OB: Your Barbie livery remains unpopular among the enthusiast community. How accepted do you feel is this livery among passengers, especially the group at which the livery seemed targeted—middle aged women?
LD: Well of course enthusiasts are not our target market! Our passengers are entirely pleased with the livery—inside and out and after many years now of consistently delivering it there is excellent brand awareness. In fact, we did some research with a bus in all-over white with just a smudge of our other two colours and a very high proportion of those asked recognised it as First. That is remarkable.
A couple of years back I did change the seat moquette. The old design was actually left- and right-handed and was a real nuisance to keep presented correctly. Furthermore, when we put new vehicles into service replacing ones with identical trim, there was a low recognition of our new investment. The seat moquette change was accomplished at zero cost but passengers became aware there was ‘something different’ and recognition of it being a new bus went up. (Incidentally, the moquette was an existing rail design).
The ‘swoosh’ on our buses is a very popular element of our design and I have recently made sure it is used elsewhere. You will see it on our timetable leaflets and on other printed material now.
OB: First has embraced articulated buses like no other. You obviously feel that bendy buses have a part to play in offering greater low floor access and alternatives to double deck problems. Why is First seemingly so pleased with artics when Londoners, for example, are not? Would you say that ftrs have been a success? And is there room in your fleets for some of the ex-London Citaros?
LD: We consider articulated buses to be another tool in the box and that they have their place. They are very efficient people-movers, have speedy loading, and very many more seats on the flat floor than on a double-decker.
Perhaps, on reflection, the last two or three conversions in London which increased the numbers in and around the West End got them into too much trouble. On the radial services (we run the 18 along the Harrow Road and 207 along the Uxbridge Road) which are major radial corridors, they have been fine.
Our London Citaros are on operating leases which means we can return them at the end of the contract with no further obligation. That time is a little way off, so no need to decide yet.
ftr has delivered a growth in passenger numbers on all three services, especially in the first year of introduction. Do also remember ftr is a collection of innovative ideas all boxed up together – layout, information, etc. It also delivers rapid transit characteristics for a fraction of the price of light rail and in a fraction of the time.
OB: How can Big Five operators improve the performance of less profitable rural operations such as First Devon & Cornwall—without making wholesale cuts?
LD: In many areas, rural routes are being adopted by smaller operators who have a lower cost base than the big operators’. They are able to satisfy the demand locally and it is one of the strengths of the industry that there are good small operators as well as big ones.
Our brand has a common standard and we don’t have a ‘low cost’ version of it. That means we don’t have companies with no proper pension scheme, one shirt and one tie as a uniform issue, and a map to guide your way.
We are driven by our values of safety and customer service and we believe that if we deliver a consistently good product we will get growth.
OB: Plymouth looks set to become a major challenge for you, perhaps in the same way as was Chester, only in reverse. Is Plymouth an example of where quality contracts might benefit both passengers and operators or should you and the winner of the Citybus sale just slug it out? Do you feel that there will be a more widespread adoption of quality contracts or statutory partnerships elsewhere, in the future?
LD: Very funny how some people are never satisfied. It is sometimes suggested there is no competition in the market and the passenger suffers poor service and high fares. When there is very visible competition, with frequent services and other initiatives to stimulate demand the press calls it ‘bus wars’ and calls for regulation!
The industry is facing a move towards more contract-oriented operations—there are Quality Contract proposals being brought forward even though if the Conservatives win the next election they have pledged to abolish them. The reputable consultancy TAS has just published a report in which they predict that if services are secured in future by a more contract-related mechanism, fares could rise to higher levels than they are now.
There is a feeling from some members of the community that somehow bus services (and rail for that matter) are utilities which should be under public control. However, there are those local authorities who have never managed to sort out their existing public services and obligations so adding another one doesn’t seem attractive. And, if I may borrow the quote, you won’t make water flow uphill just by regulating it.
OB: Aside from closing Orpington upon the loss of contracts, First has never backed away from any of its subsidiaries. Compare this strategy to Stagecoach. Under what circumstances might First divest and why hasn’t it done so to date?
LD: We have sold some businesses when the time, the price and the conditions were right: our share in Bristol Airport, New World First Bus in Hong Kong, for example. Orpington was an island in south London when all the rest of our business was in the north and in the London regime, you go with wherever your contract results take you.
We want to grow our business so we’re not generally in the game of disposing of core activities.
OB: First is amalgamating operating subsidiaries in a move to cut back office costs. Go Ahead, on the other hand, generally wishes to retain a management structure that focuses on smaller operating subsidiary units. Go Ahead’s argument is that this leads to greater profitability. Why has First decided to go with its strategy rather than Go Ahead’s?
LD: Well, don’t forget we are big urban operators. We are in all the major UK cities apart from Newcastle and Birmingham (other than in a small way). Go Ahead’s businesses are in smaller areas or regions. Their people generally have done an excellent job in those areas. But we are in the thick of it in the major PTE areas, plus cities like Bristol. Those authorities are themselves working over a wide area so it is useful if we cover the same areas as they do administratively.
We have also merged companies to save backroom costs. With today’s technology and communication, you can run finance, payroll, etc from anywhere. We are saving those costs because we know in the current economic climate the passengers don’t want higher fares (which is the other option).
OB: First prefers a high profile national brand to local ones. When you see successes like Brighton & Hove, Blazefield, Transdev Yellow Buses, etc, do you feel that a strong nationally recognised brand is the best stratagem, and why?
LD: If you walk down your high street the majority of shops you will see are internationally-recognisable brands—supermarkets, fashion, travel agents, and so on.
The public feels comfortable with well-known brands because it carries extra weight. If you were in a strange foreign place and were concerned about being ‘ripped off’ you would gravitate towards Hilton or Hertz because you knew their brand stood for something.
As a result of this strategy, First is now an internationally-recognised brand so it has done its job well. People know we are a major business, that we have high standards and a good reputation. The downside of course is that you can get contamination from one place to another (including between bus and rail) so the answer is always to deliver a great service.
But besides giving all our passengers, internationally, that comfort and security, it also helps us in the seeking out and bidding for new business. Wherever in the world, the Group’s outstanding credentials give us huge advantage. We are the UK’s biggest bus operator, UK’s biggest rail operator, the largest operator of yellow school buses in the USA etc. and this is impressive.
OB: Will you achieve 100 per cent low floor access on all services by 2016/2017?
LD: Absolutely, yes. People often say they expect the Government to relax the DDA requirements given the current economic climate. I am sure they won’t.
Economic theory reminds you that what gets you out of a recession is obsolescence. You have to buy new machinery because the old ones are worn out. The DDA deadline forces you to invest to meet it and I am sure therefore that the Government will hold us to it.
It is also worth reminding ourselves that low floor came before DDA and there are ‘SLF’ buses that are not DDA compliant, which also have to be replaced.
OB: With the introduction of Blue Birds followed by other products, First pioneered a new approach to UK school transport. While the Blue Bird might’ve flown a flag for school transport, why did you chose it, was it the right vehicle and why was it never too popular? Do you anticipate anything concrete coming out of First’s Yellow School Bus Commission? What are the next steps for First Student?
LD: Firstly, let’s be clear that the YSB Commission is an independent body and although we have supported it administratively, we don’t influence its findings.
We are, of course, delighted with its report since it reinforces our own view that, as in the US, dedicated home to school transport is an excellent way to improve safety, the environment and the whole business of getting to and from school. In the US it is ‘in your taxes’ and it is normal for children to get to and from school in this way.
The Bluebird vehicles were chosen since they were the iconic American school bus and because, in their natural habitat, they are very cheap. However, there are significant differences between US and EU regulations which, together with high import tariffs, made the whole business rather more expensive. For our subsequent orders, we chose BMC, which is less iconic but an EU-compliant product and not so expensive.
We continue to believe that safe, dedicated transport for school children is the right way to go and our current efforts are to continue to lobby politicians of all colours to support it.
It’s a tough call. Most school transport is tendered by cash-strapped local authorities and no matter how sincere they are they do have to live within their means. As a result some awards are at very poor rates and you get what you pay for.
The big issue is—if our children are our greatest asset and our future, are we happy carting them around the streets in old coaches? If that is how they learn about public transport then it is not surprising they want to buy a car at the earliest opportunity.
OB: In deference to the prime minister—what is your favourite biscuit?
LD: Without a doubt McVitie’s milk chocolate digestives. My Secretary keeps a constant supply in stock but only lets me have them one at a time! [biscuit, not packet, we assume!]
i Visit the Leon Daniels blog
Monday, 7 December 2009
Omnibuses meets Leon Daniels
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20 comments:
Very interesting interview - thanks.
However I do take issue with Leon's comments about bus wars - implying that the fact that people complain when there is an unregulated First monopoly, but then also complain when there is a bus war, represents some kind of absurd and misguided contradiction. It really doesn't. For an ordinary passenger just trying to travel from A to B as possible, neither is really a satisfactory situation, IMHO.
Enjoyed these interviews, well done to all.
Now Mr Busing, are yoy going to come clean and tell us which biscuit *you* like???
It's all very well that Leon is talking about small operators running where First don't deem it profitable to operate but it's not that when First abandon a service and an independant takes over the running of the service, First then reregister the service to run the independant off of the route. A short while later First decide to cancel the route again.
That's the problem with the big operators, they're not happy when somebody else is making money off of a route which isn't profitable for "the big boys".
I could rant on more about First's policy but I don't want to bore anybody.
Leon's tie in the cartoon of him shows the shades of all the operators who once made up a patchwork of liveries now all bleached by Barbie white........
Thanks for the comment. But just where was the place we did this? I don't recall us running anyone off the road anywhere?
Anonymous said...
It's all very well that Leon is talking about small operators running where First don't deem it profitable to operate but it's not that when First abandon a service and an independant takes over the running of the service, First then reregister the service to run the independant off of the route. A short while later First decide to cancel the route again.
Could anon at 1957 be referring to Western Greyhound Launceston, perhaps?
Could anon at 1957 be referring to Western Greyhoud Launceston, perhaps?
I would agree with Leon that First are certainly not the worst culprit in carrying out the sort of actions that anon 19:57 describes.
It is an interesting point though, when considering the sort of large operator/small operator role division that Leon describes in the interview. I think that in many cases where large operators have retaliated against another operator running a previously withdrawn route, it is not so much out of the kind of jealousy or empire-building that anon implies, but rather that the new operation on the withdrawn route would also abstract from some of the larger operator's other routes.
For instance, if there are two routes, one from A to B via C, and another from A to D via C, and the large operator deregisters A to B but carrys on running A to D, it is highly unlikely that a smaller operator could take up the withdrawn A to B route without encountering a predatory response, as it would also inevitably abstract some of the A to C revenue that the large operator would now regard as 'belonging' to its remaining A to D route.
I guess the underlying problem here is the way that any given bus route is not one discreet market, but a multitude of different, overlapping markets along the length of the route, which only combine to give a viable route when strung together in certain combinations. The A to B route above, for instance, would not be viable without a bit of A to C and C to B revenue as well. But when a large operator decides to 'corner' some of these intermediate flows as part of the kind of streamlined super-profitable core-routes-only strategy we seem to be seeing very widely these days (ie. the A to D route above) it does provide a real barrier to smaller operators, or indeed local authorities, trying to provide for the withdrawn parts in a cost-effective but non-confrontational manner.
Right, sorry to have gone on a bit(!)... but anon's post got me thinking.
There's a few examples of First running Small operators off the road, take for example the Bus War against Chester City Transport, First ran them off the road, also there has been attempts to run operators off the road. In 2000/2001 First started a bus war against Lothian Buses, Lothian Buses came off Best and of course just now there is the Bus war against Plymouth Citybus
First Group aren't the only company to do this though, Stagecoach are guilty of doing similar things.
Very interesting read, thanks Leon for making the effort for our benefit.
In the case of Chester City Transport it was considered that ARRIVA were more guilty of this than First. However since First have taken over the network from CCT and there has been alot of negativity against them locally (I live close to Chester so see and hear alot of the comments), its not helped by some of the cuts they have been making on the network but still I guess things had to change. The battle of Blacon which caused so much debate seems to continue with ARRIVA Cymru showing little resistance to giving up (can they afford to lose face?).
All the big boys are just as bad as each other but its dog eat dog at times. ARRIVA Midlands running Chase Bus Services into the ground with competition and then buying them. Stagecoach NW vs Preston Bus I could go on!
I would be interested to hear Leon's comments regarding First disposal policy of vehicles (scrap policy) and why the group doesn't consider selling some of their vehicles on the second hand market as ARRIVA and Stagecoach do (end of the day, competitors will always get hold of second hand vehicles). A example recently is that First South Yorkshire have scrapped a big batch of Volvo B10B / Alexander Striders, surely the sale to dealers would have generated more funds than scrapping them all?
with regard to Western Greyhound Launceston, the simple facts are first ran the plymouth to callington route comercially and callington to bude was a tendered service, western greyhound won this service, all first are doing is running to launceston 4 times a day, hardly competing with western greyhound is it, its more like the other way around as western greyhound introduced (first were already running to plymouth) a service to plymouth.
anon 10:02
What do you propose WG should have done instead then? Callington is really not much of a destination in its own right. So do you suggest that WG should only have run an obscure Bude to Callington route, depriving the significant towns of Bude and Launceston of their direct and long-standing links to Plymouth and forcing through passengers to make an unguaranteed connection at Callington (and of course pay twice)? Or do you suggest that as First run the southernmost part of the route commercially, only First should be allowed to bid for the tender for the rest of it? (Imagine the sort of precendents that might set!)
WG won the tender fair and square, and have merely sought to maintain the same kind of service that has always been available. I do not see how this debacle can be in any way thier 'fault'. Although, I'm not saying its necessarily First's fault either - it seems to me more like an inherrent glitch in the current bus market structure.
Rumour has it that WG were prepared to stick to the Bude to Callington section if First had been prepared to accept through tickets and to wait a few minutes for late running connections. However, First refused. The WG decision to run through to Plymouth was, therefore, understandable.
if you bid for a contract, you cant then say oh and i want to go here and there too, if you win the contract you run the contracted route!
if WG want to run to plymouth they run at competion with first just as they do in other parts of cornwall.
also you are right callington is not a destination in its own right, its a commuter town for plymouth just as saltash, torpoint liskeard and tavi, these all have fairly good bus services for this reason if they were not so close, like launceston i'm sure they wouldnt warrant such frequent services.
If through services (ie through Callington) were so important then the Council should have awarded the tender to First. The council does not have to take the lowest bid.
But, anon 0813, as I said above - imagine the sort of precedents that would set! First, or indeed any other operator in a similar position elsewhere, would be able to hold the council to ransom for virtually any sum they liked. It would completely undermine the whole principle of competing for tenders, surely?
I can also envisage that other operators might seek to engineer themselves such situations by suddenly registering the first few miles of their tenders commercially as they come towards renewal. The OFT actually commented briefly on this kind of sharp practice in its recent report, suggesting that it does already happen to some extent, but it would surely get ten times worse if councils started acting as you suggest.
I'm not sure what the answer is. As I said, it seems like a glitch in the current system of mixed commercial/tendered operations. Ideally, IMO, the council should have issued a Bude-Plymouth tender in this case, but no doubt First would have had something to say about that. Although whether First should be able to 'say anything about that' is debatable, if they are only operating on a short section of the route and are unwilling to provide the other links themselves for the cheapest tender price. Alternatively, perhaps councils should be able to impose through ticketing and good connections onto commercial services in cases like this (at a fair rate of reimbursement of course)?
Guys, guys - we've not run anyone off the road.
Western Greyhound is now a MUCH larger company than it was. As I think I have said it is the smaller companies which nibble at the edges of the larger ones. My good friend Mark Howarth, MD Western Greyhound, would road with laughter at the accusation I was running HIM off the road !!
And as for Chester, let's not rewrite history. Chester put it self up for sale, several of us made offers. Arriva duplicated their services with commercial registrations an ended up in the High Court.
We bought the company (and yes it was me) for real cash and ever since then we and Arriva have operated competitive commercial services benefiting the residents of Blacon and elsewhere.
One more time - tell me WHO we have 'run off the road'!
LD
And a spelling mistake - Mark Howard would ROAR with laughter.
I am sure he is doing so right now!
LD
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