The analysis of transport privileges decentralization in Ukraine in the conditions of current order of preferential transportation funding has been conducted; it is established that social responsibilities for transport privileges funding exceed the capacity of local budgets, and a practice of regional restrictions on transporting citizens of privileged categories is inconsistent with current legislation and violates the rights of benefit recipients. It is also established that the source of social benefits monetization funding in Ukraine, as well as of the statute-instituted and current social guarantees for preferential transportation in Ukraine has not been determined. The lack of responsibility for preferential transportation between central and local authorities deepens the crisis in municipal and commuter public transport in Ukraine. The analysis of the active mechanism of compensation calculation and payment to enterprise-carrier for transportation of preferential categories of passengers has been conducted; it is determined that the volumes for the preferential transportation services consumption in Ukraine have not been defined.The current state and modern development trends of the transportation by municipal and commuter public transport are established. The main problems of municipal and commuter public transport are determined. The level of excess of expense necessary to finance transport privileges over actual expense of the local budgets funds is determined. Theoretical and practical recommendations on maintenance of passenger traffic socio-economic efficiency by means of transport privileges have been substantiated. The necessity to legislatively provide local authorities with the sole right to establish transport privileges, categories of benefit recipients, regional norms of transportation services preferential consume, as well as criteria of particularly vulnerable citizens’ groups selection for the successful functioning of the mechanism of transport privileges monetization at the expense of local budgets funds has been emphasized. 

privileges decentralization, monetization of privileges for the public transport use, funding of transporting citizens of privileged categories, local budgets