There is no doubt that the urban public traffic operations in China suffer losses and hence it is necessary to study resonable subsidy mechanisms for the urban public traffic. On the basis of analyzing the modes of the urban public traffic management, we classify the financial losses into the policy loss and the management loss, according to whether the cost can be compensated or not. In addition, a series of criteria are introduced in order to efficiently decide the amount of subsidy. Finally, this paper also examines the way of bidding administration, which is considered to be promising in the future of urban public traffic.
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