Late running seems to be the order of the day in Preston. Omnibuses’ Northern Correspondent reports that a possible announcement about the Stagecoach divestment and the reconstitution of Preston Bus might’ve been made last week, but wasn’t. Nothing emerged, in spite of the date being linked to the announcement of major changes in the city.
Important Information Stagecoach/Preston Bus Tickets
For Stagecoach has entered into what are now very public preparations for the inevitable Competition Commission-enforced split. From last week, Prestonians now either need to buy a Preston Bus or a Stagecoach day or season ticket. Never the twain shall meet, an interesting turn of phrase given the diverse make-up of Preston.
This means the return to the previous position where a ticket sold by one operator is not valid by the other. Those passes still to expire will continue to be honoured by both operations, though there are special conditions for 13-week & annual tickets, after 1st January 2011.So ends a major benefit of the take-over—network ticketing.
The recent history of the network, which is now progressively pulling apart, is as follows:
- January 2009—Stagecoach purchases Preston Bus for a reported £6½mil, following intense competition on a number of key routes. Stagecoach nevertheless claimed it was only seeking & operating a “minority share” of the overall city market.
- March 2009—Stagecoach rebrands its Preston city services as “Stagecoach Preston Bus”. Under the brand, Stagecoach sensibly adds its own Stagecoach North West suburban services (those extending to the urban areas immediately beyond the city boundary).
- November 2009—the Competition Commission forces Stagecoach to divest. Stagecoach appeals. Stagecoach nevertheless implements plans to manage Preston Bus separately, a condition set of it by the CC.
- June 2010—the original deadline slips as Stagecoach awaits an appeal lodged with the Competition Appeals Tribunal.
- July 2010—After only a partly successful appeal, Stagecoach and the CC agree a slightly smaller divestment than originally directed. This involves the eventual retention by Stagecoach of the 11 (Gamull Lane), once fought over in the recent bus war.
- December 2010—announcement expected. As a precursor, network ticketing changes become effective.
Future Expectations
The $64,000 question is, who will buy? Everyone’s being tight lipped on that, though don’t expect the employee bid to have reached the shortlist.
As for the future, can we also expect a new détente or peaceful co-existence between the two? Any newcomer is likely to be a bigger player than once was Preston Bus. The fact that the war ended the way it did demonstrates that the market isn’t strong enough for competition. May be operators will respect each other’s services—no doubt to the CC’s chagrin.
In 2007, Stagecoach targeted strategic advertisements on billboards and bus shelters on its competitive corridors, initially towards Gamull Lane & Farrington ParkAdditional information & 2007 bus images by Omnibuses’ Northern Correspondent
15 comments:
This is the best example yet of the Competition Commission not being in public transport's best interest. While the means by which they got there were predatory, Stagecoach was without a doubt good for Preston - far better than a bus war with First, Arriva or whoever else might get the spoils.
I dont think it should ever have come to this in the first place i think that when prestonbus ceased the competiton commision should of insisted another operator buy the business their and then monopolies are a bad thing even if the operator concerned is giving a good service
Anonymous 0854 should be aware that most smaller and medium sized towns have generally only had one main operator since the 1930s.
We'll have to wait to understand what the Comptetition Commission makes of single operator locations such as the Medway Towns (population around 250,000 and Passenger Focus satisfaction rating of 89%) or multiple operator locations such as Merseyside (population approx 1.375million and satisfaction rating 88%).
Preston, at 132000, is rather smaller than both, so it is unclear why two operators are essential.
I would have thought that Brighton & Hove (yes, them again!) would be considered to be a *largely* monopolistic operation.
So - remind me who is usually considered to be the top UK operator?
Competition Commission 0
Common Sense 1
"monopolies are a bad thing even if the operator concerned is giving a good service"
Are they? I find that monopolies or cartels/fares unions/PTEs generally give the best overall networks in public transport. Not the cheapest, of course, but that isn't the only criterion and nor should it be.
"Bus wars" are wasteful, costly and lead to poor service in the end. The competitor is the car, not other buses.
And of course, Brighton & Hove were allowed to buy Brighton Blue Bus, without any issues. It's very difficult to understand how the CC (and its predecessor MMC) reaches its conclusions. Remember, at the same time that Preston had 'blown up', Stagecoach were also allowed to buy both Eastbourne Buses and Cavendish, thus taking the whole of Eastbourne other than one corridor B&H have sown up and the occasional journey provided by Renown. Okay Eastbourne is much smaller but is that the only or main cirteria?
Anon at 1158, you have one reason in that Eastbourne is smaller than Preston, but don't forget that in Eastbourne they just bought both operators (and only just got away with it)...
In Preston, Stagecoach were predatory, starting competing services with Preston Bus, with low fares etc, and weakening Preston, before then buying the company.
So while it is not really in the interest of the bus users to have the network split up - Stagecoach did have it coming.
Did they really think they'd get away with what they did?
Time to take another approach to that problem, then?
Perhaps a new operator should not be permitted to register a route in competition with an existing operator where the fares are a loss leader and lower than those of the existing operator?
Plus which Stagecoach deserve all they get they are far to predatory. Look at what they have done in the past sending companies to the wall or just buying them up so that they are able to get just a little bit more money. Fare enough Stagecoach has share holders and has grown from a small company but the way they have done it is nothing short of disgraceful
Brighton & Hove also went on to buy out Stagecoach from their East Sussex operations.
"Plus which Stagecoach deserve all they get they are far to predatory."
Maybe. But why, as this decision does, take it out on the passenger?
@Neil
“Perhaps a new operator should not be permitted to register a route in competition with an existing operator where the fares are a loss leader and lower than those of the existing operator?”
It's hard to judge whether fares are loss leaders or not. And given that undercutting overpriced monopoly operators is where competition can bring benefits, I don't think that banning that would be very helpful!
Competition can be good for passengers, where it stops a monopoly operator from profiteering, but equally it can be bad for passengers, where it leads to a fragmented network with little coordination of timetables or interavailability of tickets.
What would be good would be for local authorities to have the power to decline or rescind a service registration where it is apparent that it is a purely predatory service that is not adding value to the network, and to be able to force operators to accept interavailable tickets.
Yes, I know it's a pipe dream...
Interesting idea. Would that be back to where we were pre-deregulation but pre NBC?
I think allowing Councils to introduce a "Verbundtarif" (or even requiring them to do so) and requiring operators to accept it (in return for input on what it should be) might be a way forward. Remove the chance to undercut on fares, purely allowing competition based on number of passengers carried=funds received from joint tariff, and you might see some quality/frequency competition instead of price. And that *would* be good for the passenger.
That said, competitors creaming off peak-hour revenue isn't helpful either. So maybe also a requirement that a competitor must provide a similar "window of service" to register a route as the existing operator? That way, cross-subsidy is shared?
One more - how about requiring timetable interval spacing to be done properly? So if a competitor wishes to register half-hourly on an existing half-hourly service, theirs must be at 15 minute intervals to the others?
That way competition can go on, as could sharing of routes, but the passenger would win, while removing worries that if we fully re-regulate Councils might not be very interested and might just specify a bare minimum?
It is rather ironic that the proponents of the Bristol Freebus scheme that Busing mentioned a few days ago seem to be rather less than satisfied with the service provided by their local near-monopoly operator. In practice, of course, neither a monopoly nor a competitive environment can guarantee that the passenger will get a good deal.
The Competition Commission's role is to ensure "healthy competition between companies" (this definition comes from the 'About us' page of their website), so presumably their reports and recommendations focus on this aspect of the situation, and not any others, regardless of how important one might consider those other aspects to be. This would presumably cover such issues as whether a local authority inviting tenders for schools or subsidised services would only have a monopoly supplier who would be likely to tender for such operations (which could potentially be against the public interest); or whether the existence of a monopoly acted as a deterrent to potential new entrants to the market. From my personal perspective, I would have thought that the monopolistic situation in Bristol would probably be more problematic than one in Preston, but the status quo in Bristol has existed for several years now, and maybe the criteria used have changed over the ensuing years.
One might also wish to consider whether Stagecoach's action in setting up competing services, and subsequently buying Preston Bus, was motivated by a desire to improve services for the passenger, or was it motivated by a commercial desire to increase their share of the market. I guess we all know the answer.
True, but the "punishment" disadvantages the passenger. Perhaps a better one would have been to require divestment but also to require retention of cross ticketing?
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