Firms providing urban bus transport services in Spain have traditionally been protected against competition. Whether publicly or privately owned, bus companies work within frameworks of legal monopolies with long tenure periods and public financing of deficits. There are no differences in the type of franchises if the incumbent firm is public or private, since these franchises are regulated by a state law applicable to all city councils. The choice of public/private provision of the service depends on the city councils' preferences. Although it is generally accepted that urban public transport is an industry which requires regulation, for efficiency and equity reasons, a framework like this provides few incentives to companies to minimise costs and provide a quality service to public transport users.
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