Community Development and Local Public Transportation Systems
Shunsuke Kimura
Professor, Faculty of Law, Graduate School of Law, Hitotsubashi University

I

Introduction
The term public transportation is generally used to mean “common carriers (businesses thatoffer their services to all people who request transportation)”1, and local public transportation
systems indicate buses and other means of public transportation provided for the daily movement ofpeople within a region.
Local public transportation systems are an important area of local administration and it can besaid that it is gaining further importance in recent years. Then, why are local governments getting
involved in local public transportation systems? The reason has to do with the idea of “livelihood
support.” It is essential for residents in leading their daily lives related to food, clothing and shelter,
to move, including going shopping, medical care facilities and educational facilities. Particularly,
for people who have difficulty in traveling by private vehicles (hereinafter referred to as “people
with limited mobility”), local public transportation systems, such as vehicles and other means oftransportation, are an essential element in their lives as residents. For these reasons, in order to
respond to the administrative demand to secure the “means of transportation for livelihood,” local
governments have, to date, played a part in local public transportation systems as a basic
administration service to support residents’ livelihood.
It should be noted here that focusing on the vehicle transportation business, private bus
operators account for the bulk (98%) of vehicle transportation operators in Japan because they canbe operated with smaller capital investment than the railway business (Figure 13 shown below).
However, the environment surrounding the bus business has changed significantly, such as
markedly less use of buses associated with the rise of motorization since the 1970s, private bus
operators’ withdrawals from unprofitable routes triggered by deregulation in 2002, and the rapid
decrease in the population particularly from 2010. Thus, bus operators, regardless of whether they
are under private or public management, have faced considerably severe conditions in terms of
profitability, and the public sector is required to secure the supply of bus transportation in some way.
Furthermore, facilities necessary for people’s livelihood, such as medical facilities, commercial
facilities and educational facilities, have become interspersed, while there has been a remarkable1

Kenzo Takeuchi, Kotsu Keizaigaku Nyumon (An Introduction to Transportation Economics),
Yuhikaku Publishing, 2008, p. 37.
1increase in the number of people with limited mobility who do not use owner-driven vehicles inassociation with the progress in the super-aging of the Japanese population. This transformation of
the social conditions has brought change to the conventional structure of local communities,
resulting in the phenomena of local communities being diluted around the country. Under thesecircumstances of local communities, the role of local governments as the provider of local public
transportation systems, the means of transportation that supports local residents’ livelihood, isgaining further importance (Figure 1).
Diluted local communities

Shared bus business: Declining profitability
Local public transportation systems

Interspersion of livelihood-related facilities:(Medical care, commercial and educational
facilities, and such)

Local governments

Rise in people with limited mobility:
Super-aging of population<Figure 1> The Situation Surrounding Local Public Transportation Systems
Source: Created by the author

This paper discusses the characteristics of local public transportation systems described above
and then deals with the relationship between today’s community development and local public
transportation systems.

II

The Decline in Japan’s Population and Community Development
The total population of Japan had been on an unalterable uptrend through the postwar first baby

boom (the 1940s) and the second baby boom (the 1970s), but it has been on a sharp decline after
peaking at 128.08 million in 2008. According to the Population Projections for Japan by the
National Institute of Population and Social Security Research (IPSS), the medium fertility variant
projection assuming the total fertility rate (TFR) is approximately 1.35 shows that the Japanese
population will fall below 100 million in 2050 and decline further below 50 million by 2100
(Figure 2).

2

(Unit: 10,000 persons)(2000)
126.93 million

The peak of 128.10 million in
December 2008
The population aging rate 22.1%

2030
116.62 million
The population aging rate
31.6%

(1945)
71.99 million
End of World War II(1603)(1338)
12.27(1192)
8.18
million
7.57
millionmillionEstablishm Establishme
Establishm ent of the nt of the Edo
ent of the Muromachi Shogunate
Kamakura Shogunate
Shogunate(1868)
33.30
million
Meiji
Restoration(1716-1745)
31.28 million
Kyoho Reforms

2050
97.08 million
The population aging rate 38.8%

2100(High-fertility projection)
64.85 million
2100(Medium-fertility projection)
49.59 million
The population aging rate 41.1%
2100 (Low-fertility projection)
37.95 million(Year)<Figure 2> Population Projections for Japan
Source: The Interim Summary of the “Long-Term Vision for National Land” (February 21, 2011, Long-Term
Forecast Study Group, Policy Subcommittee, National Land Council)

There is also a forecast that due to the impact of the rapid population decline, 20% of inhabitedareas will become uninhabited by 2050 (Figure 3).

3Lower Density and Uneven Distribution of Population○ About 20% of currently inhabited areas will become uninhabited by 2050.
○ Looking at Japan by “spots with an area of 1km2 each,” the population will be halved in over 60% of currently inhabitedareas[Population increase/decrease in 2050 against 100 for 2010]

No. of spots by the rate of increase/decrease of population
The population will decrease to half or less of the current levels in over 60% (63%) of spots
Become uninhabited Decrease by 50% or more Decrease by 0% or more to less than 50%

Increase2%
20% of inhabited areas becoming uninhabited
The rate of decrease of population in cities, wards, towns and villages by population size
Legend: Ratio compared with 2010
Decrease by 50% or more(including areas becoming uninhabited)
Decrease by 0% toless than 50%
Increase

20% of inhabited areas becoming uninhabited
Population size of cities,
wards, towns and villages
The national average rateof decrease about 24%<Figure 3> Forecast for Uninhabited Areas
Source: 1st Meeting of the Subcommittee of Experts, 31st Local Government System Research Council (May 28,
2014)

Under these circumstances, areas with no public transportation services within inhabitableareas (outside a range of 600 meters from bus stops and outside a range of one kilometer fromrailway stations) reached 36,433 km2, an area equal to Kyushu Island. In addition, the inhabitation
ratio in the areas with no public transportation services was higher for the elderly at 2.7% than for
the total population at 1.9% (Table 1).

4

<Table 1> Areas with No Public Transportation Services
Areas with no public transportation services
Japan(Total area 377,915 km2)

(Outside a range of 600 meters from bus stops
and outside a range of one kilometer from

Ratio of areas with no public
transportation services

railway stations)30.9%
Inhabitable area

117,600 km2

36,433 km2(9.6%)

127,768,000

2,423,000(1,086/km2)(67/km2)

27,470,000

731,000

Population

Elderly population

1.9%

2.7%

Source: Materials provided by the Ministry of Land, Infrastructure, Transport and Tourism (January 2013)

Next, looking at developments in metropolitan areas and local cities, for densely inhabited
districts (hereinafter referred to as “DIDs”) where urban areas are deemed to have been formed, theDID population continued to increase gradually in the three major metropolitan areas (Tokyo,
Osaka, and Nagoya) but the DID area has expanded faster than the DID population, and as a result,the population density has been on the decline. In local cities, on the other hand, the DID
population has been largely flat, but as the DID area expanded, the population density dropped
significantly (Figure 4).

5

Three Metropolitan Areas: DID Population Density (persons/km2)

Local Cities:
DID Population
Density (persons/km2)

Three Metropolitan Areas: DID Area
(km2)

Three Metropolitan Areas: DID Population(10,000 persons)

Local Cities: Area (km2)

Local Cities: DID Population (10,000 persons)<Figure 4> DID Trends in the Three Metropolitan Areas and Local Cities
Source: Mitsuhiko Kawakami, Chiho Toshi no Saisei Senryaku (Local City Revival Strategy), 2013, p. 13.

Moreover, as shown in Figure 5, looking at developments in major local cities, while the area
has tended to expand or stay flat in each city since 1980, the population has dropped or stayed
broadly flat in all cities except for Sendai City, Hamamatsu City and some other cities.

6

Figure 8-5

Figure 8-6

Trends of DID Areas

Population within DIDs (Index
against 100 for 1980)

Figure 8-7

DID Population Density (Index against
100 for 1980)

Hamamatsu City

Hamamatsu City

Hamamatsu City
Kitakyushu City

Kitakyushu City

Sendai City

Sendai City

Aomori City

Aomori City

Kitakyushu City
Sendai City
Aomori City
Toyama City

Toyama City

Toyohashi City

Toyohashi City

Toyama City
Toyohashi City
Nagaoka City

Nagaoka City

Sasebo City

Sasebo City

Tsuruoka City

Tsuruoka City

Nagaoka City
Sasebo City
Tsuruoka City
Iida City

Iida City

Ayabe City

Ayabe City

Iida City
Ayabe City

(Year)(Year)

Source: Created based on“Population Census” Ministryof Internal Affairs andCommunications(Year)

Definition of Densely-Inhabited District (DID): A DID is an urban district set under a certain criterion based on statistical data. Using the
Population Census basic unit block and, when there are multiple survey blocks in the same basic unit block, the survey block (hereinafterreferred to as “basic unit blocks, and such”) as the basic unit, the “densely-inhabited district” is the district where 1) the basic unit blocks,
and such with the population density of 4,000 or more per 1km2, in principle, adjoin each other within the boundary of cities, wards, towns
and villages, and 2) the population of the adjoining districts stands at 5,000 or more at the time of the Population Census.

<Figure 5> Trends of Densely-Inhabited Districts (DIDs)
Source: Development Bank of Japan, Jinko Gensho Mondai Kenkyukai Saishu Hokokusho (the Final Report of theStudy Group on the Population Decline Problem), 2014, p. 49.

Consequently, the population density has declined markedly in all cities other than Hamamatsu
City and Toyohashi City. With the Japanese population likely to continue to decline further going
forward, the DID population density is expected to decrease further unless policy measures aretaken to contract the DIDs. The decline in DID population density would give rise to concerns overthe decline of convenience in social and livelihood activities, the decrease in regional dynamism
and amplified inefficiency of administrative investment.
Local public transportation systems find themselves essentially in the same situation as above.
From the beginning, urban areas of local cities expanded in thinly-populated areas with
underdeveloped public transportation. If the population density there declines further on top of thatsituation, there are concerns that it would become all the more difficult to secure means oftransportation in such regions. Therefore, particularly in local cities, it has become a pressing issue
to realize an intensive urban structure by maintaining the constant population density and deploying
the urban functions of medical care, welfare, educational, commercial and other facilities in aplanned manner in order to provide residents with healthy and comfortable livelihood, maintaineconomic activities and ensure sustainable city management.
Amid these major changes in social circumstances, the community development and local
public transportation systems require a comprehensive review across Japan. As the direction of that7

review, the following two points can be pointed out broadly.
The first is the “restructuring of local public transportation systems corresponding to thecompactification.” As the decline in the DID population density pushes up the cost of maintaining
and upgrading the urban foundation, the compactification of cities (the downsizing of cities) is
required. Today, in line with this thinking, various cities are striving to develop the compact
communities, as represented by efforts by Aomori City and Toyama City. Meanwhile, local public
transportation systems, regardless of whether they are motor vehicle or rail transportation systems,
were previously required to cover the service area comprehensively and very frequently, inevitably
resulting in long and complex routes. However, a revision of ideas is required to respond to theformation of compact urban districts, and it is necessary to clearly distinguish between trunk line
routes going direct to major facilities (for example bus routes that connect to major railway stations,light rail transit (hereinafter referred to as “LRT”) and so on) and feeder routes (branch lines)
making connections to these trunk line routes. In other words, the most important requirement fortrunk line routes is to secure on-time runs and operate vehicles efficiently. On the other hand, forfeeder routes with the purposes of connecting to trunk lines and moving to neighboring districts, therequirement would be to operate the transportation service with high frequency over the shortdistances from suburban residential areas to facilities for livelihood convenience and trunk line
railway stations. In addition, in providing the public transportation services, it is extremely
important to organize timetables that enable smooth connections between trunk line and feeder
routes (Figure 6).

Inner

Mid

Outer
Trunk line routes

Feeder routes<Figure 6> Restructuring of Local Public Transportation Systems Corresponding to the Compactification
Source: Created by the author

8In this way, nowadays route management strategy of local public transportation systems ischanged significantly (Figure 7).

Long andcomplicatedroutes(1) Direct skeleton/trunk line routes
Secure on-time runs
Operate vehicles efficiently(2) Connecting feeder routes
Short-distance runs between suburban residential
areas and facilities for livelihood convenience<Figure 7> Route Management Strategy of Local Public Transportation Systems
Source: Created by the author

The second direction that can be pointed out is the “restructuring of local public transportation
systems corresponding to wide-area partnership.” As shown in Figure 1, with livelihood-related
facilities becoming interspersed in tandem with the shrinking population and the number of people
with limited mobility, such as the elderly, increasing, the situation is under way where a number of
local governments (in particular, the core city in an area and peripheral cities) must form
partnerships to provide administrative services. Against this background, there is the pattern tosustain the operation of local public transportation systems with a number of local governments
providing assistance, for example, the sustaining of trunk line route bus services under partnershipagreements based on the concept of Autonomous Settlement Zones.

9Core city

Railway station

High
High school
schoolShopping mallTrunk line routes

Hospital

Peripheral cities<Figure 8> Restructuring of Local Public Transportation Systems Corresponding to Wide-Area Partnership
Source: Created by the author

As seen above, in a diluted society where the compactification of cities and the interspersion of
livelihood-related facilities become pronounced, the management approach to local public
transportation systems is also required to change significantly.

10

III Framework of Legal Systems Related to Local Public Transportation Systems
1. Trends of Legal Systems
Since it is necessary to take heed of legal systems related to local public transportation systems
in considering the relationship between community development and local public transportation
systems, this chapter gives an overview of the institutional framework for local public
transportation systems in Japan.
The trends of legal systems related to local public transportation systems in recent years areshown in Table 2.

<Table 2> Trends of Main Legal Systems Related to Local public transportation systems
Time

Trends of Main Legal Systems

February 2000

Deregulation of chartered bus business (the Road Transportation Act), domestic air transportation business(the Civil Aeronautics Act)

March 2000

Deregulation of domestic passenger railway business (the Railway Business Act)

October 2000

Deregulation of domestic passenger ship business (the Marine Transportation Act)

February 2002

Deregulation of bus business, taxi business (the Road Transportation Act)

October 2006

Establishment of the registration system for personal-use paid passenger transportation(the Road Transportation Act)

October 2007

Enforcement of the Act on Revitalization and Rehabilitation of Local Public Transportation Systems

December 2013

Enforcement of the Basic Act on Transportation Policy

December 2014

Enforcement of the amended Act on Revitalization and Rehabilitation of Local Public Transportation
Systems

Source: Created by the author

2. Responses to Deregulation
Since the Road Transportation Act became effective in 1951, Japanese passenger vehicletransportation business has been maintained under the supply-demand adjustment regulation toprevent the degradation of services and safety through excessive competition on the basis of thelicense system for each route. However, the negative effects of the supply-demand adjustment
regulation have long been pointed out, including (1) the preservation of inefficient business
operators, (2) the deterrence of new services and the flexible setting of fares, and (3) the weakeningof motivation for business operations by being saddled with money-losing routes under the weightof forced internal subsidization. Based on these problems, deregulation processes began for a11

variety of businesses, including chartered bus business and passenger railway business since 2000.
In 2002, the supply-demand adjustment regulation on bus business was lifted, and deregulation
measures were introduced, with the license system for the entry into the business replaced by thepermit system and the permit system for the exit from the business switched to the prior notification
system (Table 3).

<Table 3> Deregulation of Bus BusinessTime
Entry into the bus business

Exit from the bus businessPre-deregulation

Post-deregulation (since 2002)

License system

Permit system (applicable to bus business(applicable to each route)

operators)

Permit system

Prior notification system(Suspension/discontinuance of the(Notify the regional council six months prior tobusiness)

the exit from the business)

Fare/Charge

Approval system

Ceiling approval system
Notification system for changes made under theceiling

Business plan

Approval system: Operating plan

Approval system: Entry into a route
Notification system: Operating plan

Source: Created by the author

These changes of legal systems had significant impacts on local public transportation systems.
The entry of new business operators, as a direct impact, was limited, but as an indirect impact, thechanges have brought benefits to users, including enhanced services, such as reductions inminimum fares and fare discounts for making connections. With some cases of the transfer ofpublic transportation services to the private sector emerging, meanwhile, local public transportation
systems are facing severer management conditions amid growing competition with private bus
business operators. Under these circumstances, as seen in discussions about the division of roles
between the public and private sectors, the point of view is coming to the fore much stronger than
before in recent years that the work of providing direct services to residents should be turned overto the private sector (or should make use of the abilities of the private sector) as much as possible.
Moreover, with increasing competition in the wake of deregulation and fiscal woes of local
governments coming into the picture, pressures for a review of the business form and moves toward
restoring the sound management are growing stronger.

123. Partial Amendment of the Road Transportation Act
In 2006, the Road Transportation Act was partially amended in order to respond to diversified
demand of users in the road transportation sector, such as demand for community buses, sharedtaxis and municipal buses. The amendment gave the legal status to the shared transportation
business for promotion of the wider use of community buses, and such. It also established theregistration system to make possible fare-paying transportation services by private vehicles, such as
municipal buses. The amended act also stipulates that a local public transportation council(organized by heads of the local public bodies, automobile transportation operator, local residents
and passengers) established pursuant to the act, consults on fares and other matters.

4. Revitalization of Local Public Transportation Systems
In 2007, given that the conditions surrounding local public transportation systems grewincreasingly severe following the deregulation of entries into and exists from service routes, the Act
on Revitalization and Rehabilitation of Local Public Transportation Systems (hereinafter referred toas “the Revitalization Act”) was enacted. Based on the Revitalization Act, the municipalities canprepare a comprehensive cooperation plan for local public transportation systems, after
consultations with statutory councils comprising relevant public transportation operators, roadadministrators, public safety commissions and users, and such. Then, they submit the plan to the
Ministry of Land, Infrastructure, Transport and Tourism. Of public transportation businesses
positioned in the comprehensive cooperation plan certified by the ministry, preferential support
measures under relevant laws are taken for businesses that are expected to be given priorities.

5. The Basic Act on Transportation Policy
As the environment surrounding local public transportation systems grows increasingly severe,
it is necessary to support local public transportation businesses through partnership not only among
business operating entities but also between local residents, governments and business operators.
Partly against this background, the Basic Act on Transportation Policy was enacted in December
2013.
The Basic Act, under “the basic recognition that it is important to appropriately satisfy the basic
transportation demands of the people and other persons,” sets out the fundamental principles oftransportation policies, responsibilities of the state and local governments, responsibilities and rolesof transportation-related businesses and the public in cooperating with transportation policies, andcoordination and cooperation among relevant parties. The Basic Act further states that theGovernment must establish a basic plan on transportation policies, the Basic Plan on Transportation
13

Policy, which sets forth the basic direction of transportation policies, their targets and measures ontransportation that the Government shall implement (Figure 9).

<Figure 9> Outline of the Basic Plan on Transportation Policy
Source: Materials provided by the Ministry of Land, Infrastructure, Transport and Tourism

6. Partial Amendment of the Revitalization Act
Amid the declining population and the progression of the aging population and dwindlingbirthrate, there are concerns over the business contraction and service degradation due to the fallingnumber of passengers carried by public transportation systems particularly in rural regions. Since it
is important to enhance local public transportation systems to maintain the dynamism of local
communities under these circumstances, the Revitalization Act was partially amended in May 2014.
In the amended Revitalization Act, the comprehensive cooperation plan is transformed into a local
public transportation network formation plan, and cooperation with community development
policies is positioned as one of items in the formation plan. In addition, under the plan, a plan toimplement the reorganization of local public transportation systems can be prepared to set specificdetails of the surface restructuring of public transportation networks (for example, the review ofexisting routes and operating timetables and the introduction of new services), and the amendment
14

is designed to address the reorganization of public transportation systems and community
development in an integrated manner.
As seen above, legal systems related to local public transportation systems have undergone
major changes since the 2000s. The two significant characteristics of these changes are ① thelegal positioning of local governments has become clear-cut and important, and ② the linkage
between transportation policies and community development policies is called for in terms of legal
systems as well.
In this case, the function of coordination (coordination among relevant parties) and the functionof financial support local governments provide should not be expected unilaterally, and local
governments should not be considered to passively fulfill their responsibilities for transportation
policies. Instead, it should be considered that local governments are expected to make maximum
use of their planning function related to transportation networks and community development aswell as the coordination function to develop consensus among local residents, and play the role ofdrawing up a future map of local public transportation systems.

IV Development of Local Public Transportation Systems
This chapter takes up business operations of publicly-operated transportation businesses,
community buses and LRT, which have been playing an important role among business methods of
local public transportation systems.

1. Publicly-Operated Transportation Businesses(1) The current status of publicly-operated transportation businesses
Transportation businesses operated by local governments are called publicly-operated
transportation businesses. Japanese transportation businesses have been undertaken by private andpublic business operators, and publicly-operated transportation businesses have been playing animportant part in Japan’s local public transportation systems, beginning with streetcars in the laterstage of the Meiji period, and then bus businesses in the later stage of the Taisho period and subway
businesses in the early stage of the Showa period. An overview of the types and a breakdown ofoperations of publicly-operated transportation businesses are outlined below.

a.

Types of publicly-operated transportation businesses
Publicly-operated transportation businesses operated by local governments are broadlyclassified into law-applicable businesses operated with the application of the Local PublicEnterprise Act and non-law-applicable businesses to which the act is not applied. In the breakdown
15

by business segment, bus operations have the largest number of businesses, while urban
rapid-transit railways have the largest number of employees, followed by bus operations (Table 4,
Figure 10 and Figure 11).

<Table 4> Types of Publicly-Operated Transportation Businesses (FY2013)
Types of Publicly-Operated Transportation Businesses (Law-Applicable Businesses)
Law-applicable businesses
Number of businesses

Non-law-applicable businesses

Number of employees Number of businesses Number of employees

Buses

30

10200

-

-

Urban rapid-transit railways

9

15026

-

-

Street cars

5

510

-

-

Monorails

2

255

-

Ships

7

262

38

488

T otal

53

26253

38

488

-

Ships, 7, 13%
Monorails, 2, 4%Street cars, 5, 9%

Buses, 30, 57%

Urban rapid-transit
railways, 9, 17%<Figure 10> Breakdown of the Number of Businesses of Publicly-Operated Transportation Businesses(Law-applicable businesses: FY2013)
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

16

Ships, 262, 1%

Monorails, 255, 1%

Street cars, 510, 2%

Buses, 10,200, 39%

Urban rapid-transit
railways, 15,026, 57%<Figure 11> Number of employees (Law-applicable businesses: FY2013)
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

b. The current status of publicly-operated transportation businesses
Next, looking at the trends of the total number of employees of local public enterprises (the sumof law-applicable and non-law-applicable businesses) and the number of employees oftransportation businesses, both numbers of employees continue to drop slightly under the impact ofthe decline in the number of businesses. The number of employees of transportation businesses
totals about 26,000 in FY2012, with the composition ratio standing virtually constant at
approximately 7.7% in recent years. This shows that the number of employees of transportation
businesses is relatively large when compared with the small number of businesses (91 businesses),
and that transportation businesses occupy a major part among local public enterprises (Figure 12).

17

400,000
350,000
300,000

Number of Businesses

250,000
200,000
150,000
100,000
50,000
0

7.9%

7.9%

8.0%

2008

2009

2010

7.%

7.8%

7.7%

2011

2012

2013

Year
Transportation businesses

All businesses (excluding transportation businesses)<Figure 12> Trends of the Number of Public Enterprise Employees
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

(2) Vehicle transportation businesses (publicly-operated bus businesses)a. General discussions
Passenger vehicle transportation businesses operated by local governments and other public
entities under the Road Transportation Act (hereinafter referred to as "publicly-operated bus
businesses") play a major role in local public transportation systems. The specific breakdown
includes (1) "publicly-operated bus businesses," which are operated by local
governments as general shared passenger vehicle transportation businesses under
Article 4 of the Road Transportation Act (hereinafter referred to as "the Act") and as
law applicable businesses with the application of the Local Public Enterprise Act, (2)local independently-operated community buses, which local governments get involvedin their operations through local public transportation councils under Article 4 of theAct, (3) municipal community buses and (4) welfare buses, which are operated bymunicipalities with private vehicles under Article 78 of the Act. (Table 5 below). Thissection covers the status of publicly-operated bus businesses that have been playing the role of18

local public transportation systems in Japan since the 1920s.

b. Developments of publicly-operated bus businesses
Japan’s publicly-operated bus businesses commenced operations as the alternative means oftransportation until the restoration of streetcar services after the 1924 Great Kanto Earthquake.
Subsequently, their operating routes expanded in competition with private bus operators or throughacquisitions. Since the 1970s, however, the concentration of population on urban areas and the
spread of private cars created traffic jams that caused the decline in transportation efficiency andthe loss of punctuality, helping accelerate an alienation from bus services. Since the 1990s, manybus operators saw their earnings deteriorate further in the wake of the collapse of the bubble
economy. Since the 2000s in particular, some local governments discontinued publicly-operated
bus businesses, while others have been forced to downsize their businesses or faced otherwise
extremely severe operating conditions (Table 6).

<Table 6> Publicly-Operated Bus Businesses Turned Over to Private Operators (Since FY2000)

2003 Hakodate City
2004 Sapporo City
2005 Gifu City, Arao City
2006 Akita City
2007 ー2008 Mihara City
2009 ー2010 ー2011 ー2012 Tomakomai City, Akashi City, Kure City
2013 Naruto City
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

c.

The status of publicly-operated bus businesses in overall bus businesses
The number of publicly-operated bus businesses accounted for 30 businesses of the overall

number of 1,991 bus businesses as of FY2013, with the composition ratio of only 1.5% (Figure 13).

19

<Figure 13> Number of Private Bus Businesses and Publicly-Operated Bus Businesses (General Shared Vehicle
Transportation Businesses) (FY2013)
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

However, publicly-operated bus businesses had an annual kilometrage of 264 million
kilometers, or 5.8% of the overall total, and an annual passengers carried of 929 million, or 20.6%,
both with the large composition ratios relative to the number of businesses (Figure 14).

20

5,000

4,500

4,000

Annual Kilometrage, Passengers Carried

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Public and private vehicletransportation businesses
Publicly-operated
bus businesses

Kilometrage(2012, million km)

Kilometrage(2013, million km)

Passengers carried(2012, million
people)Passengers carried(2013, million
people)No. of vehicles(2012, 100 units)

No. of vehicles(2013, 100 units)

4,605

4,569

4,437

4,505

1,078

1,071

270

264

928

929

79

79

Item

<Figure 14> Status of Publicly-Operated Bus Businesses in the Overall Public and Private Bus Businesses (FY2012,2013)
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

While the number of publicly-operated bus businesses has continued to decline, two prefectures,nine government ordinance-designated municipalities, four municipalities hosting the prefectural
government offices and other entities operate publicly-operated bus businesses, all with therelatively large transportation capacity as bus operators, as seen in the annual number of passengers
carried.

d. Trends of the number of passengers carried
The number of passengers carried peaked out in FY1970 during Japan’s high growth period(1954-1973), and has been on the rapid and consistent decline since the 1970s as the Japanese
economy entered the period of stability and motorization progressed. The number of passengers
carried in recent years has been less than half of the 1970 level. Amid this overall trend, however,
the annual number of passengers carried in FY2013 reached 929 million, an increase of about 1
million over 928 million in the previous fiscal year (Figure 15).
21

<Figure 15> Trends of Passengers Carried of Publicly-Operated Bus Businesses
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

e.

Financial conditions
Looking at the trends of financial conditions of publicly-operated transportation businesses as awhole and publicly-operated bus businesses, the ratio of loss-making businesses was in the 20%
range for transportation businesses as a whole and in the 40% range for bus businesses,
underscoring particularly severe financial conditions for bus businesses. Moreover, as the numberof businesses declined, the number of loss-making businesses also decreased, with this trend
particularly conspicuous for bus businesses, pointing to the decreasing number of bus businesses
against the backdrop of deteriorating profitability (Figure 16).

22

80

60.0

75

70

69

68

65

70

69

50.0

50.0

48.4

42.9

43.3

42.9

40.0

38.9
50

40

30.0

35
35.0
31
30

31.3

28

28.9
20.0

22

22
20

20

18

25.0

23

21

22.7
20

18
15

14

15

Ratio of Loss-Making Busionesses (%)

Number of Profit-Making, Loss-Making Businesses

60

16

23.1

17
15
13

10.0

10

0

0.0
2008

2009

2010

2011

2012

Transportation Number of profit-making businesses

Transportation Number of loss-making businesses

Bus Number of loss-making businesses

Transportation Ratio of loss-making businesses

Bus Number of profit-making businesses

Bus Ratio of loss-making businesses

2013<Figure 16> Trends of the Number of Profit-Making and Loss-Making Transportation and Bus Businesses
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

Looking at the ratio of current income to current expenses, or the current account ratio, of
law-applicable enterprises, while the current account ratio of all businesses of public enterprises
stayed largely flat, the current account ratio for publicly-operated transportation businesses
increased in tandem with the drop in the number of businesses. In other words, this development
shows that the financial conditions of publicly-operated transportation businesses as a whole are
improving somewhat as a result of efforts to promote rehabilitation of transportation businesses,
including the discontinuance of such businesses (Figure 17).

23

140

120

120

100

100

80

60
60

Number of Businesses

Current Account Ratio (%)

80

40
40

20

20

0

0
1987

1989

1991

1993

1995

1997

Transportation Number of businesses

1999

2001

2003

2005

Transportation businesses

2007

2009

2011

2013

All businesses<Figure 17> Trends of the Current Account Ratio
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

Next, we look at trends of operating income and operating expenses of transportation businesses
and bus businesses. While total operating income always exceeds operating expenses fortransportation businesses, total operating expenses constantly exceed operating income for bus
businesses, indicating structurally tough income conditions for bus businesses. In addition,
particularly in bus businesses, as the number of businesses is gradually decreasing, operating
income continues to decline slightly and operating expenses are curbed by a larger percentage, theincome ratio (passenger transportation income/operating expenses) has been increasing since
FY2012 (88.1% in FY2013) (Figure 18, Figure 19).

24

70

16,00060

12,00050

10,000
40

8,000
30

Number of Businesses

Operating Income / Operating Expenses (Average per Operator, Millions of Yen)

14,000

6,000

20

4,000

10

2,000

0

0
2008

2009

2010

2011

2012

2013

Number of transportation businesses

Number of bus businesses

Transportation businesses Operating inocome (average)

Transportation businesses Operating expenses (average)

Bus businesses Operating income (average)

Bus businesses Operating expenses (average)<Figure 18> Relationship between Passenger Transportation Income and Operating Expenses in Publicly-Operated
Bus Businesses
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

90.0

250,000

86.0

150,000

84.0

82.0

100,000

80.0

50,000
78.0

76.0

0
2008

2009

Passenger transportation income

2010

2011

Operating expenses

2012

2013

Passenger transportation income/Operaing expenses (%)<Figure 19> Trends of Transportation Income and Operating Expenses in Publicly-Operated Bus Businesses

25

Ratio of income to expenses

Transportation income / Operating expenses (millions of yen)

88.0

200,000

Source: Created by the author based on Local Public Finance Bureau, Ministry of Internal Affairs andCommunications, ed., Chiho Koei Kigyo Nenkan (Local Public Enterprise Yearbook) (April 1, 2012-March 31,2013) Volume 60.

As shown above, the balance of income and expenses has been improving for publicly-operated bus
businesses as a whole as the number of businesses declined.

f.

Expenses
Looking at the breakdown of expenses for publicly-operated bus businesses, depreciation

expenses (8%) and interest paid (1%) were small as bus businesses do not require so large-scaleassets as urban rapid-transit railways, while salaries for employees accounted for over half (52%)
of the total expenses (Figure 20).

<Figure 20> Expenses of Publicly-Operated Bus Businesses (FY2012 Closing of Accounts)
Source: Created by the author based on Local Public Finance Bureau, Ministry of Internal Affairs andCommunications, ed., Chiho Koei Kigyo Nenkan (Local Public Enterprise Yearbook) (April 1, 2012-March 31,2013) Volume 60.

Thus, the formation of efficient organizational structures becomes an important factor in
26

financial management.

g. Money drawn
Funds paid out from general accounts to accounts for transportation businesses for the purposesof subsidization and/or loans are called money drawn. Comparison of money drawn between
transportation businesses as a whole and bus businesses shows that the ratio of total money drawn
to gross income for bus businesses, which do not require large-scale assets as do urban rapid-transit
railway businesses, is smaller than that for transportation businesses as a whole (10.3% for bus
businesses against 15.5% for transportation businesses as a whole in FY2013). However, as there
are many cases where bus businesses require subsidies for operating expenses, money drawn as
subsidies to current income is larger for bus businesses than for transportation businesses as awhole (9.2% for bus businesses against 6.2% for transportation businesses as a whole). As seen
above, bus businesses, while they are not businesses that rely on large-scale assets in operating, arebusinesses that require a high level of financial assistance for operating expenses on a current
account balance basis (Figure 21). In FY2013, the ratio of money drawn was lowered from theprevious fiscal year as the ratio of current income to gross income increased.

120.0

99.1

100.0

98.6

96.8

Ratio of Money Drawn (%)

80.0

60.0

40.0

21.2

20.0

15.5
7.1

14.1
10.1

6.2

9.2

10.3

0.0

Transportaion businesses as a whole

Bus busiensses

Transportation businesses as a whole and bus businesses (FY2012 and FY2013)
Money drawn (subsidies to current income)/Gross income (2012)

Total money drawn/Gross income (2012)

Current income/Gorss income (2012)

Total money drawn/Gross income (2013)

Current income/Gorss income (2012)

Current income/Gorss income (2013)

27

96.9

<Figure 21> Money Drawn for Transportation Businesses as a Whole and Bus Businesses
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

Looking at the status of money drawn in recent years, money drawn as subsidies to current
income has been held down since operating income (the average amount) has been increasing intandem with the reduction in the number of businesses (Figure 22).

28

6,000

37
36

5,000
35

33
3,000

32
2,246

2,121

31

2,088
1,827

2,000

1,712

1,573

Number of businesses

Money drawn/Operating income(average, millions of Yen)

34
4,000

30
29

1,000
28

0

27
2008

2009

2010

2011

2012

2013

Fiscal Yaer

Money drawn (subsidies to current income: Average)

Operating income (Average)

Number of businesses<Figure 22> Trends of Money Drawn for Transportation Businesses
Source: Japan Municipal Research Center ed., Jinko Gensho Jidai ni Okeru Chiiki Kokyo Kotsu no Arikata (The
Future of Local Public Transportation Systems in the Era of Declining Population), 2015.

As seen above, publicly-operated bus businesses, while keeping an important position inpassenger vehicle transportation businesses, remain in severe financial conditions due to thesignificant decrease in passengers carried in recent years and are striving to improve management
by reviewing their operations, including the discontinuation of businesses. In addition, since local
governments that operate bus businesses also find themselves in tight fiscal conditions, money
drawn as subsidies to current income has been held down in recent years, requiring
publicly-operated bus businesses to manage to stay profitable.

2. Community Buses(1) Appearance of community buses
Community buses are the means of transportation to secure transportation for communities in
the form of shared transportation or private vehicle transportation for on-time, fixed route
operations. There is no legal definition of community buses, but their characteristics can besummarized as follows:(1) Local governments are involved either directly or indirectly in the management of or29

funding for their operations;(2) They cover small-scale demand for transportation of communities that existing means oftransportation cannot cover sufficiently;(3) In many cases, fares are low and the source of funds are composed of fare revenues,
subsidies by public funds and beneficiary charges; and(4) They are granted

positions (evaluation, image) as the public-interest means oftransportation for communities.
Mini buses introduced by Hino City in 1986 can be cited as the representative example ofcommunity buses in the initial stage of introduction. Mini buses were launched on the round-trip
routes that cover the city offices, railway stations and residential areas, and attracted attention as themeans of transportation covering areas with no public transportation services previously.
Musashino City set the low and fixed fare of ¥100 for its "Mubus" introduced in 1995, and adopted
the system under which the municipal government creates an operational plan and a shortfall of
operating expenses of operators entrusted with bus operations is covered by public subsidies. This
formula spread to other municipalities as a different way of getting local governments involved inboth the planning and operations of public bus services than under a self-supporting system.
While the number of publicly-operated bus businesses has been on the gradual decline in recent
years, the number of community bus businesses (the number of routes served) has continued tosignificantly increase from 1,549 businesses in 2006 to 3,063 businesses in 2013 (Figure 23). The
number of municipalities where community buses are being operated has also increased
consistently from 1,130 in 2009 to 1,226 in 2013 (Figure 24).

30

3,000

40
2,738
39

2,564
39

2,390

2,500

38

2,207

37

1,549
1,500

36

36
36

1,000

35

35
35

500

34

0

33
2006

2007

2008

2009

2010

2011

Fiscal Years

Community bus businesses

Publicly-opeated bus businesses<Figure 23> Number of Publicly-Operated Bus Businesses (Law-Applicable) and Community Bus Businesses
Source: Created by the author based on materials of the Ministry of Land, Infrastructure, Transport and Tourism

31

Number of publicly operated bus

Number of community bus

38

1,963

2,000

Number ofbusinesses

Community bus businesses(Number of municipalities)
Community bus businesses(Number of routes)
Fiscal Year
Community bus businesses(Number of municipalities)

Community bus businesses(Number of routes)<Figure 24> Trends of Numbers of Municipalities and Routes Covered by Community Bus Businesses
Source: Created by the author based on materials of the Ministry of Land, Infrastructure, Transport and Tourism(2) Status under the Road Transportation Act
Under the Road Transportation Act, there are a number of ways to operate bus businesses inlocal communities. Prior to 2006, shared, chartered and private vehicle transportation forms were
employed. However, the following significant changes have occurred in the environment
surrounding local public transportation systems. Firstly, securing the means of transportation forlivelihood emerged as a serious issue for local communities, with the declining population and theprogress in deregulation prompting the withdrawals of route bus to create areas with no public
transportation services. Secondly, demand for individual transportation services, which are different
from route buses but have both punctuality (on-time operations in accordance with timetables) and
fixed routing (operations based on systems), has been rapidly increasing from people with limited
mobility, who find it difficult to use public transportation systems on their own due to the progressin the aging of population.
Under these circumstances, the following reviews were conducted under the partial amendmentof the Road Transportation Act in 2006.
(1) The scope of shared transportation businesses was expanded to include not only
regularly-operated route runs but also irregular bus services on fixed routes, such ascommunity buses, demand responsive transportation and shared taxis.
32

(2) An onerous passenger transportation system by private vehicles was created to pave theway for onerous transportation services by private automobiles operated by municipalities
and non-profit organizations (NPOs), and school buses and other means of transportationnecessary to ensure public welfare can be approved under the license system.
Bus businesses under the amended Road Transportation Act are first classified broadly intoshared businesses and private vehicle transportation businesses, and are further classified into thefour categories based on the form of operations: (1) publicly-operated bus businesses; (2) local
independently-operated community bus businesses; (3) bus businesses operated by municipalities
and NPOs pursuant to Item 2, Article 78 of the Road Transportation Act (hereinafter collectively
referred to as “municipal community buses”); and (4) bus businesses operated for the purpose of
securing public welfare pursuant to Item 2, Article 78 of the Road Transportation Act (hereinafterreferred to as “public welfare buses”) (Table 5).

<Table 5> Classification of Bus Businesses under the Road Transportation Act (post-2006 amendment)
Type
Nature of project

Road Transportation Act, Article 4
Shared businesses
Publicly-operated bus (in theform of public enterprise)
Independently operated by the
local government

Independently-operated
community bus

Road Transportation Act, Article 78
Private vehicles
Community buses operated
by municipalities(Item 2, Article 78)

Public welfare bus
Absolutely necessary to securepublic welfare (for the limitedareas and periods)(Item 3,
Article 78)
 Public welfare bus
 School bus
 Onerous transportation byvisiting nursing-care
workers

Operating entity(Specific project)

Local government

Community transportation
operating council, and suchBusiness operators, who
are council members,
operate community buses Municipalities or NPOs
 Onerous transportation
systems operated bymunicipalities(transportation incommunities lacking
means of transportation,
welfare transportation
by municipalities)
 Onerous transportationin sparsely-populatedareas Welfare onerous
transportation

Operator

Local government

Business operators approvedby the Minister of Land,
Infrastructure, Transport andTourism pursuant to Article 4of the Act

Municipalities and NPOs
registered with the Ministerof Land, Infrastructure,
Transport and Tourism

Fare regulations

Set ceilings on fares, to beapproved by the Minister ofLand, Infrastructure,
Transport and Tourism

When consensus exists
among relevant parties in thecommunity, the approvalsystem is eased to the priornotification system Operators set fares, present them to the public Within the limits of actual costs, and such Local public transportation councils
 Membership: local governments, district transport bureaus,
experts, users, community residents, volunteer groups,
relevant transportation operators, and such Agreement on the need for onerous private vehicletransportation, consideration, and such

Operators approved by the
Minister of Land, Infrastructure,
Transport and Tourism pursuant
to Item 3, Article 78 of the Act

Source: Created by the author

As shown by the continuing uptrend in the number of community bus service routes, thediversification of business forms is expected to advance in both fields of shared businesses andprivate vehicle transportation businesses going forward.

33

(3) Composition of funds
Transportation businesses operated by public enterprises are operated on a stand-alone basis inprinciple, and fees form the core of operating revenues (Figure 25). Internal cross subsidization
takes place, with profits of profit-making routes covering losses of loss-making routes, depending
on profitability of each route. But room for such subsidization is shrinking because of declining
profitability in recent years and the repeal of supply-demand adjustment regulations. As a result,trends in recent years of passenger transportation income and operating expenses ofpublicly-operated businesses show that the ratio of income to expenses stood at approximately 85%
in FY2012, indicating that these businesses are not yet self-supporting (forecited Figure 19).

Extraordinary gains, 3%

Other current
income , 1%

Subsidies fromother accounts, 9%Treasury(prefectural)subsidies , 0.9%
Other operating
income , 5%Passenger
transportation
income, 82%<Figure 25> Revenue Structure of Publicly-Operated Bus Businesses(The Whole of Japan: FY2012 Closing of Accounts)
Source: Created by the author based on materials provided by Utsunomiya CityThus, at present, publicly-operated bus businesses are trying to keep the balance between
income and expenses by receiving public subsidies from other accounts of the national or local
34

governments in the form of financial aid for covering losses from money-losing routes or expenses
to purchase vehicles.

<Figure 26> Revenue Structure of Community Bus Businesses (Utsunomiya City: FY2013 Closing of Accounts)
Source: Created by the author based on materials provided by Utsunomiya City

<Figure 27> Model Composition of Funds for Public Enterprises and Community Buses
Source: Created by the author35

In the case of community buses, on the other hand, the formula in increasing use is to position
assistance from community associations of areas where independently-operated community bus
services are operated and supported by corporations as revenue sources in the category of
beneficiary charges, and use them to seek the balance between income and expenses in combination
with fare revenue and subsidies from local governments (Figure 26 shows an example of
Utsunomiya City). Fares are considerations to be borne by users who receive the direct benefits ofriding on community buses to move around, while beneficiary charges are burdens to be borne byindividuals or corporations that receive the direct and indirect benefits from the means of mobility
secured and public subsidies mean amounts of burdens to be paid by taxpayers. The combination ofthese revenue sources of different nature is designed to cover expenses of local public
transportation services.
Figure 27 shows the composition of these revenue sources. As community buses have been
increasing significantly in the number of businesses (forecited Figure 23), for publicly-operated bus
businesses as a whole, not only businesses operated by public enterprises relying chiefly on farerevenues but also community bus businesses funded with fare revenues, beneficiary charges andpublic subsidies are increasing.
Then, what is the optimum combination of revenue sources for community bus businesses? As
many community bus businesses adopt low and fixed fares (¥100 for all routes, for example) at thediscretion of business operators, not based on the idea of total cost, the ratio of fare revenue tooperating income differs considerably for each business. Furthermore, the extent to which
beneficiary charges (assistance from community associations and support from corporations, andsuch) can be secured in operating revenues may be affected by social and economic circumstancesin each community far more than fare revenue.
Considering these factors, it is self-apparent that the combination of revenue sources is rather
diverse for each community and it is difficult to discuss the optimum combination of revenue
sources indiscriminately. However, it is necessary to consider it together with what benefits
individual publicly-operated bus businesses bring to communities they serve and to what extent
local governments and local residents participate in their management.

3. LRT(1) Overview
LRT (light rail transit) means the track-based transportation system that has remarkablecharacteristics in terms of the utilization of low-floor light rail vehicles (LRVs), easy boarding on
36

and exit from vehicles through improved tracks and stations, punctuality, swiftness and amenity.
Based on the streetcar technology, LRT is attracting attention as a new medium-capacity transportsystem between mass transport systems and buses by improving services with the introduction ofhigh-performance vehicles and exclusive track routes.
While the differences between LRT and streetcars are not necessarily clear in some respects,
their respective characteristic features are compared in Table 7.

<Table 7> Comparison between Streetcars and LRTStreetcars

Transportation route

Operational characteristics

LRT

Operated on city streets, competing against

Operated on city streets, but basically operated

public vehicles, in principle. Streetcars may beon exclusive tracks separated from ordinary

separated from other means of transportation byroads. LRT seeks efficient operations byreceiving preferential treatment or operating on

partially going underground or operating on

exclusive tracks.

elevated tracks.

Punctuality and scheduled speed are

It is possible to secure punctuality and highsignificantly affected by driving conditions

scheduled speed by operating on exclusive

along the lines.

tracks and using high-performance vehicles.
The frequency of runs can be higher thanstreetcars.

Scheduled speed of approximately 15 km/h,

Scheduled speed of approximately 25 km/h, andand highest speed of approximately 40-60

highest speed of approximately 70-80 km/h

km/h.

(Some LRT has a highest speed of 100-125Speedkm/h).

Vehicle formation

A vehicle has four to six axles and is 14 to 21

There are a variety of vehicles, with eachmeters long. The passenger capacity isvehicle having four to eight axles. Divided

approximately 100-180 people, 20-40% ofarticulate vehicles are 20 to 30 meters long. The

whom can sit on seats. The formation ispassenger capacity is approximately 110-250

basically one vehicle or two vehicles.

people, 20-50% of whom can sit on seats.

Source: Created by the author

Japan’s urban public transportation systems include railways, subways, urban monorails, newtransit systems, streetcars and route buses, with each of them playing its part in the public
transportation network. From the perspectives of maximum transportation capacity and scheduled
speed, however, there exists a territory (the transportation gap) that does not necessarily require the37development of urban monorails or new transit systems but cannot be covered by route buses orstreetcars either (Figure 28). LRT is counted on as the prospective new means of transportation thatcan fill the transportation gap.
Maximum transportation capacity (10,000/h, one way)

Subways

New transportation systems, and such
Transportation gap
existsStreetcars
Route buses
Approx.
10-15

Approx. 21-36
Approx. 27-43
Scheduled Speed (km/h)<Figure 28> Transportation Gap
Source: City and Regional Development Bureau, Ministry of Land, Infrastructure, Transport and Tourism, Machi
Zukuri to Ittai to Natta LRT Donyu Keikaku Gaidansu (Guidance for LRT Introduction Plan Integrated with
Community Development), October 2005 http://www.mlit.go.jp/crd/tosiko/guidance/pdf/00all.pdf)(2) Status of introduction
LRT is being utilized with many operators partially introducing LRT vehicles as part of theirstreetcar businesses. As of FY2012, out of 19 operators of streetcars in Japan, 13 operators haveintroduced LRT vehicles (Table 8).

38

<Table 8> Streetcar Operators and When They Introduced LRT Vehicles (As of FY2012)

Operator

Year of LRT Vehicle
Management Form
Introduction

Kumamoto City
Transportation Bureau
Tokyu Corp. Setagaya
Line
Hiroshima Electric
Railway
Hakodate City
Okayama ElectricTramway
Tosa Electric Railway
Iyo Railway
Kagoshima City
Transportation Bureau
Manyo Line
Nagasaki ElectricTramway
Toyohashi Railroad
Toyama Light Rail
Fukui Railway
Sapporo City
Transportation Bureau
Tokyo Metropolitan
Government Bureau ofTransportation Arakawa
Line
Toyama Chiho Railway
Keihan Electric Railway
Keifuku Electric Railroad
Hankai Tramway
Source: Created by the author

39

1997

Public1999

Private1999

Private2002

Public2002

Private2002
2002

PrivatePrivate2002

Public2004

Third Sector

2004

Private

2005
2006
2006

PrivateThird Sector
Privateー

PublicーPublicーーーー

PrivatePrivatePrivatePrivate(3) Characteristics of LRTThe following characteristics of LRT are drawing particular attention in urban transportation.
(1) Mainly operated on the road surface
As passengers can get on and off LRT from the road surface directly, it is easy to get on and off
and highly barrier-free (physically accessible). And as LRT can also operate on the road surface likeconventional streetcars, it is possible to cut back on construction costs compared with the newdevelopment of new transportation systems.
(2) Convenience that reflects new technology
Low-floor light rail vehicles have already been developed by substantially improving drawbacksof conventional streetcars and route buses such as “the difficulty in getting on and off due tohigh-floor entrances,” “too much noise” and “poor ride quality.” These vehicles are highly
responsive to universalization, making it possible to get on and off in wheelchairs and raising
in-vehicle mobility. In addition, enhanced power performance and the use of resilient wheels
improved the ride quality and realized lower vibrations and noise.
(3) Flexible choice of track space
It is possible to choose from a variety of tracks in accordance with the conditions of urban areas,
including partial multi-layerization, exclusive tracks separated from roads and through-services
with suburban railways by making use of the characteristic trait of operating on steel wheels.
(4) Possibility of link-up with community development
LRT with excellent universality contributes to generating the liveliness of communities as anenvironment-friendly means of mobility and as the symbol of community with creative designs ofvehicles and stations.
Given these characteristics, some cities are expected to newly introduce LRT as the means ofpublic transportation for new community development.

(4) Conforming elements for community development in LRT
For example, in Utsunomiya City mentioned above, Japan Railways (JR) and Tobu Railway
routes have been developed in the north-south direction, but no core railway tracks exist in theeast-west direction. While bus routes are concentrated on the central urban area to the west of thestation, an industrial park is located in the east. Such urban structure provide a backdrop for thedevelopment of a network-type compact city.
As seen above, diverse individual conditions exist behind the characteristics of each city. Given
the characteristics of LRT as the means of medium-capacity transportation, LRT is considered tohave the suitability for cities that have the following characteristics.
40

(1) There exists the potential pivot (transportation demand) that requires the new development ofcore transportation within a city (in the east-west direction, the north-south direction, and such);(2) As automobile-related problems, such as traffic jams, are becoming serious, a city places
importance on policies in favor of environmental amenity as well as policies oriented toward muchless dependence on private vehicles, such as improvement of the environment for bicycles andwalking;(3) There exists prospective demand for medium-capacity transportation, such as the existence ofa district of consumption above a certain level in the center of an urban area; and(4) Citizens have relatively strong positive feelings on the external appearance of transportation
facilities that is artistic, excellent in design and fit with the urban landscape.
In cities with these basic conditions, it is likely that demand for LRT as a means of transportation
can be found going forward.

<Column> LRT Plan of Utsunomiya City and Haga Town
Utsunomiya City, under its “network-based compact city” scheme, is working to commence
LRT operation in FY2016 by positioning it as the core public transportation system in the east-west
direction.
Together with LRT development, Utsunomiya City is also holding consultations with bus
business operators about the building of a network of public transportation systems to the east of JR
Utsunomiya Station by linking LRT, buses and other community transportation systems.

Priority development section

Routes for LRT introduction

Utsunomiya(Kinu street)
National highway
route No. 123

Overall plan section

New Kinu
BridgeHaga Town section

Utsunomiya-Motegi line
Haga industrial
park
Kiyoharadai
housing complex

JR UtsunomiyaUtsunomiyaMukada line
Station

Utsunomiya
Municipal
Government OfficeHaga-Takanezawa
industrial park

Utsunomiya
Technopolis
Center District

Kiyohara
industrial park

Tobu Railway
Utsunomiya Station

Yanagida
BridgeKinugawa River

Industrial
road

Main street

National
highway routeNo. 4

Tochigi Prefectural
Government Office

Itado Bridge
nationalNewhighway route No. 4

Hiraideindustrial park

Section under considerationfor extension in the future

Figure 37: Planned Routes for LRT Introduction (East-West Core Public Transportation)

The proposed network plan zone is “around Sakura Dori Jumonji – Tobu Railway Utsunomiya
41

Station – JR Utsunomiya Station – Utsunomiya Technopolis Center District (for a length of about
15 kilometers),” which links the city center to the west of JR Utsunomiya Station to industrial parks
and large-scale development districts on the left bank of Kinugawa River.

42

V Local Public Transportation Systems in Community Development
This chapter presents case examples where local public transportation systems are playing
unique roles in community development.

1. Local Public Transportation Systems in Compact Cities (Aomori City, Toyama City)(1) Aomori City
In Aomori City, the urban areas expanded in tandem with an increase in population, and theprogress of motorization and the increased number of suburban commercial facilities came on topof this, causing the diffusion of urban areas and the hollowing-out of the city center. For this reason,
Aomori City in 1999 adopted the “Aomori City Urban Master Plan,” centering around the ideas ofrestraining the disorderly expansion of urban areas and revitalizing the city center, and set forth the“formation of a compact city” as a guiding principle for next 20 years. As the basic idea of urban
structure to form the compact city, the Aomori City Urban Master Plan mapped out three areas of“Inner,” “Mid” and “Outer” in a circular pattern from the city center, set forth land utilizationlayout plans corresponding to the characteristics of each area, and designed to promote thecommunity development from the two perspectives of “restraints on the disorderly expansion ofurban areas” and “downtown renewal (revitalization of the city center).”43Compact City Development of Aomori City

Inner-City
Mid-City

Outer-City
Development Margin Line

Guiding Principles for Urban Development■Realization of “Compact City”■Set the direction of urban development into the inner
urban areas, a functional and efficient urban structure■Divide the city into three areas, promote the urban
structure corresponding to the characteristics of each area

Inner-City
Mid-City
Outer-City<Figure 29> Compact City Development of Aomori City
Source: Aomori City Council on Comprehensive Urban Transportation and Aomori City, Aomori-shi Sogo Toshi
Kotsu Senryaku (Aomori City Comprehensive Urban Transportation Strategy)/Aomori-shi Chiiki Kotsu Sogo Renkei
Keikaku (Aomori City Comprehensive Coordination Plan for Local Public Transportation Systems), October 2009,p. 9.

More specifically, the following development policy has been set for each area.
(1) Inner-City・Includes urban areas existing since around 1970, aging dense urban areas and the city center.
・Areas of concentrated urban development where urban zones are to be restructured(2) Mid-City
44

・Areas between Inner-City and Outer-City with low-rise residential districts, or prospective areas
for supplying good-quality housing lots
・Concentrated urban zones with narrow community roads where there are many housing andcommercial districts disorderly developed during the high growth period
・Implementation of land readjustment projects, which promote surface development with goodliving environment resistant to snow, and district plans and other methods of inducing
desirable land use(3) Outer-City・ Areas outside the outer circumferential line, which mainly coincide with the Aomori
Expressway, where development is not allowed in principle, with efforts to be made to restrain
urbanization and preserve the natural environment and the farming environment

Next, based on the basic policy for the development of transportation systems, policies havebeen set for the development of transportation systems for each area.
(1) Inner-City♦ Seek to develop transportation systems, centering on public transportation systems
・Seek to enhance the convenience of bus use through the review of existing routes andintroduction of small loop-line buses.
・Seek to enhance the convenience of railway use through the review of timetables andimprovements to station facilities.
・Seek to enhance the convenience of access on foot to public transportation systems as well as
the convenience of bicycle transportation and vehicle transportation.
♦ In the city center, seek to enhance the convenience of coming to downtown by various meansof transportation and develop the pedestrian and bicycle transportation environment for touring
within the district.
(2) Mid-City♦ Seek to develop the transportation systems that promote the shift from private vehicletransportation to public transportation.
・Seek to enhance the convenience of bus use in various districts by developing not only trunkline routes but also branch bus routes.
・Seek to introduce a "cycle & bus ride system" by enhancing the convenience of access bybicycles to buses.
・In areas surrounding railway stations, seek to utilize a "bus & ride system" by operating busesin linkage with railway services.
45

・Proceed with the development of skeletal roads, including an inner circumferential line underconstruction, for efficient bus operations.
(3) Outer-City♦ Seek to develop the transportation systems that enhance the convenience of transferring
between vehicle transportation and public transportation systems.
・Seek to utilize trunk line bus routes for major suburban spots (Aomori Airport, key housing
complexes, and such).
・Seek to ensure the services of supplementary bus routes that connect to trunk line bus routes forother districts.
・Seek to utilize "park & ride systems" by making good use of existing parking spaces anddeveloping new bus routes for districts where it is currently difficult to use buses.
・Proceed with the development of radial ring roads to seek the coexistence of vehicles andpublic transportation systems.

Suburban feeder line

Suburban feeder line

Suburban feeder line
Urban area trunk lines

Suburban feeder line

Suburban feeder line
Connection starting point

Suburban feeder line

Suburban feeder line

Shinkansen station
Existing conventional
railway line station

Aomori Airport Suburban feeder line
Suburban feeder line

New conventional
railway line station

Tohoku Shinkansen

Bus connection hub<Figure 30> Image of Local Public Transportation Systems of Aomori City
Source: Aomori City Council on Comprehensive Urban Transportation and Aomori City, Aomori-shi Sogo Toshi
Kotsu Senryaku (Aomori City Comprehensive Urban Transportation Strategy)/Aomori-shi Chiiki Kotsu Sogo Renkei
Keikaku (Aomori City Comprehensive Coordination Plan for Local Public Transportation Systems), October 2009,
p. 73.

The Aomori City Urban Master Plan features the clear articulation of measures for local public
transportation systems according to the characteristics of the three areas sectioned in line with the46

compactification of city areas.

(2) Toyama City
In Toyama City, the population decline in the city center and the density decrease in urban areas
are expected to progress going forward. On the other hand, the number of users of public
transportation systems has been continuing to decrease, as the dependence on private vehicles
remains high among citizens, with the ratio of private vehicles in the share of transportation
standing at the highest level among Japan’s major urban areas.
Faced with these problems, Toyama City decided to seek to realize “the hub-centralized
development of a compact city around public transportation by revitalizing railway tracks and otherpublic transportation systems and concentrating a variety of urban functions, including residence
and commerce, along the routes.” The guiding principles of this development policy is the idea of
the “urban structure of skewered rice dumplings,” seeking to realize the urban life based onwalking and public transportation systems via the clustered urban structure, with walking spheres
described as “rice dumplings” and public transportation systems that connect the rice dumplings as“skewers.”

The Urban Structure of “ Skewered Rice Dumplings”
Toyama City is Striving for
Skewers: Public transportation systems with service
levels above a certain level
Rice dumplings: Walking spheres connected by theskewers
Shikata

Iwase
Mizuhashi

KurehaLegendRailway/streetcar service
Railway/streetcar service
Bus service
City center
Community life hubs

ToyamaFujikoshi
Fuchu
Minamitoyama

Oyama

YamadaYao

OsawanoHosoiri<Figure 31> Urban Structure of “Skewered Rice Dumplings” of Toyama City

47

Source: Toyama City, Toyama-shi Kokyo Kotsu Kasseika Keikaku (Toyama City Public Transportation
Revitalization Plan), March 2007, p. 35.

a. Portram
Toyama City launched the service of Toyama Light Rail in April 2006. The continuation offormer JR Toyamako Line was endangered due to the falling number of users. The JR line’s future
was discussed in the course of development of areas around Toyama Station in association with the
opening of Hokuriku Shinkansen, and then it was revived as LRT.
Toyama City decided to transform the Toyamako Line into a streetcar line. Subsequently, after
considering its technological aspects, demand and financial balance prospects, the city set up a third
sector entity, which launched the streetcar service as "Portram" in April 2006. While using tracks of
the Toyamako Line as they were, Portram newly constructed 1.1 kilometers of tracks aroundToyama Station and upgraded all vehicles, including the introduction of seven cars of new
low-floor vehicles. Toyama Light Rail was established by the public sector and are operated by theprivate sector, with around ¥5.8 billion spent on the purchases of vehicles and development of
tracks and stations subsidized by Toyama City, Toyama Prefecture and the State.

b. Centram
Toyama City extended and circularized part of intra-city track lines of Toyama Chiho Railway
and began the service as a loop line, or "Centram," in December 2009.
As the number of passengers using the intra-city track lines had been declining year after year,
Toyama City implemented projects to extend and circularize the intra-city track lines for the
purposes of revitalizing the core urban areas and enhancing the accessibility of the city center.
Centram created a new loop line of 3.4 kilometers by extending the existing tracks, and introduced
three cars of new low-floor vehicles. Centram uses a two-tiered system for the first time in Japan
under the 2007 Revitalization Act.

c.

Promotion of residential housing
Toyama City has been promoting residential housing to realize the development of a compact

city. In residential promotion zones along core public transportation systems, the city has been
providing support to promote construction of apartments and housing acquisitions. In addition, it
has been supporting and subsidizing housing construction, housing acquisitions and rents in the city
center as "downtown residential housing promotion projects."

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Toyama Light Rail line

JR Hokuriku Main Line

City center

Residential Promotion Zones
along Core Public Transportation
Toyama Regional Railway Main Line

City center

Hokuriku Expressway

JR Takayama Main Line

Toyama Chiho Railway Fujikoshi-Kamitaki Line

Residential Promotion Zones along Core Public
Transportation
Zone Map
Residential Promotion Zones along Core PublicCore public
transportation
Transportation
Core public transportation
Railway track Route buses(Routes with frequent run)
City limits<Figure 32> Residential Promotion Zones along Core Public Transportation
Source: Materials provided by Toyama City

49

<Figure 33> Downtown Residential Housing Promotion Zone (Tsutsumi-cho Dori, Toyama City)
Photo: Japan Municipal Research Center

These projects are designed to promote residency in the city center and along local public
transportation routes with public subsidies and their policy intentions are remarkably clear. Suchprojects may be affected by fiscal capabilities and other conditions, but are believed to present one
direction in developing a compact city with maintaining the added value of urban areas.

2. Community Bus
As a case example of community bus businesses, the independently-operated bus service (theloop-line bus “Ayame-Go” in the Hoden District) in Ueda City, Nagano Prefecture, is presented inthis section.

50

<Figure 34> Ueda City Hoden District Independently-Operated Bus “Ayame-Go”
Source: Excerpt from Support Center for Local Public Transportation Systems website, Ueda City Hoden District
Independently-Operated Bus “Ayame-Go” (Case Example of Local Public Transportation Revitalization),
http://koutsu-shien-center.jp/jirei/index.php?act=pdfDownload&pdfNo=68(1) BackgroundIn the Hoden district of Ueda City, there existed public transportation systems: the “Netsu Line”
and “Hoden Line,” both the alternative bus services of abolished railway lines, and “Orange Bus”
operated by the city. Since these bus services are operated on trunk line roads, there were many
areas with long distances to bus stops, making the access to bus services difficult particularly forthe elderly. Moreover, as a shopping mall and medical facilities are located in the Hoden district,there was strong demand for loop-line bus services that circulate within the district. Against thisbackground, the Hoden District Development Association, a resident organization for the entire
Hoden District, established the Loop-Line Bus Study Committee in April 2002.

(2) Deliberations
Since the Hoden District Development Association decided to establish the study committee in
April 2002, a total of 26 meetings were held over the next three years. In the course of deliberations,the study committee conducted a number of surveys towards all households in the district to grasp abetter understanding of their intentions about the need to introduce the bus service, the pros andcons and household burdens. As a result of these proceedings, the association reached theconclusion that the local loop-line bus service was necessary. In 2004 and again in 2005,
questionnaire surveys were carried out to ask residents whether the loop-bus service was necessary
even when the community had to bear burdens, and 68% of the residents replied the bus service
51was necessary in the first survey and 76% did so in the second survey.
In the wake of these questionnaire survey results, the Hoden District launched trial bus runs in2006. During the trial period, a questionnaire survey was conducted on the advisability offull-fledged operations, and based on the survey results, the association decided to commence thefull-fledged bus service with each household contributing ¥1,000 annually. In implementing thefull-fledged service, a revenue shortfall was covered by contributions from local corporations(about ¥800,000). The Ueda municipal government participated in the deliberations from the earlystage as an observer and provided the association with information on similar cases in other areas.

(3) Services
The service operator is the Hoden District Loop-Line Bus Steering Committee, which entrusted
existing transportation operators (taxi companies, and such) with operating a nine-seater jumbotaxi.
The bus service operates two days a week, for four runs a day, in accordance with theconnecting Orange Bus service. Its fare is set at ¥200 per ride.

(4) Financial burdens
All households in the Hoden district (1,450 households in FY2011) contribute ¥1,000 a year,
and these contributions cover 52% of operating expenses. In the questionnaire survey on the pros
and cons of burdens on residents, “yes” respondents on the annual contribution of ¥1,000 wereasked to sign the survey form in an effort to have the residents consider the issue as their own
problem. All households that are members of the community association are required to makecontributions, which collected as part of community association membership fees. When thehouseholds’ contributions and fare revenues are not enough to cover all the expenses, the shortfall
is covered by “subsidies for operational expenses of local independently-operated buses, and such”
created by Ueda City on the occasion of the introduction of this bus service. Ueda City pays out thesubsidies to cover an equivalent amount of one-third of the bus operating expenses, up to ¥1
million, to livelihood-supporting transportation systems operated by communities independently.

(5) Outcome
The Hoden district loop-line bus service has seen the number of users gradually increase overthe course of the trial and provisional operations to the full-fledged operations (Besides, the fare
was raised from ¥100 to ¥200 per ride when the trial operations were upgraded to the full-fledged
operations). The introduction of the livelihood-supporting means of transportation, which connects
52

to existing bus routes and covers areas finely, helped substantially reduce the zones withouttransportation and secured the means of transportation for people with limited mobility, such as theelderly and the physically-challenged. The residents have the very strong “sense of my bus,” andthey are taking the initiative in activities to back up the bus service. For example, the “Ayame-Go
Dayori,” a leaflet designed to make the bus service well-known and broaden the community’sunderstanding of the bus service, is being published by the federation of community associations,residents’ organization, and the Hoden District Loop-Line Bus Steering Committee.

(6) Review
The Hoden district has had the Hoden District Development Association, a residents’organization, for a long time, and the association functions as a forum to discuss issues of thecommunity as a whole by going beyond the boundary of the community association. Throughdiscussions at this forum, the Hoden district residents act proactively on whatever necessary for thecommunity, and prior to the introduction of the loop-line bus service, they succeeded in inviting
medical facilities and the shopping mall. The fact that the Hoden district had the residents’organization that could have proactive discussions on the community’s issues at large and could
proactively act to solve the issues, led by some residents with leadership quality is one of thefactors that helped realize the introduction of the loop-line bus service that required contributions
from local residents.

3. Community Development through Wide-Area Partnership
In 2008, the Ministry of Internal Affairs and Communications announced the Concept ofAutonomous Settlement Zones. Under the recognition that in a society beset with declining
population and the acceleration in the aging of population and dwindling birthrate, it is no longer
possible to develop a full set of life functions, the vision seeks to develop an Autonomous
Settlement Zone, with a core city and neighboring municipalities forming a regional zone, where
the core city intensively develops urban functions necessary for the livelihood in the entire regionalzone and forms partnership and exchanges with the neighboring communities.
Since 2009, the number of entities that started addressing the Concept of Autonomous Settlement
Zones has increased significantly, and as of October 1, 2014, a total of 87 regional zones have been
established under agreements on the formation of Autonomous Settlement Zones or as a result of
the adoption of policies for Autonomous Settlement Zones. In such Autonomous Settlement Zones,
local public transportation is positioned as a policy field to be addressed by many regional zones,
next only to medical care (See Figure 35).
53

<Figure 35> Status of Work on the Concept of Autonomous Settlement Zones by Policy Field
Source: Created by the author based on materials of the Ministry of Internal Affairs and Communications

This signifies that the recognition has become widespread among local governments that
attempts of a single local government have limitations in maintaining a transportation network
amid the declining population and that efforts to maintain local public transportation systems
through wide-area partnership policies have become conspicuous. The case of the Hachinohe
regional zone is taken up below as a concrete example of such efforts.
The Autonomous Settlement Zone of Hachinohe Region is the regional zone that consists ofeight municipalities, with Hachinohe City as the core city (the regional zone’s population stands at
335,000). Regarding the links within the regional zone, of seven municipalities other than
Hachinohe City, on average, over 20% of residents of four municipalities commute to Hachinohe
City for work (the highest percentage is 57%), and the average ratio of inpatients who are citizensof the seven municipalities in Hachinohe City is over 30% (the highest percentage is 97%).
Regarding consumption, six municipalities absorb over 50% of shopping goods (the highest
percentage is 91%).

54

Oirase Town

Gonohe Town

Hachinohe
City

Shingo Village
Nanbu Town

AomoriPrefecture

Hashikami
Town

SannoheTown
Takko Town

<Figure 36> Autonomous Settlement Zone of Hachinohe Region
Source: Excerpt from Ministry of Internal Affairs and Communications, Zenkoku no Teiju Jiritsu Ken no Torikumi
Jokyo ni Tsuite (Status of Work on the Autonomous Settlement Zones across Japan)

On the basis of the strong links within the regional zone, in the field of local public
transportation, the Hachinohe Regional Zone Public Transportation Plan Promotion Council wasestablished. Also, in order to grasp demand for public transportation systems, a demonstration
experiment was carried out on low-fare policies for wide-area route bus services encompassing a
number of municipalities, resulting in the increase of users. Improvement of transferability between
bus services has also become an important issue, and efforts are under way within the regional zone
to set up signboards for smoother transfer (Table 9). The regional zone plans to continue these
efforts in accordance with the Second Hachinohe Regional Zone Public Transportation Plan,
adopted in March 2014.

55

<Table 9> Achievements of the Autonomous Settlement Zone of Hachinohe Region[Achievements]FY
FY2010Description
・The Hachinohe Regional Zone Public Transportation Plan Promotion Council established・The planning and design of the scheme to rebuild the fare system carried out

FY2011

・The field survey on getting on and off carried out
・The demonstration experiment launched on the cap fare of ¥500 for wide-area route bus services(Experiment period: October 2011-September 2013)
・The demonstration experiment public relations project (flyers, bus body advertising, and such)carried out
・The project to provide information on connection measures (development of connection guideboards, and such) carried out

FY2012

・The field survey on getting on and off carried out
・Posters and mini-guides for the promotion of exchanges within the regional zone using public
transportation prepared

FY2013

・The field survey on getting on and off carried out
・Consideration of the continuation of the cap fares after completion of the demonstration experiment・Consideration of responses to the introduction of the consumption tax rate of 8%
・Review of the Hachinohe Regional Zone Public Transportation Plan

Source: Hachinohe City, Second Autonomous Settlement Zone of Hachinohe Region Coexistence Vision, March
2014, p. 41.

Looking at the examples of efforts on local public transportation systems through wide-area
partnership, it becomes clear that the wide-area partnership approach by local governments is
effective in securing local public transportation particularly in the following points:

a. Wide-area policies for low fares
In many cases, high fares are cited as a key factor behind the declining use of buses in recent
years. Many local governments are highly interested in low-fare measures to secure sufficient users
for public transportation. It is difficult for a single local government to take effective steps
regarding wide-area routes that cover a number of municipalities. However, it becomes possible totake full-fledged low fare measures if a number of municipalities cooperate in conducting a social
56

experiment on low fares.

b. Improvement of transferability
For bus businesses, improvement of transferability, such as the shortening of time required fortransfer among bus services or between bus and train services and improving the display ofsignboards, is an important challenge. Improvements in connections among timetables and thedisplay of unified signboards for transfer through wide-area partnerships can be very effective
steps.

c.

Establishment of the identity of local public transportation businesses
Another effective measure is to strive for the increase in users of local public transportation

services by enhancing the name recognition of these services through unified logos for service
routes and the holding of events via wide-area partnerships.
Going forward, it is hoped that efforts will be mounted in various areas about local public
transportation systems through the Autonomous Settlement Zone and other wide-area partnershipapproaches.

IV Conclusion
In the Basic Policy for Overcoming Population Decline and Vitalizing Local Economy in Japan,
adopted by a cabinet decision on June 30, 2015, “community development and regional
partnerships” are positioned as one of the key policy measures. The Basic Policy provides thata variety of urban functions should be deployed so that they are accessible and highly
convenient for residents and the "earning power" of communities should be enhanced
by concentrating people and corporation in certain areas and realizing an "economy ofdensity." It also states that, for that purpose, comprehensive efforts should be made to
developtransportation

networks

withneighboringareas,

includingthecompactification of cities and rebuilding of public transportation networks, incooperation with relevant policy measures, such as the restructuring of public facilities,
optimum use of state and public assets, medical care and welfare, and revitalization ofcity centers.
In seeking to develop compact cities, the policy is aimed to form transportation networks withneighboring communities, including the rebuilding of public transportation networks, and enhancethe “economy of density” and the “earning power” by concentrating people and corporations incertain areas.
57

The social and economic conditions surrounding Japan’s local public transportation systems areundergoing very rapid changes, including sharp population drops, deregulation, the increase inpeople with limited mobility associated with the aging of population and the increase inuninhabited areas. We must respond to these changes and consider to ensure sustainable means oftransportation for communities as the ultimate challenges. To that end, we must pursue the two
directions of the compactification of individual cities and wide-area partnerships with neighboringareas in accordance with individual community conditions.
In doing so, it is important to take heed of the following points:(1) Given the diversification of business operators, find and foster diverse “supporters of
local public transportation systems” in communities
In recent years, we are entering the era of diversifying operators of public bus services, such as
publicly-operated bus services, independently-operated community bus services, community bus
services operated by municipalities and public welfare bus services. In order to maintain local
public transportation systems and ensure the means of transportation in communities under thesecircumstances, the framework of only local governments supporting them often faces difficulty indealing with the situation. Thus, what is required is a framework that assumes a variety of business
operators, not only local governments but also community councils, NPOs and other entities, andunder such a framework, organizations of community residents, local corporations, NPOs, roadtransportation business operators and other entities should support local public transportation
systems in such fields as business execution, planning and operations, public relations and fundcontributions. It is therefore important to find and foster the supporters of this framework. To that
end, it is effective for local governments to strive to revitalize community activities and makeefforts to have relevant parties share the consensus about the need to secure thelivelihood-supporting means of transportation in respective communities.

(2) Strengthen the linkage between community-development policies and transportation
policies
It is of importance for local government to link city planning and community-revitalizing
activities to transportation policies, instead of simply discharging their obligations passively. To
that end, it is hoped that local governments will proactively and subjectively develop local public
transportation services.

(3) Consider the appropriate composition of revenue sources according to business forms by58

taking the new three elements of fare revenue, public subsidies and beneficiary charges into
account
Regarding community bus services, it is often pointed out that these services include routes oflittle demand, in addition to the spreading patterns of low and fixed fares. In such cases, if
operating losses from service routes with considerable low demand are automatically covered bypublic subsidies, it would give rise to the issue of “fairness within a community.” In order toeliminate such problem, it is of benefit to consider a combination of “fare revenue, beneficiary
charges and public subsidies” as the composition of revenue sources. It is hoped that fairness within
a community can be secured through a carefully developed formation of community bus routes byintroducing beneficiary charges on top of fare revenue and public subsidies, thereby helping rouse
the interest in bus operation policies among those paying beneficiary charges.

(4) Maintain transportation networks through effective use of the wide-area partnershipapproach evolving among local governments in recent years
As discussed earlier, there are expectations that wide-area low-fare policies, improvement oftransferability and the establishment of community identities can be realized through the wide-area
partnership approach.
It is hoped that the national and local governments, with the perspectives mentioned above, will
establish a framework to support the “sustainable means of transportation for communities” bytaking acute responses to changes that are taking place in the domain of local public transportation
systems.

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