Interregional bus services will become official

07-02-2018

The Government approved amendments to the Resolution No.1081 prepared jointly with BRDO experts to liberalize the market of interregional bus services and make it official.

In Ukraine, 70-80 people die every year and another 800 people are injured because of dangerous buses. This is a risk not only for bus passengers – pedestrians, cars and all the vehicles driving along the road are threatened. And this danger is not justified, because most of the market is in the informal economy, so honest businesses can not earn. The size of the illegal transportation market is 2.74 billion passengers per year, which is twice as much as the population of China.

What was the problem? Under the current system of tenders for routes, a carrier who won feels like a monopolist for 3-5 years. On the other hand, official carriers need more time to respond to the rapid changes in passenger flows, and illegal carriers take advantage of this situation.

What will the amendments to this resolution bring? The market will be liberalized. The key aspect of amendments to the resolution of the Cabinet of Ministers No.1081 is to remove restrictions on the number of bus lines, introduce the possibility of forming routes on the initiative of applicants. Local self-government bodies will be able to order transportation services, that is, to arrange transportation of vulnerable social groups under tariffs they defined.

What do we finally get? It will be safer to travel by bus, a share of legal interregional bus services will increase from 50% to 90%, the quality of services will be improved in a competitive market and tariffs will decrease to economically justified ones.

 

 

 

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