Now that the inevitable seems to have happened, what are the consequences of the Competition Commission ruling that Stagecoach shall sell its Preston Bus operation to reintroduce competition in the city?
1. Who will buy?
- How would you easily untangle Stagecoach & Preston Bus into something that is a meaningful purchase? Services are now intertwined, including swapping work between garages.
- Would any existing operator chance their margins against a formidable adversary such as Stagecoach?
- Who locally might take this on? Perhaps Transdev Blazefield, as the nearest. Blazefield has taken Stagecoach work before but under very different circumstances. Preston is not like Bournemouth. Perhaps even Arriva is further away, is this likely? As for small operators, Blue Bus is probably a non-starter and certainly conservative Fishwick’s wouldn’t even give it a second thought. There are no other growing independents in the area. This leaves operators such as Centrebus, Veolia or Rotala.
- No smaller operator has yet succeeded in competing in Preston, in the longer term.
- What are the lessons from down the road Liverpool? When Arriva was directed to divest in Merseyside, it took considerable time and a false Go Ahead start before Stagecoach bought Gilmoss.
- Will passengers lose network benefits (network tickets, co-ordinated timetables, vehicle quality, stability, timetable changes on one date)?
- Could network benefits be protected with some yet firmer, stronger and more robust Stagecoach guarantees?
- Could a statutory quality partnership have improved passenger services while retaining a monopoly?
- Would any two competitors enter into a partnership or even a quality contract, in any case?
- If Preston’s market couldn’t easily support two operators, can it now? What has changed? Preston Bus was reported as in trouble even before Stagecoach competition. Though Preston Bus was turning around years of under-investment, the Stagecoach situation’s now improved investment markedly.
- Remember how industry watchers viewed Preston competition during its long two years? It was seen as among the worst excesses. So much so, in fact, the traffic commissioner brought in Lancashire council to devise a set of rules. This, you may recall, was to ensure that deregulation didn’t come toppling down. Will these measures be needed again, including monitoring?
- … Preston Bus and Stagecoach didn’t compete at all, which was effectively monopolistic. But that’s ancient history.
9 comments:
I think the CC should have taken a more pragmatic view, noting that its not the best of worlds, but in the end the passenger is the winner.
To me it seems like the CC have decided that some mythical compitition should exist and thats that - more like a child throwing its toys out of its pram rather then a considered approach.
So what we will have is a period of inertia with Stagecoach trying to untangle everything waiting for some unknown white knight coming in and taking on the great beast of Stagecoach, which most people in the industry cant really see happening.
The ending result is a complete mess - well done CC.
If the CC had taken a pragmatic view as Industry Watcher suggests, they would have essentially been letting Stagecoach get away with a slap on the wrist, despite the evidence in their report of questionable tactics from the beachball camp. And that could have been a green light for other PLCs to flex their financial muscle by driving the competition off the road through sustained operation of competitive services that aren't covering their costs.
I only wish the figures weren't redacted - it looks like there is some juicy stuff in that report!
Surely, it can only be Transdev (or is it now Veolia-Transdev?). Nobody else is going to be bothered - too far away from anyone else's territory and too much likely hassle from Stagecoach.
Seems odd that the CC are effectively seeking to restore an effective momopoly to Preston...
Trouble is, successive governments seem to want competition, only just so long as there are no winners or losers...
So Stagecoach is a monopoly in Preston. It doesn't have a monopoly as any other operator can set up business there. The situation is no different to Stagecoach's position in, say, Exeter or Cheltenham.
As Observer notes, if Stagecoach are forced to sell to someone else that operator would have a monopoly as Stagecoach would probably be prevented from competing.
All these endless enquiries are doing nothing for the busindustry or the passengers. What happens if no-one wants to take over in Preston?
Why doesn't Stagecoach create an brand new stand-alone company just to buy the parts it is told to sell,or for that matter, anything else?
Did the CC ask the passengers in Preston what they have to say about all this ?
Form a new company . . . like Cawlett / Southern National did with Dorset Transit during the Weymouth "bus war" in 1996, so that they stayed on the lucrative route to Portland
When forced to divest part of Scottish Citylink/Megabus, Stagecoach found a 'suitable' buyer in Parks of Hamilton, effectively maintaining the status quo.
I wonder if they can find an equally suitable non-adversorial buyer in Lancashire?
Does this mark the death of dereg ?
Market forces when it suits, big stick when it does not ?
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