In both western and eastern countries, the publicly-owned bus
sector that provides local transportation is plagued by problems
such as operating deficits, inefficient operation and management,
and the budgetary constraints of expanding subsidies; these issues
have attracted considerable attention among researchers. While
publicly-owned municipal bus (hereafter public bus) companies
operate in a number of cities in Japan, there are also many privately
owned bus companies (hereafter private bus operators) that
provide adequate local bus services and play an important role in
providing transport facilities in their areas1. When compared to
private bus companies, public bus companies are criticised for their
inefficiency and high-cost structures.