Abstract

Bus-route simulations suggest that minibuses could not survive in North America or Europe if driver wages equal those currently paid mass-transit bus drivers. If minibuses pay taxi-driver wages and standard buses pay current wages, however, minibuses would yield slightly and appreciably lower urban travel costs than standard buses given respectively marginal-cost and current prices for road services. Scale economies justify markedly smaller subsidies for minibuses than for standard buses. Underpriced road services justify substantial subsidies and preferential access to road capacity for both minibuses and standard buses.

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