Supply and pricing strategies of informal rural transport providers

Abstract

Informal paratransit operators using a range of vehicle types (including pickup trucks, small buses, and motorcycles) are a major provider of mobility in rural areas of the developing world. The paper describes a mixed method approach used to examine such operators’ decisions about vehicle deployment, route frequency, network organisation, and pricing in three rural districts in South Africa. New evidence is presented showing that the condition of rural roads (both paved and unpaved) affects the quantity and quality of public transport services provided, as well as the fares charged to passengers. This strengthens the case for judicious infrastructure investment as a way of improving rural access and livelihoods, and suggests how this might happen by way of leveraging better private sector responses. We also describe the emergence of a differentiated service hierarchy involving a variety of vehicle types suited to different operating conditions, and based on intentional coordination among operators of minibus and pickup truck (‘bakkie’) services. We argue that governments should promote such coordination and innovation in rural transport markets.