Reductions to services prior to an eventual withdrawal

[F262YTJ]

I've been intrigued by this thread and its intelligent and informed posts.

One point that I feel has been missed is that bus companies appear to have a standard pricing policy, especially large groups. In my experience, as a driver and trade union representative over 28 years, is that routes have suffered because of fare rises therefore losing footfall to other modes such as taxis because the company has priced itself out of the market.

We all understand that the industry has to react to be commercial therfore the bottom line is to make a profit. Most companies hide behind the hallowed day or weekly tickets as their bargain/ promotional offer but why don't they adopt a strategy like most supermarkets and retailers do by pricing route by route?

I have found in the town where I live the service has shrunk massively since before covid. It had a steady fleet of between 65 and 70 buses for many years butthis is now down to a shade over 40. Surely this level of decline cannot be sustained.

My experience with customers is that local taxis are the same/cheaper but more importantly more convenient because
1. They provide a door to door service,
2. Frequencies have been slashed and
3. Reliability because of operational issues.

Why don't operators seem to look at each route individually and price accordingly, such as route X has a ceiling price of £1 whereas route Y commands a premium so we can charge £2, for example, because of the differing demographic. Supermarkets do this all the time selling a tin of beans for say 80p in one ara or 95p in another. By doing this they make their product affordable thus selling more.

 

[howstaff]

I've been intrigued by this thread and its intelligent and informed posts.

One point that I feel has been missed is that bus companies appear to have a standard pricing policy, especially large groups. In my experience, as a driver and trade union representative over 28 years, is that routes have suffered because of fare rises therefore losing footfall to other modes such as taxis because the company has priced itself out of the market.

We all understand that the industry has to react to be commercial therfore the bottom line is to make a profit. Most companies hide behind the hallowed day or weekly tickets as their bargain/ promotional offer but why don't they adopt a strategy like most supermarkets and retailers do by pricing route by route?

I have found in the town where I live the service has shrunk massively since before covid. It had a steady fleet of between 65 and 70 buses for many years butthis is now down to a shade over 40. Surely this level of decline cannot be sustained.

My experience with customers is that local taxis are the same/cheaper but more importantly more convenient because
1. They provide a door to door service,
2. Frequencies have been slashed and
3. Reliability because of operational issues.

Why don't operators seem to look at each route individually and price accordingly, such as route X has a ceiling price of £1 whereas route Y commands a premium so we can charge £2, for example, because of the differing demographic. Supermarkets do this all the time selling a tin of beans for say 80p in one ara or 95p in another. By doing this they make their product affordable thus selling more.

This isn't an area I've much direct experience in, so I've flicked through the relevant sections of Applied Transport Economics by Stuart Cole (written 1987!) and Transport Economics 2nd Edition by Kenneth J Button (written 1982!) - I suspect there will be more modern sources with a greater emphasis on this as it's certainly become more prevalent in time, but these are the best of my own collection and a decade or so ago were well regarded when I was at university! An interesting question though, and not one I've considered in much depth until now.

Personally, I think the answer to "why don't bus operators vary prices in different areas like supermarkets do" sits somewhere between "they do" and "it's not worth it".

It's important to consider both how this is done and how a customer interacts with it. Firstly, supermarkets have vastly more involvement as this is such a huge thing for them, their price sensitive customers can swap easily to a competitor, and so there's a lot of (semi-automated & technologically advanced) back-office capability for it. Secondly, there's much less involved in changing prices in a supermarket, because the legions of staff don't need training, as there's helpful labels on the shelf (which can be changed overnight without much fuss), and the tills have all the information to hand both for transactions and looking up queries. From a customer point of view, they can wander around without time pressure lamenting "these beans are a bit much, we'll get them from Aldi next time" or "these beans are a bit much, we'll get some from Aldi on the way home" at their leisure, there's no need to know prices in advance or work out what is best value for them, as they can adapt as they go.

This doesn't really apply to the bus industry, there isn't the huge competitive angle as the head-to-head competition is minimal, and alternative modes have sunk costs (if there's a car on the drive that's taxed, insured and MOT'd may as well use it) that set people into clear habits. In terms of changing the prices too, it's far more deliverable to maintain good publicity (adverts on the side of buses, at stops, etc) and colleague knowledge ("are you coming back this way later - you'd be better off getting a RouteRider instead") with a stable offering. Likewise customers want to know in advance their plans and prices, they won't get on the bus to "browse" and make their mind up like they would in a supermarket, so there's rightly an emphasis on that simple to understand and stable offering.

That simplicity is what drives the compromise reached, in that the differences between towns and regions rather than areas within towns are what is considered, but then that isn't so far off the supermarket model - it's not like every suburb has a full size supermarket from each chain. Many bus operators do have a "local" fare in particularly sensitive areas, then a "town" fare throughout their urban networks and potentially a "go anywhere" fare that covers interurban, rural and adjacent towns, which gives a good compromise without getting into too complex an offer. There have been cases of route based fares and of tiered networks but they don't tend to last, so I'd assume those involved in them found them to be a mix of the below...

• Simply not revenue generative enough compared to a standard zonal or flat fare
• Unattractive to the customer (e.g. a route week ticket is 50p cheaper than a town week ticket for the regular commute, but then for the occasional trip to the relatives/hospital/cinema/etc you're ending up paying more overall)
• Too complex to manage (e.g. that annual RPI rise suddenly became more of an undertaking!)
• Too complex to deliver (e.g. drivers unable to stay on top of validity and pricing)
• Too complex to communicate (e.g. customers settle for that taxi after all because even though there's a cheaper bus option, they can't find it)
• Politically controversial (e.g. "why does the poorer ward next to mine get both more services and lower fares" or "so you have specific offers for this tendered route but why not this commercial one")

As technology improves we're probably getting closer to being able to counteract some of those challenges. Slipping in promo tickets is far simpler when they're sold on an app with ticket machines that can accept/reject correctly, compared to Stan & Jack having to work it out from a 100 page fare guide. Porting a sociodemographic pricing system from beans to buses may be simpler for a startup and a big operator than it was a decade ago. I'm still sold on whether more depth to pricing is overall worthwhile, but potentially yes there may be cases it would make a difference and warrants investigation. Great question F262YTJ.

 

[F262YTJ]

This isn't an area I've much direct experience in, so I've flicked through the relevant sections of Applied Transport Economics by Stuart Cole (written 1987!) and Transport Economics 2nd Edition by Kenneth J Button (written 1982!) - I suspect there will be more modern sources with a greater emphasis on this as it's certainly become more prevalent in time, but these are the best of my own collection and a decade or so ago were well regarded when I was at university! An interesting question though, and not one I've considered in much depth until now.

Personally, I think the answer to "why don't bus operators vary prices in different areas like supermarkets do" sits somewhere between "they do" and "it's not worth it".

It's important to consider both how this is done and how a customer interacts with it. Firstly, supermarkets have vastly more involvement as this is such a huge thing for them, their price sensitive customers can swap easily to a competitor, and so there's a lot of (semi-automated & technologically advanced) back-office capability for it. Secondly, there's much less involved in changing prices in a supermarket, because the legions of staff don't need training, as there's helpful labels on the shelf (which can be changed overnight without much fuss), and the tills have all the information to hand both for transactions and looking up queries. From a customer point of view, they can wander around without time pressure lamenting "these beans are a bit much, we'll get them from Aldi next time" or "these beans are a bit much, we'll get some from Aldi on the way home" at their leisure, there's no need to know prices in advance or work out what is best value for them, as they can adapt as they go.

This doesn't really apply to the bus industry, there isn't the huge competitive angle as the head-to-head competition is minimal, and alternative modes have sunk costs (if there's a car on the drive that's taxed, insured and MOT'd may as well use it) that set people into clear habits. In terms of changing the prices too, it's far more deliverable to maintain good publicity (adverts on the side of buses, at stops, etc) and colleague knowledge ("are you coming back this way later - you'd be better off getting a RouteRider instead") with a stable offering. Likewise customers want to know in advance their plans and prices, they won't get on the bus to "browse" and make their mind up like they would in a supermarket, so there's rightly an emphasis on that simple to understand and stable offering.

That simplicity is what drives the compromise reached, in that the differences between towns and regions rather than areas within towns are what is considered, but then that isn't so far off the supermarket model - it's not like every suburb has a full size supermarket from each chain. Many bus operators do have a "local" fare in particularly sensitive areas, then a "town" fare throughout their urban networks and potentially a "go anywhere" fare that covers interurban, rural and adjacent towns, which gives a good compromise without getting into too complex an offer. There have been cases of route based fares and of tiered networks but they don't tend to last, so I'd assume those involved in them found them to be a mix of the below...

• Simply not revenue generative enough compared to a standard zonal or flat fare
• Unattractive to the customer (e.g. a route week ticket is 50p cheaper than a town week ticket for the regular commute, but then for the occasional trip to the relatives/hospital/cinema/etc you're ending up paying more overall)
• Too complex to manage (e.g. that annual RPI rise suddenly became more of an undertaking!)
• Too complex to deliver (e.g. drivers unable to stay on top of validity and pricing)
• Too complex to communicate (e.g. customers settle for that taxi after all because even though there's a cheaper bus option, they can't find it)
• Politically controversial (e.g. "why does the poorer ward next to mine get both more services and lower fares" or "so you have specific offers for this tendered route but why not this commercial one")

As technology improves we're probably getting closer to being able to counteract some of those challenges. Slipping in promo tickets is far simpler when they're sold on an app with ticket machines that can accept/reject correctly, compared to Stan & Jack having to work it out from a 100 page fare guide. Porting a sociodemographic pricing system from beans to buses may be simpler for a startup and a big operator than it was a decade ago. I'm still sold on whether more depth to pricing is overall worthwhile, but potentially yes there may be cases it would make a difference and warrants investigation. Great question F262YTJ.

Thank you for your very thorough reply and opinion.

I do feel bus companies are missing a trick now especially as most use systems such as Ticketer where they can harvest information more or less live. I appreciate there are forces which are unpredictable daily such as the weather but in general they can have an excellent knowledge of average ridership. Ticketers also have the capability of harnessing 100% of passengers through the door thus providing local authorities with accurate information for pass payments, whereas in the past many companies will have been short changed by agreeing blanket payments.

 

[Dai Corner]

An aspect of fare policy I find interesting is the general lack of peak/off-peak pricing, in contrast to the railways.

Bus operators have higher costs in the peaks such as more vehicles on the road to maintain frequencies as well as passengers who have no choice but to travel at those times.

 

[Deerfold]

An aspect of fare policy I find interesting is the general lack of peak/off-peak pricing, in contrast to the railways.

Bus operators have higher costs in the peaks such as more vehicles on the road to maintain frequencies as well as passengers who have no choice but to travel at those times.

It seems to have withered away somewhat.

In the 80s in West Yorkshire there was a maximum bus fare in the peaks (30p is the earliest I remember it being, around half to a third the fare for going all the way on most routes) and day tickets for bus and train weren't valid 1530 - 1800. There was also an off-peak weekly bus ticket for a while (something a few PTE areas had).

One by one the private operators dropped the maximum fare but kept a morning peak variant on their own day tickets.

The countywide tickets dropped the peak restrictions on bus tickets and the evening peak on bus and train tickets.

However a peak restriction was re-added to afternoon rail journeys.

More recently most operators have dropped all peak differences on their day tickets and a peak rail and bus ticket (as a much higher price) has been introduced.

So now, all day bus tickets have no peak restrictions whilst off-peak bus and rail tickets aren't valid at all before 0930 or for trains that depart between 1600 and 1830.

It used to be quite annoying as I used to get a bus about 0915 once a week and would have to pay for a peak day ticket. It was a crowded bus with many ENTCS uses on it, which were valid from 0900 in North Yorkshire, a few stops before reaching me.

It feels like First are sabotaging routes at the moment. In Halifax there's no official source (First's own website or Metro's) for buses on the 590/1/2 for the new timetable that stated yesterday. Weekend times are up on the First website, as are the out of date ones for no obvious reason (almost every bus has been retimed).

 

[TheGrandWazoo]

Could we see the difference in these attitudes in First (Southampton) versus Bluestar? The former appeared to run down the service while the latter, one year in, have made no cuts yet and if anything are increasing frequency on some routes. Under Bluestar we've also seen introduction of vehicles to some routes at peak times to maintain the off-peak frequency, which is very much against the beancounter outlook on life.

I think you're being a bit oversimplistic in this.

It's highly unlikely that Bluestar would be making many reductions. They've won the war and eliminated their main competitor so they would have more passengers anyway. Remember that they also introduced the replacement services (and introduced a few later journeys too) and whilst the 13 was increased to half hourly, the 3 (now 19) was reduced from 10 mins to 15 mins on a weekday, 12 mins to 20 on a Saturday, and 20 mins to 30 on a Sunday.

The other thing is that you have the £2 fare and that is generating additional patronage.

However, Go Ahead is still a very tightly run business but GSC is very well run and has managed to oust its two largest competitors in Southampton and Bournemouth.