1

2) Road based urban transport

• Paratransit– Publicly available passenger transport

services outside the traditional transport regulatory system

– Example• Large minibus, minibus, “ojeg”,” becak”, etc

2

2.1) Characteristics

• Unscheduled services– “very” demand-responsive services– “filling gap” formal transports

• Smaller sizes and simple

• Need small investment

• “Non-corporate” and “fragmented”

• Else?

3

2.2) Roles or service provided

• Dominant for the poor

• Supplement to formal transport services

• Feeder services and local distributions

• Trunk services (compete with formal)

4

2.3) classifications

• Vehicle types– large bus, minibus, motorcycle, etc.

• Service features– Routes and routes: fixed or flexible

• Passenger capacity

• Market regime– Franchised, licensed, and unregulated

• See table 7.2 (ref 2, chapter 7)

5

2.4) Merits

• Source of employment for the poor

• “of the poor” and “by the poor” services

• Entry point to urban employment

• High & better respond to consumer demand– Little need for government regulation

• “feeder services” to formal transports

6

2.5) Disadvantages

• Image and reputation problems– Very low earning sectors– Exploitation of vehicle owners (unfair

business)– Associated with poverty

7

Why image problems?

• A) Dangerous on-the-road behavior– Associated with crime and violence

• B) Urban congestion & adverse environmental impacts

• C) Undermining of basic network services

8

A) Operating practice

• Exploitation on leased vehicles & undisciplined services with low profitability

• Due to competition pressure to earn living– Excessive capacity– Anti-social and dangerous operation

• Passenger safety, racing, turning short, transferring passengers, blocking, etc.

• Self regulation (long run) to limit entry & organize more disciplined services– Association

9

Is self regulation good?

• Outside public control– Acts not in the interest of consumers

• Fares may increase

• Self-regulation not based on any legal rights of exclusion– Leads to violent means (to enforce the need)

• The need to ensure fair revenue allocation results in suboptimal practice

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B) Externalities

• Excess supply due to competition (to earn living)– Smaller vehicles (need less capital and operating

costs)– With low labor costs -> no incentive for using larger

vehicles

• The effects of congestion & adverse environmental are external, incentive to use smaller (less expensive) vehicles

• (as a results) level of congestion is severe

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Externalities: economic distortion

• Excess supply of labor in urban areas• Minimum public sector wage rates• Inefficient operation of informal operators

• No appropriate transport pricing system for using road space

• No incentive for using larger vehicles

• (results in) explosion of informal services in SMALL vehicles

12

C) Undermining network services

• With its capability to provide door-to-door services (dense networks), informal can compete with the traditional larger vehicles

• Disadvantages of those captive to the traditional (larger) vehicles– Higher fares– Less frequent services

13

Things to wonder

Informal provides

better respond to consumer demand

&Employment (economic) activity

Informal brings

congestion &

environmental degradation &

Network problems

PolicyControl the growth of informal