Land Transport Fare Project: Costs Should Not Exceed 50% of Daily Household Income

By: Mohamed Alabdullah

The General Transport Authority invited the Transportation and Communications Sector to participate in submitting its views on the project “Policy for Determining Land Transport Fares for Passengers in the Kingdom of Saudi Arabia” during the period from July 29 to August 13, 2025. The Authority noted that the project aims to regulate fares for land public transport for passengers, ensure they are provided at a good standard and at an appropriate cost for passengers, and achieve long-term financial sustainability for transportation systems. It covers taxi transportation services, public taxi transportation within cities, public taxi transportation between cities, and airport taxi transportation. It also includes mediation in public taxi passenger transportation via electronic applications, as well as public bus transportation within cities and intercity bus transportation. The Authority emphasized that the project aims to stimulate the use of public transportation, ensure appropriate fares for passengers, enhance the financial sustainability of systems, raise operational efficiency, and support ease of use and integration between public transportation systems. According to the project, fare prices include the following basic fees: (a service start-up fee or the initial amount – a distance-based fee (per kilometer) calculated based on the distance traveled – a waiting fee (per minute) calculated for each minute of waiting time (whether the vehicle is stationary or moving at a speed of less than 20 km/h).

The project set the minimum usage for taxi services according to a fare approval mechanism based on mathematical models. Daytime and nighttime fares for various vehicle capacities are subject to the basic fees. Nighttime hours (working days are Sunday to Thursday from 12 AM to 6 AM), while weekends are Friday and Saturday from 2 AM to 6 AM. Vehicle capacity is also limited to a maximum of 4 passengers – 5 passengers or more.

The project reviewed the pricing mechanism for airport taxi services and public transport stations, where additional fees are imposed for airport taxi services or public transport stations based on several factors, such as the cost of providing the service. Therefore, additional service fees may vary from one location to another and are added. These fees are based on the standard fare (such as the service start fee) for each trip from the airport or station.

The draft requires the Authority to regulate fare levels to ensure that prices are appropriate for passengers and that competition among service providers is fair. This is done using specialized mathematical models to calculate appropriate fare limits. The draft stipulates that the cost of using public transportation for basic transportation (work or study) per day should not exceed 50% of the average daily household income. This assumes that 50% of the household uses public transportation daily, at a rate of two trips per person. The draft also requires that the cost of using public transportation for basic transportation (work or study) per day should not exceed 10% of the average daily household income for long (suburban) trips, assuming that 50% of the household uses public transportation daily, at a rate of two trips per person.