Very likely, when you cap the price of something you have to pay the difference, since the public transport is run by private company. Even if it’s government owned company, they still have to pay people that run the company so it will still cost the government if the fare is lower than the cost of running the bus service.
But if it’s private, you’re basically increasing demand on the service by artificially lowering the price, without addressing potential overcharges… I guess it’s still OK because you reduce traffic and end up saving elsewhere, and you can bargain the price collectively. Still I would prefer that bargaining to happen before the measure is put in place and you start giving away public money to a private company
That’s very much the point. There’s more to the cost/benefit ratio than just ticket price and the provider’s profit margins. There’s also the cost to the public of people not using buses: road congestion, which adds to everyone’s commute times; the productivity impact of those longer commutes; the need for parking spaces when cars are used; the cost of that parking; the opportunity cost of those parking lots not being used for something else more socially valuable such as housing; the externalities such as additional noise, pollution and fatal accidents; the reduced disposable income that results from more costly (at point of use) options.
Most bus routes are already subsidised, as demand is often low in a rural area. Maybe there’s enough demand for a couple of services per day, but that’s inconvenient. Subsidies mandate minumum service levels, but don’t cover the full operating costs, so fares are necessary.
£2 per journey is not usually enough to cover costs, so the remainder is paid as another subsidy.
There’s also a vicious cycle where, especially on rural routes, buses are infrequent, which creates a deterrent to using them at all, which in turn depresses ridership. You’re not likely to make a bus trip into town to do some shopping if you can’t get back home for eight hours, and you’re not going to commute to work by bus if the only bus arrives at the needed destination three hours before you start work.
I’m confused, why does the measure cost money to the government? Is the government going to pay the remainder?
I’m confused, did you think busses are free to operate?
Ofc not, see other reply
Very likely, when you cap the price of something you have to pay the difference, since the public transport is run by private company. Even if it’s government owned company, they still have to pay people that run the company so it will still cost the government if the fare is lower than the cost of running the bus service.
If it was were public I’d understand that.
But if it’s private, you’re basically increasing demand on the service by artificially lowering the price, without addressing potential overcharges… I guess it’s still OK because you reduce traffic and end up saving elsewhere, and you can bargain the price collectively. Still I would prefer that bargaining to happen before the measure is put in place and you start giving away public money to a private company
That’s very much the point. There’s more to the cost/benefit ratio than just ticket price and the provider’s profit margins. There’s also the cost to the public of people not using buses: road congestion, which adds to everyone’s commute times; the productivity impact of those longer commutes; the need for parking spaces when cars are used; the cost of that parking; the opportunity cost of those parking lots not being used for something else more socially valuable such as housing; the externalities such as additional noise, pollution and fatal accidents; the reduced disposable income that results from more costly (at point of use) options.
Most bus routes are already subsidised, as demand is often low in a rural area. Maybe there’s enough demand for a couple of services per day, but that’s inconvenient. Subsidies mandate minumum service levels, but don’t cover the full operating costs, so fares are necessary.
£2 per journey is not usually enough to cover costs, so the remainder is paid as another subsidy.
There’s also a vicious cycle where, especially on rural routes, buses are infrequent, which creates a deterrent to using them at all, which in turn depresses ridership. You’re not likely to make a bus trip into town to do some shopping if you can’t get back home for eight hours, and you’re not going to commute to work by bus if the only bus arrives at the needed destination three hours before you start work.
Hopefully the increase in popularity will reduce per-person costs and at that point the government can do collective bargaining.
Thanks for the replies