Compared to the conventional public transportation, metro is a more fast comfortable, safe, energy-saving and environmentally friendly method of urban public transportation .The development of metro improves the city traffic situation and brings enormous external benefits to the government, enterprises and residents along.
But great construction funds, high operation costs and long recovery are needed to provide the transportation services y metro. This means that the transportation services by metro is a typical example of natural monopoly products. China encountered many problems such as the shortage of construction funds, and payments imbalance in metro operation.
Some essential features of metro should be taken into account in choosing operation mode of metro. A metro line is of natural monopoly, while the operation of metro is of unnatural monopoly, and business nature. Moreover, metro also has the intense exterior effect. Based on the analysis above, it is concluded that the “state-owned but run by private capital mode, illustrated by the Shanghai metro, is a suitable operation mode for metro. Accordingly, this article makes policy recommendations to seek the necessary prompts.
KEYWORDS：Metro, Operating Mode, Efficiency Regulation
