Both local and national government may opt to subsidize public transport, of social, environmental or economical reasons. Key motivations are the need to provide transport to people those who cannot afford or are physically or legally incapable of using an automobile,and to reduce congestion, land use and emissions of local air pollution and greenhouse gases. Other motives may be related to promote business and economic growth, or urban renewal in formerly deprived areas of the city. Some systems are owned and operated by a government agency; other transportation services may be commercial, but receive greater benefits from the government compared to a normal company.
Subsidies may take the form of direct payments to unprofitable services, but also indirect subsidies are used. This may include allowing use of state-owned infrastructure without payment or for less than cost-price (may apply for railways and roads), to stimulate public transport's economic competitiveness over private transport, that normally also has free infrastructure. Other subsidies include tax advantages (for instance aviation fuel is typically not taxed), bailouts if companies that are likely to collapse (often applied to airlines) and reduction of competition through licensing schemes (often applied to taxis and airlines). Private transport is normally subsidized indirectly through free roads and infrastructure.
Land development schemes may be initialized, where operators are given the rights to use lands near stations, depots, or tracks for property development. For instance, in Hong Kong, MTR Corporation Limited and KCR Corporation generate profits from land development to cover the partial cost of construction, but not operation, of the urban rail systems.
Subsidies may take the form of direct payments to unprofitable services, but also indirect subsidies are used. This may include allowing use of state-owned infrastructure without payment or for less than cost-price (may apply for railways and roads), to stimulate public transport's economic competitiveness over private transport, that normally also has free infrastructure. Other subsidies include tax advantages (for instance aviation fuel is typically not taxed), bailouts if companies that are likely to collapse (often applied to airlines) and reduction of competition through licensing schemes (often applied to taxis and airlines). Private transport is normally subsidized indirectly through free roads and infrastructure.
Land development schemes may be initialized, where operators are given the rights to use lands near stations, depots, or tracks for property development. For instance, in Hong Kong, MTR Corporation Limited and KCR Corporation generate profits from land development to cover the partial cost of construction, but not operation, of the urban rail systems.
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