Commercial Applications
A government-owned public transport company and a privately-owned cab service both aim to provide affordable transportation in a city. Which type of organisation would be better for ensuring affordable and accessible transportation, and why?
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Answer
A government-owned public transport company would be better for ensuring affordable and accessible transportation. The reasons are:
Service Motive — The primary objective of a public sector undertaking is to render service to the public at large, not profit maximisation. This allows it to keep fares low and affordable for the common people.
Wider Coverage — Government-owned transport companies serve all routes, including loss-making rural and remote routes, ensuring accessibility for everyone, not just profitable areas.
Subsidised Fares — The government can subsidise public transport, offering concessions to students, senior citizens, and daily commuters.
Public Accountability — Since public enterprises are answerable to the public through Parliament, fares and services are designed keeping public welfare in mind.
A privately-owned cab service, in contrast, focuses on profit maximisation.
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