Who Pays What for Urban Mobility? From funding policy design to long-term financial sustainability
Cities across the Global South are expanding rapidly, and so is travel demand. Yet one question continues to complicate even well-designed mobility plans: who pays what, through which mechanisms, and with what predictability over time.
MobiliseYourCity’s “Who Pays What for Urban Mobility?” responds to this challenge through a two-volume structure that reflects how financing decisions unfold in practice. Volume I supports decision-makers in designing an urban mobility funding policy that is coherent with local objectives, institutional arrangements, and fiscal reality. Volume II builds on that foundation to explore how cities can increase resources and optimise financial needs so that mobility systems remain financially sustainable year after year.
This edition is the third in a series of widely used reference publications originally developed by AFD and CODATU. It builds on earlier editions published in 2009 and 2014, titled Who pays what for urban transport? Handbook of good practices, and was updated with AFD’s support to better reflect current circumstances. A key evolution is the shift in scope and title from “urban transport” to “urban mobility.” This reflects a broader change of paradigm, moving from a focus mainly on networks and modes to a more integrated approach that considers access, user needs and inclusion, with clear implications for how responsibilities, beneficiaries and funding choices are defined.
A core message across this new edition is that financing is not a technical footnote. Public transport almost everywhere operates with a viability gap: fare revenues alone do not cover the full costs of operation, maintenance, and renewal. Bridging this gap requires explicit choices about service levels, affordability, and the scale and purpose of public support. In many contexts, historical spending patterns have not favoured such coherence, often prioritising road infrastructure, while formal public transport funding remains volatile and paratransit receives limited support. These patterns also have equity implications, including gendered effects when mobility needs are unevenly served. Treating “who pays what” as a policy question is therefore essential, because financing shapes what gets built, who can access services, and whether systems can be maintained and improved over time.
The first step is to design a funding policy that can actually be implemented. Volume I frames financing as a sequence of decisions rather than a search for isolated instruments. It proposes three guiding questions:
- what funding is already allocated to the sector and for how long?
- which institutional arrangements and instruments exist to channel or subsidise resources?
- what additional funding sources could realistically be mobilized?
It then structures the resource landscape by distinguishing between direct beneficiaries, indirect beneficiaries, and public budgets, an approach that helps clarify who benefits, who contributes, and where gaps or inconsistencies may be emerging.
This framing matters because public transport policy involves unavoidable trade-offs. Volume I proposes a practical triangle to make these tensions explicit: affordability for users, supply density (the quality and quantity of service), and budgetary sustainability for public authorities. Increasing supply or lowering fares is rarely feasible without additional subsidies or measurable improvements in efficiency. Making those constraints visible early helps avoid strategies that look attractive on paper but become financially fragile during implementation.
Fare policy is treated in the publication as a strategic instrument rather than a purely pricing decision. It connects social inclusion and affordability to economic efficiency and environmental objectives, and it shapes both financial performance and equity outcomes. The publication highlights that fare structures can have distributional effects, including for groups with distinct mobility patterns such as women, children, and people with reduced mobility, and that fare decisions often interact with broader demand management measures affecting private motorised modes.
Once a coherent funding policy is in place, the second step is to strengthen financial sustainability of the mobility system over time. Volume II begins by clarifying terms: funding refers to the money available to pay for mobility, whereas financing relates to how expenditures and revenues are balanced over time, potentially using repayable instruments. From there, it maps a wide spectrum of potential funding and financing mechanisms relevant to urban mobility investments and operations, and stresses that defining the “right mix” must begin with robust analysis, particularly to avoid underestimating future maintenance needs or overestimating investment requirements relative to demand, both of which can increase long-term reliance on public support.
Volume II then structures action around three levers that can reduce financial pressure and improve long-term viability. The first lever is to improve financial performance through efficiency, linking overall performance to cost-efficiency, commercial efficiency, and the average effective tariff, and translating these relationships into practical operational directions. The second lever is to leverage private financing responsibly, including through public-private partnerships, while emphasising the importance of institutional capacity, legal robustness, and clear risk allocation, and noting how contractual frameworks influence whether authorities can capture efficiency gains. The third lever is to reduce financing costs through additional mechanisms, including climate-related finance, which can improve project viability under the right conditions.
Taken together, the two volumes support a disciplined pathway: define objectives that match governance and fiscal realities; clarify responsibilities and funding logic across beneficiaries and public budgets; acknowledge the affordability–service–budget trade-offs; and then strengthen long-term sustainability by improving performance, structuring financing carefully, and lowering financing costs where relevant. The key contribution is methodological: rather than multiplying tools, it helps cities align policy objectives, institutional capacity, and operational performance, so that financing decisions are coherent, transparent, and durable.
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