Standard pricing for similar services

The objective of this policy would also be social equity, in that the price paid for a journey would be the same for similar lengths of travel irrespective of the commercial viability of the respective services.

However its application is relatively rare where there is competition in the market, as each route acquires its own fares in response to its particular circumstances. Operating costs vary with the duration of travel as well as the distance and road conditions, and revenues vary with demand density and distribution, so the break-even fare rate will be different in each case.

To implement such a policy effectively, therefore, either requires that services be provided under gross-cost contract, or that net-cost contracts are tendered against standardized fares assumptions (with contract award then being based on premium bid or subsidy demanded). In this manner, the profitable services in the network can then be used to support those that are uneconomic at the specified fare through cross-subsidy.