A good fare system is the result of a complex set of decisions made by the actors involved in public transport provision. New BRT systems provide a unique opportunity to correct distortions from past fare systems and to provide good incentives for operators and users alike going into the future. This chapter argues that understanding the economic principles of fare setting must be the starting point for determining the level and type of fare implemented but that this must be tempered by other considerations, principally the way in which costs may vary across the day, the impact of full capacity, the way in which the fare structure affects urban form and importantly the way in which fares can enhance and detract from the equity for the inhabitants of a city. This chapter provides the theory, shows how it can be applied in a case study and discusses the policy implications.
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