Market Failure in UK Public Transport

Abstract

The performance of the UK’s public transport system has become a growing concern, as rising fares, unreliable services, and unequal access increasingly affect both economic efficiency and social fairness. These issues make it important to study how market forces in the transport sector may not be working properly. This report focuses on the main forms of market failure in the UK, including monopoly power in rail services, reduced bus provision in rural areas, and environmental costs that are not fully priced into transport choices. Using basic economic ideas such as monopoly behaviour, externalities, and information problems, the report reviews government statistics, academic research, and recent industry data to explain why these failures continue. The findings show that high fares, poor performance, and unequal transport access are linked to long-standing structural problems. The report concludes that the UK needs both short-term protections for passengers and long-term reforms that improve oversight and support low-carbon transport.