Fare deregulation of transit services: Winners and losers in a competitive market

Currently, the Hong Kong government imposes fare control on buses and taxi while the rail services are immune to such a control. This study examined four scenarios of fare deregulation on transit services by considering three related parties of a transit system service providers, travelers, and society in general, with their respective objectives represented as - revenue, travel utility, and congestion. Analyzing the resultant impacts on these three parties, we found that a different regulatory environment would favor or hurt a different set of parties. There is no clear win-win situation for all parties. Deciding a socially acceptable regulatory environment is likely to involve difficult tradeoffs among these parties.