Fare levels
Fare structure sets the relationships between different classes of passengers. The fare level, on the other hand, is set depending on the overall amount of revenue that the operator is expected to generate.

Fare income: The structure of fare income can be thought of as a set of percentage variations to the standard adult single journey fare for different groups (e.g., 50% discount for students, 25% premium for express routes, 30% discount for monthly passes). The fare level is how the family of fares moves up or down and is determined by the target cost recovery ratio for the system.

If fare income is expected to drop to 80% of total costs in the coming year due to general inflation, and the target is 100% cost recovery, the fare level will have to rise by about 25% (assuming no loss in passengers as a result of the higher fares) to achieve this. How this is done must be in line with the social objectives of the fares policy and the agreed fares structure.

Where governments set general fare controls for whatever reason, they must remember that the same controls do not apply to costs. If fares are not allowed to rise in line with costs then the subsidy for the bus operation must increase.

Governments must be sure that they have the resources to fund the deficits and maintain the bus operation under these circumstances. If keeping fares low on formal bus services results in reductions in service coverage, it’s often counterproductive as the poor may no longer have a usable bus service and may be forced to use informal transport at much higher fares.

Other sources of income: In calculating the fare level, account must be taken of any predetermined hypothecated (earmarked) revenue for transport subsidies (e.g. versement transport and vale-transporte .