Mariyam Ismailova | 26.03.2026
Can subsidised public transport reduce urban congestion?
Subsidised public transport is government intervention that aims to provide cheaper public transport through lower fares or subsidies. Urban congestion is a problem arising from excess demand for road use, leading to inefficiencies and pollution. The major debate is whether subsidised public transport helps in addressing urban congestion by providing an alternative to car use through buses and trains. This is because public transport has the potential to carry a large number of people at the same time, thus providing a solution to congestion, but it depends on the service quality, capacity and infrastructure.
Lower fares demonstrate the law of demand, which states that as price decreases, demand for a product increases. Studies have indicated that the change in public transport fares directly influence the number of passengers, which means that an increase in the price would lead to a decrease in the number of passengers, thus showing that subsidies would encourage more use. With lower fares, the attractiveness of public transport increases, more people will be willing to switch from driving their own cars to using public transport, creating a modal shift. As a result, with fewer people driving, there will be less congestion on the roads.
However, subsidies may cause overcrowding especially during peak hours, as the number of passengers increases beyond the actual capacity that the transport system can handle. Research indicates that when the number of passengers exceeds the number the transport system can carry, the number of people within the transport increases, and the time taken to board the transport decreases the frequency of the service. This may cause a long waiting time, delays, and discomfort. Moreover, there is a negative externality effect, whereby the number of passengers within the transport increases, and the perceived cost of travel rises. In the long run, the number of passengers may be reduced, and they may be discouraged from taking public transport.
Public transport is much more space-efficient than the use of private vehicles, as a bus or train can take dozens, if not hundreds, of people at a time, whereas private transports take only a few people at a time. This also leads to a much better environment, as fewer emissions per person will be produced, as well as a reduction in the overall energy consumption when using public transport compared to private vehicles. However, it should be noted that these benefits will only be seen if the city is densely populated, allowing the public transport system to be fully utilized, like the systems in London and Tokyo.
It is important to note that low fares are not enough to ensure an efficient transport system. As seen in the UK, despite government subsidisation of bus transport, the number of bus routes has continued to fall, as have the number of passengers using the services. When the services are poor, many often choose to use cars instead, as cars provide more certainty and flexibility. The poor state of infrastructure also makes public transport unpopular. This means that demand-side policies are not enough by themselves. In reality, supply-side policies play a more decisive role in influencing whether people use public transport services.
Moreover, the benefits of subsidised public transport do not accrue equally to all groups, and its distribution effects can be uneven. For example, in Oslo, it was found that the higher the income of the commuter, the higher the subsidy per trip, especially for those during regional trains. Furthermore, the peak-time user, whose income is probably higher as they tend to be employed in well paid jobs, also tends to benefit disproportionately from the subsidised capacity. While the overall public transport system may be beneficial to the lower income groups, these imbalances indicate that the subsidies do benefit the higher income groups.
In conclusion, the use of subsidised public transport can be quite beneficial to the reduction of congestion, but under certain conditions. First of all, the city should have good transport infrastructure to ensure the smooth flow of the public transport system. Secondly, the city should also have congestion charges to ensure that people do not use their cars to travel around the city. In some cases, the use of public transport can lead to inefficiencies in the system as the city becomes congested due to the use of the public transport system. Therefore, while subsidies can contribute to reducing congestion, they are not a complete solution. Overall, they should be seen as a necessary but not sufficient solution for easing urban congestion.
Lower fares demonstrate the law of demand, which states that as price decreases, demand for a product increases. Studies have indicated that the change in public transport fares directly influence the number of passengers, which means that an increase in the price would lead to a decrease in the number of passengers, thus showing that subsidies would encourage more use. With lower fares, the attractiveness of public transport increases, more people will be willing to switch from driving their own cars to using public transport, creating a modal shift. As a result, with fewer people driving, there will be less congestion on the roads.
However, subsidies may cause overcrowding especially during peak hours, as the number of passengers increases beyond the actual capacity that the transport system can handle. Research indicates that when the number of passengers exceeds the number the transport system can carry, the number of people within the transport increases, and the time taken to board the transport decreases the frequency of the service. This may cause a long waiting time, delays, and discomfort. Moreover, there is a negative externality effect, whereby the number of passengers within the transport increases, and the perceived cost of travel rises. In the long run, the number of passengers may be reduced, and they may be discouraged from taking public transport.
Public transport is much more space-efficient than the use of private vehicles, as a bus or train can take dozens, if not hundreds, of people at a time, whereas private transports take only a few people at a time. This also leads to a much better environment, as fewer emissions per person will be produced, as well as a reduction in the overall energy consumption when using public transport compared to private vehicles. However, it should be noted that these benefits will only be seen if the city is densely populated, allowing the public transport system to be fully utilized, like the systems in London and Tokyo.
It is important to note that low fares are not enough to ensure an efficient transport system. As seen in the UK, despite government subsidisation of bus transport, the number of bus routes has continued to fall, as have the number of passengers using the services. When the services are poor, many often choose to use cars instead, as cars provide more certainty and flexibility. The poor state of infrastructure also makes public transport unpopular. This means that demand-side policies are not enough by themselves. In reality, supply-side policies play a more decisive role in influencing whether people use public transport services.
Moreover, the benefits of subsidised public transport do not accrue equally to all groups, and its distribution effects can be uneven. For example, in Oslo, it was found that the higher the income of the commuter, the higher the subsidy per trip, especially for those during regional trains. Furthermore, the peak-time user, whose income is probably higher as they tend to be employed in well paid jobs, also tends to benefit disproportionately from the subsidised capacity. While the overall public transport system may be beneficial to the lower income groups, these imbalances indicate that the subsidies do benefit the higher income groups.
In conclusion, the use of subsidised public transport can be quite beneficial to the reduction of congestion, but under certain conditions. First of all, the city should have good transport infrastructure to ensure the smooth flow of the public transport system. Secondly, the city should also have congestion charges to ensure that people do not use their cars to travel around the city. In some cases, the use of public transport can lead to inefficiencies in the system as the city becomes congested due to the use of the public transport system. Therefore, while subsidies can contribute to reducing congestion, they are not a complete solution. Overall, they should be seen as a necessary but not sufficient solution for easing urban congestion.
