Learning from medium- and small-sized bus services in developing countries: Is regulation necessary?

There are a rich variety of passenger transport modes other than ordinary buses and taxis in the cities of developing countries. In the collective consumption transport (i.e. omnibus) sector, medium- and small-capacity transport modes are prominent in addition to ordinary stage bus services. In the market of those medium- and small-sized collective consumption transport modes, the advantages of free competition are fully demonstrated because of loose control, and the market performance is generally satisfactory. While ordinary stage buses (‘fixed route’ omnibuses) are given subsidies, medium and small transport modes are operated with profits, and superior than ordinary stage bus services in terms of service level and coverage area. Although the regulatory authorities of many developing countries hope for the enforcement of the same type of control that is prevalent in the advanced countries, it is the author’s opinion that the performance of existing strict control in the advanced countries is far from desirable.