Fare supplies part of revenue of the public transportation system and has significant effects on its finical cycle as well as utility. From passengers’ point of view, fare structure would be fair when the charge is proportionate to the usage. In other words, justice is served when there is a harmony between the benefits each passenger takes and the cost she pays. This thesis presents calculations of a distance-based fare system in terms of demand and revenue and investigates a case study for Isfahan Bus Transit system. It also assesses the social equity under the proposed fare structure. The results show that under distance-based fare structure, Gini index would improve and demand and income would increase.