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In 1996, Sri Lanka had a mixed public and private bus system, with about one-third of passengers carried by public companies and two-thirds by private. The private buses were not earning enough from passenger fees to replace their buses and as a result there were many complaints of overcrowding and safety problems. The public buses were making do largely because they received free buses from the government. Improving bus service was critical for the country since approximately 80 percent of motorized passenger trips are carried by buses. The government was considering a variety of reforms including fare increases and consolidation of small public and private operators. This case can be used to discuss the politics and rationale for regulation and privatization. And the case describes a 90 year history of privatizing, nationalizing, and re-privatizing the bus industry.