On-road competition, positives and negatives

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Bletchleyite

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Reading the news of Flixbus entering the UK and doing so by charging very low, loss-leader fares in an attempt to see off Megabus/NatEx, it occurred to me that competition in the bus and coach industry almost always seems to be of this sort of type - basically muscling in with a large bank balance and burning a load of it to try to force the competitor to collapse or withdraw first.

Give or take the "value beans wars" of the 90s, this is not normally how competition in the retail or food industry works - when a competitor enters the market they might chuck in loss leaders to get people to try the new store, but rarely is this the whole basis of the competition. For instance, if McD's opens up next to Burger King they don't sell Big Macs for 50p until Burger King folds, rather they give some initial offers then rely on customers preferring their approach to the other's.

Why, I wonder, is this highly aggressive approach the norm in the bus and coach industry? Why do we rarely if ever see genuine competition, i.e. another operation coming in with a unique value proposition that is sustainable long term? (Edit: though I suppose you could argue that Megabus itself did do that because its pricing model is more airline-like than what NatEx was doing at the time).

Should we perhaps consider prohibiting this sort of "loss leader" competition as anticompetitive in law, as it is pretty much always of disbenefit to the customer in the long-term, because it just results in the same situation of a monopoly, just by a different operator?
 
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scosutsut

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Ultimately loss leading should be viewed as an extremely uncompetitive behaviour - it's muscling, bullying, whatever you want to call it to "steal" complete ownership of a market that previously said company wasn't involved in.

Stagecoach/Busways/Darlington saga feels like the most infamous one, albeit that was complicated by the fact that DTC was for sale at the time and background behaviours by the union(s).

You wonder if fare regulation was put in place and future prices changes were restricted to a small multiple (say 10%) if that would discourage the behaviour?

So say you muscle out an operator charging £3 single by charging 50p instead, it would take you years to be able to lift fares up to that original 'market value' - meaning operators would need to think long and hard and do their sums.

I think COVID and the multi year recovery that will need to follow for the industry will keep most big operators likely to consider such moves in check as they'll be working on existing bonfires, not starting new ones - but I would say even before COVID that it had become less prevalent.

For example thinking of recent incursions when Lothian marched west with LCB they didn't really "have a go" on price to my knowledge? In fact the opposite, they were constantly called out on here for offering what people viewed as less attractive multi-journey tickets.

Their USP was what, slightly different routes, largely based on ones that First themselves had given up or no one had tried before?

They haven't achieved a USP with the fleet either - typical for Lothian it's nice, well equipped and well presented - but First have finally improved that area (well subjective use of Streetlites aside) so no USP to your regular Johnny Punter there either.

I guess the question is how would a new operator grab attention otherwise, I think the answer is it's a declining industry and sadly for that reason I don't think it's going to be the problem it was historically any time in the future.
 
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CN04NRJ

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Should we perhaps consider prohibiting this sort of "loss leader" competition as anticompetitive in law, as it is pretty much always of disbenefit to the customer in the long-term, because it just results in the same situation of a monopoly, just by a different operator?

NAT Group's offering against Cardiff Bus started off very strongly - capitalising on the poor reliability and lack of investment on two of CB's busiest two routes (the 17/18 City Centre - Ely and 57/58 City Centre - Pontprennau). Started off with brand new Optare Metrocities in May 2015 and were upgraded to 67 plate Citaros in September 2017. Been a while since i've spent any more than a few days in Cardiff but I understand they use a selection of different buses on there now.

When I worked at CB they took quite alot of custom off us on those two routes for quite a while - though now I understand the trend has reversed since the takeover of NAT Group by Comfortdelgro.

May I also mention Lothian's venture into West Lothian with Lothian Country Buses..... *runs and hides*
 

cnjb8

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Yourbus established quite a few competitive services against TrentBarton and Nottingham City Transport to supplement their contracted services. When the tram extension through Beeston and Chilwell arrived, that killed off the competition against NCT, so they went for Arriva Derby.
The competition itself didn't really help the average passenger. Yourbus ceased to exist in October 2019
 

MotCO

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For instance, if McD's opens up next to Burger King they don't sell Big Macs for 50p until Burger King folds, rather they give some initial offers then rely on customers preferring their approach to the other's.

I think the key difference between McD and buses is that there are more customers for fewer products. i.e. McD's menu is fairly restricted - that is burgers or chicken plus chips, with various embellishments - but it attracts a lot of custom, but for buses, there are usually many routes but not enough customers for two competitors.
 

Ken H

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If I were to start a bus service, I would look for weaknesses in the existing operator. Like a bus that goes on a wander round a housing estate rather than quickly going down the main road. Start with smallish buses and be prepared to upgrade as demand grows. Maybe even only serve a selection of stops. Passengers value time and may like the quicker service.
 

Robertj21a

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If I were to start a bus service, I would look for weaknesses in the existing operator. Like a bus that goes on a wander round a housing estate rather than quickly going down the main road. Start with smallish buses and be prepared to upgrade as demand grows. Maybe even only serve a selection of stops. Passengers value time and may like the quicker service.
Half the passengers will be OAPs with passes. Most won't be bothered by a few minutes.
 

mjc

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I think the key difference between McD and buses is that there are more customers for fewer products. i.e. McD's menu is fairly restricted - that is burgers or chicken plus chips, with various embellishments - but it attracts a lot of custom, but for buses, there are usually many routes but not enough customers for two competitors.

More than that, the two factors that are more crucial for buses but not fast food are location specificity and regularity.
There are two main operators local to me. I might prefer D&G to First, but as D&G don't come near my house I will very rarely use their service, the only custom they will get from me is if I happen to make a journey they cover or they take over (or duplicate) First. But even then, that leads into the second issue, the most cost effective way for most (non-concessionary card) passengers is returns/day/season tickets, so even if D&G duplicate on my local route I'd stick with First who my weekly ticket is with until D&G offers at least the same frequency and value. Buying a McD today has no impact on my choice of fast food tomorrow (yes there's the coffee loyalty card but that's fairly low value compared to sunk cost of a week/month season ticket).

Half the passengers will be OAPs with passes. Most won't be bothered by a few minutes.
But the people who value their time more may be the non-pass customers, but you've got to weigh up the economics, if you don't pick up the 10 people from the estate, can you woo at least the same number of extra customers on the more direct point-to-point journey?
 

Ken H

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...


But the people who value their time more may be the non-pass customers, but you've got to weigh up the economics, if you don't pick up the 10 people from the estate, can you woo at least the same number of extra customers on the more direct point-to-point journey?
its not just the time. the angst of having your bus meander round rather than getting on with it will wind some up - so they will drive.
 

Bletchleyite

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its not just the time. the angst of having your bus meander round rather than getting on with it will wind some up - so they will drive.

The irony of bus operation is that what you want to do to compete with the car (fast services via the main road) conflict with what you need to do for inclusivity (slower services wandering around estates), and it costs too much to have both.
 

Ken H

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The irony of bus operation is that what you want to do to compete with the car (fast services via the main road) conflict with what you need to do for inclusivity (slower services wandering around estates), and it costs too much to have both.
This is true. and much of the time the bus people are chasing subsidy too. But direct buses do work. the Leeds - Harrogate - Ripon 36 just goes down the main road*. the suburbs are served by other local routes.

*Yes I know it uses Chapletown/Harrogate Rd rather than the A61 Scott hall road in leeds, but then it always has done, I think.
 

43055

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Yourbus established quite a few competitive services against TrentBarton and Nottingham City Transport to supplement their contracted services. When the tram extension through Beeston and Chilwell arrived, that killed off the competition against NCT, so they went for Arriva Derby.
The competition itself didn't really help the average passenger. Yourbus ceased to exist in October 2019
I found Yourbus better than Arriva when I used them a few times. They have left some good frequency increases trentbarton's Ilkeston Flyer and H1 after the competition on those routes.
 

Megafuss

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True competition is only truly needed where you have a complacent incumbent operator running busy buses on routes where frequencies should be increased, leaving room for a new player to provide more buses.

Everything else is just "playing buses" by transport professionals that should know better.
 

Flange Squeal

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On the subject of competition offering more direct journeys, it seemed to pay off for Lynx in 2015, when they launched their first route between Kings Lynn and Hunstanton. Stagecoach's Norfolk Green already operated every 20 minutes over the corridor, plus Coasthopper services, with Lynx offering just one per hour. Their unique selling point seemed to be avoiding the hospital and traffic congestion that caused, instead taking a more direct route similar to motorists. Within a year they had not only doubled it to half-hourly but also started a third bus per hour over a slightly different route, so now themselves running three buses per hour between the towns. While I'm sure not just a direct result of this one competing route, Lynx had also won a few tenders from Stagecoach and within three years Lynx were now running much of Stagecoach's former Kings Lynn area network, after Stagecoach closed their depot in the town.
 

Jozhua

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My key issue is that infighting between operators doesn't do much to actually improve service, often it makes it worse overall. Short of breaking the laws of physics, there isn't much that an operator can actually change about their services compared to another.

The real competitor to a bus service is not other companies, but the car, which has a far larger percentage of modal share. Bus operators and other public transport modes shouldn't be competing with each other, but competing with private road vehicles to provide a more convenient journey.

The irony is that a rail system, for example, is designed to carry a very large number of passengers more cost effectively than a bus. Yet often passengers are punished for changing between these modes (say get the bus to the centre of their town, change to rail into the city), so will stick with one to save money, despite the journey being longer.
Yourbus established quite a few competitive services against TrentBarton and Nottingham City Transport to supplement their contracted services. When the tram extension through Beeston and Chilwell arrived, that killed off the competition against NCT, so they went for Arriva Derby.
The competition itself didn't really help the average passenger. Yourbus ceased to exist in October 2019
I remember Yourbus' service, as I used it occasionally. They had the (I believe) Y4 that followed a virtually identical route to the Indigo. I tended to use the Indigo more because the Yourbus savings were marginal (especially as I had a young person's Mango) and I could change onto other Trent Barton services as part of my trip, without being too financially punished for it.

The Indigo had a few standing at rush hour, but was never that busy because it wasn't nearly as fast as the A52, especially when getting stuck in traffic on Derby road in Chadderton.

The irony of bus operation is that what you want to do to compete with the car (fast services via the main road) conflict with what you need to do for inclusivity (slower services wandering around estates), and it costs too much to have both.
What should really be done is to have local buses that link with express buses (or rail), and other local buses, making sure to facilitate less than 10-15 minute transfer times (using pulse/tachtbahn scheduling if necessary.)

I don't think it does cost too much to do both, because in many cases we already are. It is just that they are poorly integrated with each other.
 

cnjb8

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I found Yourbus better than Arriva when I used them a few times. They have left some good frequency increases trentbarton's Ilkeston Flyer and H1 after the competition on those routes.
To be fair they were an alright operator, they invested in new vehicles regularly but they tried to compete in the already crowded and quite well served Nottingham and Derby areas.


Here is a blog post that summarises the initial attack from yourbus on TrentBarton
I've been trying to find a blog post I read once that compared them to Premiere and then predicted that yourbus would collapse because of how similar they were, I'll keep trying to find it because I've explained it really poorly.
 

JamesT

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Oxford seems to manage to have Stagecoach and Go-Ahead coexist fairly well. Though there have been periods on busy routes where they played silly buggers (e.g. sending two double deckers out in front of the competition to Hoover up the passengers). It did help that a few years ago the council sorted out ticketing so you can buy passes valid on both companies, though both have slightly cheaper single company passes too.
 

MotCO

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On the subject of competition offering more direct journeys, it seemed to pay off for Lynx in 2015, when they launched their first route between Kings Lynn and Hunstanton. Stagecoach's Norfolk Green already operated every 20 minutes over the corridor, plus Coasthopper services, with Lynx offering just one per hour. Their unique selling point seemed to be avoiding the hospital and traffic congestion that caused, instead taking a more direct route similar to motorists. Within a year they had not only doubled it to half-hourly but also started a third bus per hour over a slightly different route, so now themselves running three buses per hour between the towns. While I'm sure not just a direct result of this one competing route, Lynx had also won a few tenders from Stagecoach and within three years Lynx were now running much of Stagecoach's former Kings Lynn area network, after Stagecoach closed their depot in the town.

But wasn't Stagecoach also unhappy with the financial returns in Norfolk and decided to leave anyway? Probably a case of six of one and half a dozen of the other.

Slightly OT, but Lynx have just bought two new E400's. https://www.route-one.net/deliveries/lynx-takes-two-new-alexander-dennis-enviro400s/

West Norfolk operator Lynx has taken delivery of a pair of Alexander Dennis Enviro400 double-deckers. It will use them on its Coastliner 36 route, which runs between King’s Lynn, Hunstanton, Wells-next-the-Sea and Fakenham.


Each bus seats 76 and is 11.5m long. The Enviro400s’ interiors are branded with the Lynx name and they each have glazed skylights, a luggage rack, tables, USB charging points and bespoke seat moquette.


Says Lynx Managing Director Julian Patterson: “We are delighted that these new buses are now in service. They will be a great addition to our fleet as we continue to develop our business further and deliver even more for our customers.”


Adds Alexander Dennis Retail Sales Director Richard Matthews: “We would like to thank Lynx for this first order with us. These new buses will deliver a high standard of comfort and reliability for its customers and we look forward to working with Lynx again in the future.”
 

Deerfold

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I found Yourbus better than Arriva when I used them a few times. They have left some good frequency increases trentbarton's Ilkeston Flyer and H1 after the competition on those routes.
There are quite often massive frequency increases with competition. When the competition ends, occasionally some increase remains long term - the Flyer and H1 are, sadly, in the minority.

My sister lived on a road with a 10-minute service (plus another trip an hour on a slower route). A bus war in the 90s upped the combined frequency to 18 buses an hour. After the competition was withdrawn she briefly had a 7/8 minute service before it dropped a couple of years later back to every 10 minutes (with a worse evening service than before the bus war began).
 

Flange Squeal

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But wasn't Stagecoach also unhappy with the financial returns in Norfolk and decided to leave anyway? Probably a case of six of one and half a dozen of the other.
I believe so, yes - hence adding I doubt their decision was just down to the one competing route. It may have been interesting know if the same decision would’ve been made had another operator not come in, first with a competitive route, then began winning some of their tenders at renewal. Could this have destabilised the business further? 2015 saw them begin the rebrand to main Stagecoach livery, and 2016 a fleet of brand new Enviro 200MMCs delivered in a new Best Impressions Coasthopper brand, so it seemed they still felt a desire for investment fairly close to the end, unless that was just a last ditch attempt knowing the vehicles could be cascaded elsewhere if it all failed.
 

cnjb8

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I believe so, yes - hence adding I doubt their decision was just down to the one competing route. It may have been interesting know if the same decision would’ve been made had another operator not come in, first with a competitive route, then began winning some of their tenders at renewal. Could this have destabilised the business further? 2015 saw them begin the rebrand to main Stagecoach livery, and 2016 a fleet of brand new Enviro 200MMCs delivered in a new Best Impressions Coasthopper brand, so it seemed they still felt a desire for investment fairly close to the end, unless that was just a last ditch attempt knowing the vehicles could be cascaded elsewhere if bit all failed.
Didn't First also withdraw from Kings Lynn?
 

CBlue

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Stagecoach didn't do themselves any favours in Lynn by trying to remotely run everything from Cambridge, which had issues of its own at the time with fleet reliability.

A fair number of elderly Olympians were drafted in for schools contracts but found themselves working all day in service, which did quite a good job of putting off passengers - Lynx getting involved and trying to nudge them off the Hunstanton route certainly didn't help the finances.

The E200MMCs purchased for Coasthopper were quickly replaced on the route by an order of Optare Solo SR's as their additional length was found to cause problems on some stretches of the route.
 

Flange Squeal

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Didn't First also withdraw from Kings Lynn?
They did, yes. I believe First’s Kings Lynn operations passed to the then still independent Norfolk Green in 2011, with Stagecoach acquiring Norfolk Green a couple of years later.
 

M803UYA

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Stagecoach didn't do themselves any favours in Lynn by trying to remotely run everything from Cambridge, which had issues of its own at the time with fleet reliability.

A fair number of elderly Olympians were drafted in for schools contracts but found themselves working all day in service, which did quite a good job of putting off passengers - Lynx getting involved and trying to nudge them off the Hunstanton route certainly didn't help the finances.

The E200MMCs purchased for Coasthopper were quickly replaced on the route by an order of Optare Solo SR's as their additional length was found to cause problems on some stretches of the route.
Stagecoach didn't try to run remotely, they did just run it from Cambridge. From the takeover they stopped the new vehicle investment which was a feature of the Norfolk Green operations (alongside it's very local management)and instead transferred in financially end of life vehicles from elsewhere in the group in a lovely new livery, as new liveries automatically make people jump aboard the bus.
The same approach was tried when they bought Cooks Coaches in 2007 - immediately starved of investment, instead making use of cascades, which for a primarily 16 seater minibus operation was difficult.
There was an earlier spat with Lynx over the winter Coasthopper route which was retendered later in 2015 and Lynx won that. After buying more Tempo's in Stagecoach, suddenly decided the Coasthopper service was commercially viable after all and declared the route commercial. That left Lynx with more buses than they needed but they were able to find other places to run these vehicles thanks to the highly competent remote management of the former Norfolk Green business from Cambridge.
For a group with such a good 'reputation', Stagecoach seem to have a blind spot when it comes to taking over large independent operations. When it comes to former National Bus Company subsidiaries and municipal operators there is a well organised strategy deployed to remove overhead costs within the first few months of taking over. The same can be applied to Go Ahead - again, not a great record of success with taking over independents as can be seen in East Anglia or their adventures in the West Midlands.
The former Konectbus directors established Lynx after leaving Go Ahead employment.
 

Jozhua

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I'd say that privatisation of buses has likely been a failure, considering declining ridership in everywhere but London (where they are mostly publically controlled).

Even during the peak of rail "privatisation", services were never as fragmented as what we see on the bus network today.

This isn't to say every company is terrible, Trent Barton are pretty good, but besides sensible fare payment and decent buses, there isn't much to compete on. Even using Trent Barton becomes less convenient if you need to change to another operator, as there is no cross-ticket acceptance. The acceptance of Mango on NET is pretty good tho, although I think Trentbarton have killed Mango now (don't know - no longer live in Derbyshire)
 

cnjb8

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I'd say that privatisation of buses has likely been a failure, considering declining ridership in everywhere but London (where they are mostly publically controlled).

Even during the peak of rail "privatisation", services were never as fragmented as what we see on the bus network today.

This isn't to say every company is terrible, Trent Barton are pretty good, but besides sensible fare payment and decent buses, there isn't much to compete on. Even using Trent Barton becomes less convenient if you need to change to another operator, as there is no cross-ticket acceptance. The acceptance of Mango on NET is pretty good tho, although I think Trentbarton have killed Mango now (don't know - no longer live in Derbyshire)
Now Trent use contactless machines, so Mango can't be accepted on NET anymore due to the machines being different.
 

carlberry

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I'd say that privatisation of buses has likely been a failure, considering declining ridership in everywhere but London (where they are mostly publically controlled).

Even during the peak of rail "privatisation", services were never as fragmented as what we see on the bus network today.
Buses in London are also privatised. Buses outside London are deregulated, those in London arnt so on road competition isnt possible (other than with car, Uber and Taxi). Ridership in London is now declining as well; partly as the subsidy levels reduce (subsidy outside London is minimal or none existent depending on each county council).
 
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I visited Buckinghamshire recently to try the Arriva/Redline bus war on the High Wycombe-Aylesbury corridor. Both companies are using a random assortment of buses with Redline undercutting Arriva. The most absurd part of it is that you have Arriva running every 15 mins daytime on their 300 service and Redline with a 20 min freq on their 130 service. Thankfully the Intalink Explorer ticket is now also valid on the red group ops outside Hertfordshire which solves the ticketing problem. It doesn't really make sense to me to be competing on a not very lucrative corridor with such a high frequency and only competing on price. Surely this won't last long.

300 timetable: https://bustimes.org/services/300-bus-station-to-bus-station?date=2021-05-10

130 timetable: https://bustimes.org/services/130-aylesbury-princes-risborough-high-wycombe
 

Deerfold

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The most absurd part of it is that you have Arriva running every 15 mins daytime on their 300 service and Redline with a 20 min freq on their 130 service. Thankfully the Intalink Explorer ticket is now also valid on the red group ops outside Hertfordshire which solves the ticketing problem.
Just don't expect Arriva to accept the Explorer if you buy it from Redline.I had so many problems with Explorer tickets being accepted round High Wycombe because I'd bought from Carousel. Arriva Twitter and Customer services confirmed validity but senior staff at High Wycombe agreed with drivers.
 
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