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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:

  1. 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.

  2. Wider Coverage — Government-owned transport companies serve all routes, including loss-making rural and remote routes, ensuring accessibility for everyone, not just profitable areas.

  3. Subsidised Fares — The government can subsidise public transport, offering concessions to students, senior citizens, and daily commuters.

  4. 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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