The looming crisis in French public transit

The purpose of this paper is to present the problems of French public transit, facing a funding crisis. The prominent features of the French transit are presented. First, we describe the complex and opaque bidding process which is for the entire network. Then we evoke a payroll tax especially devoted to the transit and underline the fact that the system is heavily subsidised. As competing for the entire network might find its rationale in the scale and scope economies, we test some very simple models devoted to this issue. We found no evidence of economies of scale for bus networks. This, given the funding crisis of transit authorities, leads us to recommend a gradual reform of French transit competitive tendering process. This reform should lead to a slowdown in the upward trend of transit employee's salaries. Some smaller parts of the networks would be submitted to bidding processes. The contracts might be improved as well.