Deregulation of urban transport in Chile: what have we learned in the decade 1979–1989?

Urban bus operation in Chile is totally deregulated. This is the only example in the world where access to the urban bus transport market is totally free, and where the government does not exercise any control over the fares. This policy has been implemented progressively since 1979. Ten years later, it is possible to draw some conclusions from the experience. To summarize these conclusions, one could say that (i) the impact of deregulation has been almost exactly the opposite of what was expected: fares have risen and the diversity of services has been reduced, (ii) the reasons for this discrepancy lie less in the action of a cartel than in the specifics of urban transport supply and (iii) there is probably more to be expected from a refined deregulation policy, taking into account these specifics, than from a drive back to the traditional regulation system.