimum cost tenders at a route level and represented in three member states (DK, FI, SE), with a variant also in Norway, and the French model, based on network management contracts.

3. Deregulated, Free Market Models. This is dominant form in GB outside London. In London route based tendering has been implemented.