ABSTRACT
Bus deregulation involves free entry and creates a competitive bus industry. It will principally affect the large conurbations. The chief benefits are: a lowering of labour input costs and a gain in productivity quite probably sufficient in aggregate to sustain bus outputs equivalent on average to those now associated with subsidized provision; a continuation of these gains over time; a substantial reorientation of bus outputs in urban areas, particularly towards those having better financial ratios. These will generate further gains, so correcting a major failing of cross-subsidization. The change, on the whole, will have benign distributional effects; and a great variety of potential innovatory gains in services offered will emerge. External effects on road congestion will be favourable.
