Why Ukraine needs to amend its law on subsidized bus transportation. Blog by the director of MAPA

Preferential transportation in Ukraine has long been in need of reform: citizens are entitled to free travel, but transport operators have not received compensation for years. As a result, the system is effectively not working, creating constant conflicts between the parties and financial losses. This was reported by MAPA Director Alona Veklich in a blog post for BusinessCensor.

In Ukraine, more than 14 categories of citizens are entitled to free bus travel, from combatants and people with disabilities to children from large families. The law guarantees compensation to carriers, but in practice, it is rarely paid. As a result, carriers are forced to limit the number of discounted seats, which has no legal force, and receive fines for refusing transportation.

According to MAPA, in 2025, carriers' losses from discounted trips exceeded UAH 6.1 billion, while only about 12,200 carriers operate in the market.

The problem is to be solved by draft law No. 5651-2 “On Amendments to Certain Legislative Acts of Ukraine Regarding Travel Discounts and Certain Other Benefits”.

Key changes in the draft law

• Targeted compensation for each beneficiary via a special bank card;
• Payment for travel only with an electronic or paper ticket;
• Mandatory installation of automated fare collection systems on buses;
• Introduction of a multimodal (electronic) ticket for use on various modes of transport.

Beneficiaries will need to open a special account at a designated bank and undergo verification by local authorities. Funds for travel will be credited to the card on a monthly basis, and unused amounts will be returned to the bank.

 At the same time, the state is creating a unified automated fare collection system, to which the authorities will be connected. The transition period is expected to last two years.

Why is this necessary?

The reform will allow:

• To resolve conflicts between beneficiaries and carriers;
• To ensure the effective implementation of the right to free travel;
• To provide carriers with resources to upgrade their transport;
• Reduce shadow transportation and increase tax revenues to UAH 10 billion per year.

A similar system is already in place in the Poltava region, demonstrating its effectiveness. Despite the complexity of the changes, the reorganization of preferential transportation is an inevitable step. Read more about the bill in the MAPA blog for BusinessCensor.