TFL Bus Strike

[Egg Centric]

I didn't really want to make this thread; I searched the forum hoping someone else would have so I could lurk. Since they haven't I guess I'll seed. There's a major bus strike scheduled for this week for the RATP controlled bus companies that sub contract(?) for TFL.

Anyone know anything interesting about it? The union announcement can be found here and at first glance it seems they have a perfectly reasonable gripe - essentially RATP sound as though they are worsening conditions for one of their child companies and for another making only the most paltry improvements, bringing it nowhere near the former.

RATP is using the Covid-19 pandemic to attack the terms and conditions of the drivers at the London United subsidiary. Due to the proposed contracts drivers face wage cuts of £2,500 which will reduce wages to 2015 levels, additionally, due to attacks on conditions, drivers will be expected to be at work for far longer.

The company has also threatened to introduce zero hours style contracts, which would result in drivers only being paid for when they are physically driving a bus and not when they are actually at work.

Am much less sympathetic about the Metroline one also mentioned in that release - if anyone fancies starting a thread about that one I'll happily elaborate.

 

[GusB]

Before we go any further with this, I'd just like to advise everyone to keep it civil. Industrial action is an emotive subject and, as we have seen in the railway related strike threads, it can create some heated discussion.

If there is industrial action occurring at more than one company, I'd rather it was discussed here instead of in a separate thread.

Play nice, folks

 

[Robertj21a]

This needs a piece from RATP in order to balance out the Union rhetoric. Without that we can't know the whole story.

 

[Snow1964]

There seems to me to be couple of things here, one is historic, London United, Sovereign, Quality Line, were separate companies so had their own employment pay rates and conditions.

The second factor is that various routes are swapping garages and entities (I think the legal term is novated) and that has resulted in people working alongside each other with different conditions. In addition it seems terms for new hires are different from those who started years ago.

Of course the TfL tendering system still rewards lowest price (although other factors like quality form part), this does rather lead to a cost cutting race to the bottom.

Of course in a simple economic model, if the company doesn’t pay the staff enough they will leave and go elsewhere. But this doesn’t apply due to a lower limit, and in same way the National minimum wage has a problem (instead of it being worst case, seen by some employers as a lower target to drop to), the London mayor introduced a minimum for bus drivers. Again whilst good intentions existed, all it did was induce creativity to get around it.

Unite have a habit of using threats of strike action as a method of negotiating. Unfortunately it isn’t very effective these days because you are tackling the intermediatory (Operator) and not the company setting the contract (TfL). Would only work if the contract between TfL and Operator had severe penalty clauses (it’s not like a one day strike loses the Operator a weeks income). As it stands the strike doesn’t really harm the Operator, (more slap on wrist than costing big chunk of its bank balance), but the people taking the financial hit are those losing pay.

 

[LAIRA]

There seems to me to be couple of things here, one is historic, London United, Sovereign, Quality Line, were separate companies so had their own employment pay rates and conditions.

The second factor is that various routes are swapping garages and entities (I think the legal term is novated) and that has resulted in people working alongside each other with different conditions. In addition it seems terms for new hires are different from those who started years ago.

Of course the TfL tendering system still rewards lowest price (although other factors like quality form part), this does rather lead to a cost cutting race to the bottom.

Of course in a simple economic model, if the company doesn’t pay the staff enough they will leave and go elsewhere. But this doesn’t apply due to a lower limit, and in same way the National minimum wage has a problem (instead of it being worst case, seen by some employers as a lower target to drop to), the London mayor introduced a minimum for bus drivers. Again whilst good intentions existed, all it did was induce creativity to get around it.

Unite have a habit of using threats of strike action as a method of negotiating. Unfortunately it isn’t very effective these days because you are tackling the intermediatory (Operator) and not the company setting the contract (TfL). Would only work if the contract between TfL and Operator had severe penalty clauses (it’s not like a one day strike loses the Operator a weeks income). As it stands the strike doesn’t really harm the Operator, (more slap on wrist than costing big chunk of its bank balance), but the people taking the financial hit are those losing pay.

Sums up the situation very well. As with all tendering it is always a race to the bottom.

 

[Goldfish62]

Sums up the situation very well. As with all tendering it is always a race to the bottom.

Race to the bottom never ends well, but I'm not sure there's any evidence that wages have been depressed any more in regulated London that they have in the deregulated outside world.

There seems to me to be couple of things here, one is historic, London United, Sovereign, Quality Line, were separate companies so had their own employment pay rates and conditions.

The second factor is that various routes are swapping garages and entities (I think the legal term is novated) and that has resulted in people working alongside each other with different conditions. In addition it seems terms for new hires are different from those who started years ago.

Of course the TfL tendering system still rewards lowest price (although other factors like quality form part), this does rather lead to a cost cutting race to the bottom.

Of course in a simple economic model, if the company doesn’t pay the staff enough they will leave and go elsewhere. But this doesn’t apply due to a lower limit, and in same way the National minimum wage has a problem (instead of it being worst case, seen by some employers as a lower target to drop to), the London mayor introduced a minimum for bus drivers. Again whilst good intentions existed, all it did was induce creativity to get around it.

Unite have a habit of using threats of strike action as a method of negotiating. Unfortunately it isn’t very effective these days because you are tackling the intermediatory (Operator) and not the company setting the contract (TfL). Would only work if the contract between TfL and Operator had severe penalty clauses (it’s not like a one day strike loses the Operator a weeks income). As it stands the strike doesn’t really harm the Operator, (more slap on wrist than costing big chunk of its bank balance), but the people taking the financial hit are those losing pay.

Very good analysis. I can confirm that pay generally (but not always) increases with seniority so you have several different pay grades with garages, and that's before TUPE is factored in.

I don't know if it still goes on, but one thing that has happened in the past is in the run to a route being tendered rotas have been reorganised to put the best paid staff on said route, making them eligible for TUPE should the route be lost. If the route is lost and the drivers move across to the winning operator it can put the new operation into loss from Day 1 with no prospect of the operator being able to get out of the contract until the break clause in Year 3.

Also to note is that in the most recent accounts to Dec 2019, RATP made a 400% loss (£22 million). I'm not quite sure how they managed that!

 

[TheGrandWazoo]

Race to the bottom never ends well, but I'm not sure there's any evidence that wages have been depressed any more in regulated London that they have in the deregulated outside world.


Very good analysis. I can confirm that pay generally (but not always) increases with seniority so you have several different pay grades with garages, and that's before TUPE is factored in.

I don't know if it still goes on, but one thing that has happened in the past is in the run to a route being tendered rotas have been reorganised to put the best paid staff on said route, making them eligible for TUPE should the route be lost. If the route is lost and the drivers move across to the winning operator it can put the new operation into loss from Day 1 with no prospect of the operator being able to get out of the contract until the break clause in Year 3.

Also to note is that in the most recent accounts to Dec 2019, RATP made a 400% loss (£22 million). I'm not quite sure how they managed that!

The issue with the tendering system is that it sounds great in terms of "sticking it to the man" but in the end, forgetting a bit of social value garnish, it is aimed at squeezing out the lowest price. So if you look at the main cost lines

• buses cost X amount to buy (or lease as it's not much difference) and there's not much difference when you consider the TfL specialities
• Fuel is fairly fixed when you're talking about the big firms involved in most London tendering
• Firms need to have a level of contribution to satisfy investors etc, and that's a smaller area anyway
• Back office costs have been pared down
• So aside from some areas like insurances or the proximity of depots, the main lever to pull in with driver wages

As for the 400% loss, that is RATP's group results and it's where they have listed the various loss on sales/asset impairments of their disposals of such as Selwyns and Bournemouth, and an asset impairment on London sightseeing.

The individual firms of London United, Quality Line and Sovereign all still submit their own annual returns and even those have recorded losses with one offs on disposals and restructuring etc.

 

[Goldfish62]

The issue with the tendering system is that it sounds great in terms of "sticking it to the man" but in the end, forgetting a bit of social value garnish, it is aimed at squeezing out the lowest price. So if you look at the main cost lines

• buses cost X amount to buy (or lease as it's not much difference) and there's not much difference when you consider the TfL specialities
• Fuel is fairly fixed when you're talking about the big firms involved in most London tendering
• Firms need to have a level of contribution to satisfy investors etc, and that's a smaller area anyway
• Back office costs have been pared down
• So aside from some areas like insurances or the proximity of depots, the main lever to pull in with driver wages

Yes, especially as staff costs are the predominant element of the cost base, being around 60% (against about 45-50% outside London).