Predatory pricing

Controlled tariffs normally take the form of a fares cap that operators cannot exceed. However they would then still retain the opportunity to charge lower fares, for example in the inter-peak period, if that were to their commercial advantage in attracting sufficient extra ridership so as to increase overall revenue.
Unfortunately, though, that freedom may be abused by a dominant operator seeking to drive out competition from a route through lowering the relevant fares below the cost of production, and/or increasing the transport supply to unrealistic levels; once the competitor has withdrawn from the market, the normal fares or service levels are reinstated.
Protection against predatory practices normally lies in commercial competition law, but an effective response (where there is some degree of regulation) may be to require the dominant operator to sustain the low fares or abnormal service levels for a period into the future and suffer the consequent losses.