Over the past decade, there has been a wave of public support in many countries for privatization and deregulation in a number of indus tries. One of the industries in which privatization is most controversial is urban transportation. In some ways, urban transportation has been the most resistant to privatization, both in the intellectual/theoretical realm and in the political realm. Nevertheless, there is increasing dis cussion of privatization to transportation. Recently, the Governor of Massachusetts appointed a task force to study the possibility of privatiz ing the maintenance of highways, commuter rail lines, and Boston's Logan Airport (Wall Street journal, May 1, 1991) . There are talks of privatizing the airports of Philadelphia and Los Angeles, and of privatiz ing transportation services in other cities. In any case, the arguments for and against privatization are different in many ways for the transpor tation sector because of the unique characteristics of urban transporta tion markets. Among the special characteristics is the common expecta tion that urban transportation, unlike most commodities and services, should operate in order to meet a variety of social goals beyond mere efficiency, including distributional, environmental, and political goals.