Question

We understand that transport is derived demand, based on this, justify (with real world examples) why transport economists need to be aware of what is happening in other academic disciplines.

Currently in Zambia, private operators are allowed to provide certain modes of transport. However, some may argue that government should be the only provider of certain modes of transport. Based on this, highlighting both the benefits and the disadvantages of having government being the sole provider of the various mode of transport. Use Zambian examples to justify your answers.

Answer 1

Transport is a derived demand. The demand of transport depends on the growth of the other sectors. For instance, if there is a high demand of cars in the country, the manufacturers require more transportation assistance to supply the cars from the point of manufacturing to the sale point. Thus the demand of transport also increases.

Government should be the only provider of certain modes of transport:

Benefits

Public transport is mainly utililized by lower class and middle class population. Thus it has to be economical. If the public transport is totally under the control of government, it would be reasonably priced.

Moreover, taking license and starting with the own transportation is quite lengthy process and thus poses a barrier to the entry of many players.

Disadvantages

The quality level of services would be quite unsatisfactory if government would be the only provider.

As the supply not able to match the required demand, so there would be overcrowding and the services provided would also be affected negatively.