Economic Instruments - Subsidies

Public Transport Subsidy (France)

public transit modes within a given number of concentric zones. "Carte Orange" covers two zones which include the city of Paris and the first ring of suburbs totalling 3 million people and 2 million jobs. It can also be purchased to cover the entire five zones of the agglomeration. The price of a two zone "Carte Orange" is equivalent to the price of twenty full fare metro tickets. The holder is entitled to ride any public transport mode (i.e. bus, train, metro) at any time for any distance at no additional cost.

All together, employers in the Paris region bear about 35% of the public transport costs. However, the Paris "Carte Orange" does not entice transit riders to travel off-peak.

 

Performance

In the few months after the Carte Orange was introduced in 1975, the number of bus rides increased by 50% in the central zones. The increase of metro and train rides was much less spectacular and the effect on car trips was barely noticeable. The major effect was probably that instead of walking short distances, cardholders preferred to hop on off buses at no marginal cost. One of the effects of the program was a widening of the deficits of the public transit companies. To compensate for this deficit, the central government introduced the "Versement Transport", a tax on wages paid by employers, earmarked for public transport subsidies. In addition, employers in the Paris agglomeration are now required to reimburse half of the "Carte Orange" price to their employees who buy it.

 

Reference

United Nations for Human Settlement, 1995, Transport and Communications for Urban Development: Report of the Habitat II Global Workshop:177-178, Singapore.

All together, employers in the Paris region bear about 35% of the public transport costs. However, the Paris "Carte Orange" does not entice transit riders to travel off-peak.

Performance

In the few months after the Carte Orange was introduced in 1975, the number of bus rides increased by 50% in the central zones. The increase of metro and train rides was much less spectacular and the effect on car trips was barely noticeable. The major effect was probably that instead of walking short distances, cardholders preferred to hop on off buses at no marginal cost. One of the effects of the program was a widening of the deficits of the public transit companies. To compensate for this deficit, the central government introduced the "Versement Transport", a tax on wages paid by employers, earmarked for public transport subsidies. In addition, employers in the Paris agglomeration are now required to reimburse half of the "Carte Orange" price to their employees who buy it.

Reference

United Nations for Human Settlement, 1995, Transport and Communications for Urban Development: Report of the Habitat II Global Workshop:177-178, Singapore.

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