An incentive subsidy mechanism for bus lines based on service level

Reasonable financial subsidies can promote public transport enterprises to raise service level, attract public transport passengers and improve the efficiency of fiscal funds. There are various bus lines that make up the urban public transit network. In this study, the single bus line is taken as the research object to establish the close relationship between the service level and the subsidy. An incentive bus subsidy method including measurement and effect evaluation is proposed. The measurement method is a dual-objective model that considers public welfare and market characteristics, and aims at maximizing the expected welfare of passengers and enterprises. The effect evaluation method of the incentive subsidy is designed to manage bus enterprises by the calculation and comparison of service level indicators. A practical example is presented to verify the effectiveness of the bus subsidy method, and shows how to regulate the bus enterprises when the bus service level declines. This study provides a method for the scientific design of incentive bus subsidies, which can encourage bus enterprises to improve their level of service, and help the government to optimize the decision-making on public transport subsidy policy.