The paper focuses on the market for local public transport in Italy, which was characterised, in the last two decades, by soft budget constraints and declining effectiveness (i.e. the share of people using private cars has increased dramatically). The paper also focuses on some features of the recent reform of local public transport. Special attention is devoted to the tendering system which is due to be employed by the end of 2003 and to the incentive characteristics of "service contracts" that must be signed by tender's winners and local public authorities. Some of the tenders already adjudicated are analysed in order to show the difficulties incurred by the method adopted for selecting bids (i.e. a special form of weighted multicriteria). A section of the paper analyses the recent restructuring of the local public transport in Rome, which is modelled along the London experience.