In Japan, local public transport operators have traditionally been
required to independently balance their revenue costs, although
exceptions have been made in special cases. Thus, the national
government policy still considers public transportation to be ‘selfsupporting’
or running ‘full-cost’. However, in reality, most local
public bus companies cannot cover their total costs by depending
only on passenger revenues, including fare compensation for the
concessionary fare system. Therefore, local governments have set up
several special subsidy programmes from the general account, but in
many cases, the final amount transfer for this subsidy depends solely
on the discretion of the local government. Thus, these subsidy programmes
have been exposed to public criticism; they are viewed as
the cause of inefficiency in public bus transport systems. In recent
years, many local governments and public bus companies have
sought to reorganise their supply systems (i.e., their organisational
form) with the aim of addressing the ruinous financial imbalance
faced by the Japanese public bus sector. Moreover, some public bus
companies have taken the drastic step of discontinuing their operations
and transferring their entire service to a privatecompany; this
process is often referred to as privatisation.