ABSTRACT

This chapter sets out the basic principles of the economics of bus operations, examining costing and pricing concepts. Other factors affecting demand and market share vis-à-vis other modes are considered. The impacts of different regulatory systems are then examined. The main emphasis is on evidence from Britain, given the extensive experience of different regulatory systems and the research literature available, but international aspects are also examined, notably through cases with sharp variations in regulatory practice (especially Chile) and the growing internationalisation of the contract market. The main focus throughout is on ‘local’ bus services (i.e. those stopping at frequent intervals, mainly kerbside, handling short passenger trips), but reference is also made to the experience of express coach deregulation which has produced somewhat different outcomes to that of local buses.