Abstract
More public authorities nowadays engage specialised undertakings to perform public services. This raises questions on the applicable rules to the selection of public service providers as well as their remuneration for public service delivery. The paper discusses the models of providing urban public transport services in the EU and in Poland and the conse-quences of adopting ones in the context of the EU common market, in particular resulting from the public procurement and state aid rules. The very common model in Polish cities which consists of the co-existence of the Public Transport Authorities (the organisers of local public transport) and the operators (carriers) who are budgetary establishments or publicly-owned commercial companies, where ‘the internal provider exception’ under public procurement rules is appli-cable, the compliance of the public services financing with state aid rules remains to be challenging for public authorities
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