Is competition law actually negative in commercial bus operations?

[Meerkat]

Would these looser specs mean operators suggesting cheaper and/or more effective plans for them to be stolen by the authority and retendered on some pretext?

Isn't that effectively what happens already with contractor pre-engagement? Having your plans stolen doesn't really matter if its before the actual competition bit, and the efficiency can have gains for the operator in terms of not needing to commit more investment etc.

 

[Citistar]

Isn't that effectively what happens already with contractor pre-engagement? Having your plans stolen doesn't really matter if its before the actual competition bit, and the efficiency can have gains for the operator in terms of not needing to commit more investment etc.

It does matter if you're an operator with two or three buses who puts together a plan to work something efficiently which is then passed to (by the tendering council) and registered by the local major operator "commercially" to prevent anyone else entering the market. Local government has more than enough funding not to use indepdent operators as a free consultancy.

 

[Meerkat]

It does matter if you're an operator with two or three buses who puts together a plan to work something efficiently which is then passed to (by the tendering council) and registered by the local major operator "commercially" to prevent anyone else entering the market. Local government has more than enough funding not to use indepdent operators as a free consultancy.

If you aren't cheaper than the big operator then it wont make any difference - you will be more expensive if you don't offer anything different or if you do.
But you might be able to offer something near to the initial spec, that is good enough for the council, and your circumstances mean you can do it cheaper.

 

[Kremlin Stooge]

Pardon me, but there is some re-writing of history here - nationalisation was certainly not seen as a solution to the unsatisfactory private monopolies owned by large groups. There was 20 years between the nationalisation of the two groups - Tillings were inadvertently nationalised in 1948 when the Railways were nationalised. Both groups had railway owned shareholdings, but Tillings were owned more than the percentage where the other shareholders have to be bought out, when the railway came under common ownership. 20 years later BET approached the Govt. to buy them as they didn't want to carry on, due to falling traffic and rising costs and no other prospective buyer. No doubt if Tillings had not been nationalised in 1948 they would have done the same, probably slightly earlier as their companies had a greater proportion of green fields. The 1930 Road Traffic Act, establishing the Traffic Commissioners, had effectively brought the private monopolies under control (and extended them).

It wasn’t my intention to re-write history, just to provide a precis’d overview. I apologise for not getting into the nitty-gritty and for triggering anyones OCD. Thank you for providing additional detail, which confirms that the bus industry has been subject to a long history of legal intervention, not just on the competition front.

 

[EAD]

As a competition lawyer I would like to just layer in a few points around competition law and the route the UK has taken as I think they are too often over simplified/muddled. I also speak from experience having worked for a large transport organization and a specific large merger in the UK impacting bus and rail operations. Also helps of course given I am here I have an interest in transport too.

Broadly there is nothing prescribing how you run your bus services, but as we all know deregulation and the resultant model outside London brings with it a structure that went from the state providing the service to one of on market competition with liberalisation of the regulatory regime. If you have that in place then anyone can run a bus and compete with another company as it wishes. That is why competition law then bites as given they are competitors in the market. It is worth noting most neighboring countries have not followed this path.

There is nothing stopping you having frameworks within which to provide ticketing/branding etc and there are various ways of doing that. Of course the best approach is a form of Verkehrsverbund/PTE. It can be done in a competition law compliant way, but the way the UK has set this up is not conducive to it as the competition on the market genie was let out of the bottle. Clearly London is the exception there and indeed in many places abroad with such a model you have private bus companies running contracts and accepting/issuing tickets as part of that area's fares system.

Tendering is of course competition for the market i.e. companies bid to then run a service against a framework of requirements - that would be the easiest way to prescribe ticketing, frequency etc for an area. Really in my view it would make sense to give these powers to Cities and regions like London does. Again no issue from a competition law perspective, but of course the current larger bus companies would prefer to have the post 86 environment they currently have.