Around the World in 80 Ideas   

13: City slicker
Shared taxis and buses

The problem: poor quality public transport

Many cities own, or strictly control, their bus, underground and tram systems. But too often, these transport services run at a loss or provide a poor service to the travelling public. The same is often true of inter-urban services too.

The idea: set provision free

In some parts of the world, however, transport services are provided by private operators, who have developed innovative ways of providing flexible services at an affordable cost.

Examples: entrepreneurial transport

Privately-run buses and shared taxis take a variety of forms, as dictated by local transport conditions and needs. Typically they charge the same or higher fares than the state-run or city-franchised bus services, but offer higher quality in terms of cleanliness, convenience, frequency, and journey times.

Private buses in Calcutta. Bus services in Calcutta, India, though originally private, were nationalized in 1960; but financial and management problems soon set in, and this policy was changed six years later, with permits being issued to 200 private buses to work in the city.

By the late 1970s, these private services had expanded to around 2000 buses and minibuses. Today the private sector carries about two-thirds of all passengers, while the state sector, charging the same fares, loses money. Three factors explain the difference. First, breakdowns mean loss of revenue for private bus owners, so they ensure that repairs are carried out instantly, using parts obtained on the black market if necessary: but the state transport corporation has no such incentive, and must obtain spares officially. Only half its buses are on the road at any time. Second, private bus crews are paid on the basis of revenues, and so make greater efforts to collect fares than state employees. Third, private buses use labour more productively.

Jitneys in Cairo. In Egypt, Cairo's jitneys are minibus services which operate on fixed routes, but on a flexible timetable. The destination is posted on the vehicle, but they wait until they are full before setting off. (A similar system is operated in Jordan, and by the shared inter-city sherut taxis in Israel.) They can stop to let off passengers in mid-route, and are allowed to pick up new passengers when doing so. Fares are higher than for the state-run buses, but services are more reliable and better quality.

The operators work as a union, agreeing routes and fares, and pay for dispatchers, signage, and waiting facilities from a levy on tickets. Outside investors own around four-fifths of the vehicles, which are then leased to drivers in return for a payment of around a quarter of their fare revenue.

Collectivos. Buenos Aires, the capital of Argentina, has a variety of transport systems serving its population of around ten million. The most important, accounting for three-quarters of public transport journeys, is the microbus or collectivo. They began life in the 1920s as shared taxis, running routes selected by the drivers, with each passenger paying a fare individually. The same principle still operates, though the vehicles have grown from 7-seaters to (typically) 25-seaters.

The service is organized round route associations formed by vehicle owners, about a third of whom are actually owner-drivers. The owners agree to abide by the rules of their association, and contribute to the expenses of the association, which for legal reasons nominally employs the drivers (though the owners themselves are in charge of hiring and firing). Owners and their families are responsible for the running, maintenance and repair of their own vehicles, but the income from operation is divided between association members on principles agreed between them. The system therefore combines the benefits of owner-control with the reliability of having several operators serving a route.

Jeepneys in Manila. In the Philippines, around half of public transport journeys in Manila are made by jeepney - named after the US Army jeep from which the originals were constructed, but now much larger (typically 14-seaters) and often exotically decorated. The jeepney industry employs perhaps 100,000 people driving, servicing, and building around 30,000 vehicles. Despite efforts to rationalize the city's transport using conventional buses, the jeepneys remain popular, especially for short journeys.

Istanbul's dolmus. The dolmus (which means 'stuffed') and the minibus have emerged as the prevailing forms of public transport in Istanbul, Turkey. The five-seater or seven-seater dolmus provides a shared taxi service along fixed routes, but can be used as a conventional taxi when the need arises. Thus a taxi going out on a long journey may operate as a dolmus on the way back.

The matatu of Nairobi. Informal transport flourishes in Kenya as the matatu, which use a variety of vehicles seating anything from 12-25 passengers. Nearly half of them are owner-driven. They supplement the franchised bus service, carrying large numbers of passengers at peak times in particular.

Nederlands Spoorwegen, the railway company in the Netherlands now provides what it calls 'train taxis'. Parked outside rail stations, these vehicles wait until they assemble a group of passengers with the same approximate destination, taking them as a group. Shared taxi systems also work in various United States cities such as Washington DC.

The results: flexible travel

Although planners have often attempted to suppress informal public transport such as shared taxis, they have proved remarkably resistant. Being organized, and largely owned and driven, by individual entrepreneurs, they have a close understanding of what their travelling customers want and can respond quickly to make sure that they provide it - and so they remain popular.

In some cases, there are concerns about the standard and safety of the vehicles that are used; in places, the concerns become more prominent because informal public transport is actually provided illegally. Generally, though, informal and privately-provided public transport offers passengers a better and cleaner service in return for a slightly higher fare than is charged by public alternatives. And it is clear that the transport systems of many cities would collapse without it.

For more information.
  • Roth, Gabriel and Shepherd, Anthony (1984) Wheels Within Cities: Adam Smith Institute (London)
  • Pirie, Madsen (1980) The Paratransit Light Vehicle: Adam Smith Institute (London)

Copyright 2002: Adam Smith Institute        Created and Maintained by: Cyberpoint Limited