Direct poverty alleviation

In urban areas with low levels of formal employment, general poverty can be widespread and those affected may be included in the disadvantaged. If fares act as a barrier to their personal mobility, this can then directly impact on access to economic opportunities and so reinforce the poverty problem.

Whilst poverty alleviation is often used as a justification for suppressing fares, this is actually a poorly targeted and expensive response. Not only does a universal reduction in fares discard all additional revenues that the better-off would have been prepared to pay, but also the necessary compensation to the transport system carries a high opportunity cost in respect of alternative potential societal uses. If direct poverty alleviation is a real policy objective, then this would be better achieved by qualifying families being included in formal concession schemes and being made subject to the same controls.