Franchise Mechanism Implemented On Public Passenger Transport Route During Chinese Urbanization

This paper discussed the franchise mechanism implemented on public passenger transport route. Based on Hong Kong paradigm and Quanzhou reform, we tried to establish and optimize a franchise mechanism accommodated to Chinese urbanization process, and then make it to keep a proper balance between urban and rural development by adjusting production agents' mobility and reducing social transaction cost.This paper analyzed the deficits of public monopoly mechanism and discussed the comparative advantage of franchise mechanism, and then argued that the reform should be a contracting process to the franchising rights. Based on Hong Kong paradigm and Quanzhou reform, we advanced that an optimized reform path should be regulated by market framework, business opportunity and contract management, and when market competition have been organically combined with corporate governance and government regulation, the market framework would be well-formed. On the market framework topic, we focused on price regulation, competition regulation and service regulation, and the franchising risks else. We considered that the price regulation is the core principle of regulation policies, and an effective regulative price should be based on the cost subadditivity of the franchise mechanism implemented on public passenger transport route during Chinese urbanization process.This paper held that the following five principles comprise the franchise mechanism implemented on public passenger transport route during Chinese urbanization process:(1)the key is how to generate, obtain, maintain, exercise, transfer and/or terminate the franchise rights, (2)the condition is whether the franchising rights can generate business opportunities, and they can generate, obtain, maintain, exercise, transfer and terminate in a wholesome market framework, (3)the path should be regulated by market framework, business opportunity and contract management, (4)the groundwork is to adopt effective regulative policies to standardized the contracting process of the franchise rights, and (5) the safeguard is to set up secure mechanism.We put forward three following innovative viewpoints: (1) the road-using right, service-supplying right and deal—monopolizing right comprise the franchise rights of public passenger transport route, which determines that the franchising contract should be a administrative contract substantially,(2)when market competition have been organically combined with corporate governance and government regulation, a market framework of franchise mechanism would be well-formed, and (3) an optimized reform path should be regulated by market framework, business opportunity and contract management.