Pii: S0191-2615(98)00027-7

This paper shows a scheme of urban transport management aimed at solving the externalities due to road trac. In this scheme both private and public transport modes are managed by a planning authority having control of some decision variables: road pricing, transit ticket prices, and the service characteristics of transit. The multimodal transport system is subject to some constraints: physical and environmental capacity constraints, and budget constraints. In some cases an upper bound is imposed on the ticket price, in order to help people who are captive of transit. The planning authority ®xes the level of all user charges and the transit service characteristics, in such a way that the average transport generalized cost is minimized, and at the same time the transport system is in equilibrium and all constraints are satis®ed. A mathematical model of this management scheme is presented, and it is applied to the bimodal network of an Italian town, in order to show the e€ects that the management policy, and in particular the constraints imposed on the transport system, have on urban transport cost. Among other things the results obtained show, in accordance with the opinion of other authors, that the market of urban public transport is a niche market, whose properties, along with the characteristics of transit systems, are essentially determined by the physical and environmental capacity constraints of the road transport system. # 1998 Elsevier Science Ltd. All rights reserved.