Effects of privatization of public urban transport - the case of Beograd

The transport of passengers has a strong effect on the functioning of the city and for this reason is generally publicly financed. The process of privatization in the field of public urban transport was initiated recently. There is a lack of precise analysis on the effects that this has on the fulfillment of other important urban functions. Competition in urban transport is welcome, but the profit motive must be put under tight rules. Only a precise set of rules for the competitors in urban transport can bring about the desired social, economic and technological results. The paper presents the model of the privatization of public urban transport in Beograd, which was undertaken under the harsh constraints of lack of funds for subsidy of operators. The effects of the model of privatization are analyzed from the aspects of: (a) city governance, (b) passengers, (c) operators and (d) bus producers.