Independent report slates bus franchising

John R

As published in the Irish Times today.

Franchising out bus services not the way to go
Emmet Oliver

ESRI Quarterly Report: Franchising out the bus routes operated by State-owned bus companies will reduce passenger numbers, increase public subsidies and end up creating a private oligopoly, a new report has alleged.

The report, written by economist Jerome Casey and published yesterday in the Economic and Social Research Institute's Quarterly Economic Review, claims that bus deregulation in the UK and several European cities has failed. The author says public monopolies have been replaced by private oligopolies.

The report comes as Minister for Transport Martin Cullen considers deregulating the bus market. He is expected shortly to amend the 1932 Road Transport Act and set up a public transport commission with the power to franchise out routes.

Mr Casey, whose report is titled Improving Irish Bus Markets - But Not By Competition, says experience from abroad shows that franchising out bus routes under a transport authority will not work and economists need to accept that one policy instrument - competition - is not the only answer.

Mr Casey suggests instead that a system called network management should be tried. This would involve Dublin Bus or Bus Éireann acting as "network manager" or "lead operator" and effectively sub-contracting routes out to private operators.

"The publicly-owned operator acts as network manager and lead operator, providing an integrated network through a combination of own and sub-contracted private sector service," suggests the report.

"This introduces competition into the marketplace in a structured manner which is sustainable in the longer term."

Mr Casey says this type of system is already in place via Bus Éireann's management of the school transport system, where private operators are sub-contracted to operate certain routes. The contracts are awarded by the Department of Education.

Mr Casey says there is one major benefit of this kind of approach. "The State would retain strategic direction over a necessary piece of physical infrastructure rather than cede it to a private multinational with a contrary development agenda, as occurred with Telecom Éireann, and network management looks like the only system which can provide modal shift," claims the report.

"For existing State companies, network management is less unpalatable than franchising, under which they would have been taken over or replaced by multinationals. For small private bus operators, it also offers a brighter future than under franchising.

"Network management may turn out to be the least unpalatable method of upgrading the Irish bus system for its patrons, operators and regulators."

Mr Casey, who has provided consultancy services in the past for CIÉ companies, is well known for his work in the area of construction economics. He also compiles public transport statistics.

In his report, he claims that bus deregulation in Britain has failed on several levels. He says the usage of bus transport since deregulation "has declined continuously in Wales, in English metropolitan areas and in English shire counties".

He says despite the problems, it is proving difficult to correct the mistakes in Britain.

"Under deregulation, bus transport will make no incremental contribution to spatial, social or economic policy, without explicit and substantial subsidy.

"The franchising model by no means assures increases in patronage. Copenhagen saw a continuing reduction in passenger numbers following the introduction of franchising."

shltter

but will the minister listen

Sounds pretty much like the model that was agreed between the Government the Unions and the company before Mr Brennan unilaterally threw it out and put everything into limbo for the last 3 or 4 years

BuffyBot

Mr Casey suggests instead that a system called network management should be tried. This would involve Dublin Bus or Bus Éireann acting as "network manager" or "lead operator" and effectively sub-contracting routes out to private operators.

Exactly how it should be done, if it's to be done at all!

shltter

BuffyBot wrote:

Exactly how it should be done, if it's to be done at all!

like it says an example would be Dublin Bus and the schoollink service which dublin bus franchises out to small operators

DB monitors the service to ensure the operator is providing the service as agreed

DB inspectors can check tickets etc on the buses

it frees up buses for DBs core service but at the same time allows DB control to ensure the service is integrated with the rest of the network

Zaph0d

Mr Casey suggests instead that a system called network management should be tried. This would involve Dublin Bus or Bus Éireann acting as "network manager" or "lead operator" and effectively sub-contracting routes out to private operators.

Is this how it works in London?

BuffyBot

Zaph0d wrote:

Is this how it works in London?

Pretty much, with TfL as the network manager and the routes given to different bus companies via a tendering process (tenders list minimum service levels, vehicle types etc). The successful bidder then operates the route for X amount of time, under the flag of TfL (hence why most London Buses are red, with slightly differing designs depending on the operator).

If we had a TfL style body for Dublin, they would offer the contract from the route 10 (as an example) and different companies (First, Mortons, Dualway etc) would then make bids to operate it, with the minimum standards being specified to them (they'd have the option to better those in their bids).

It works (relatively) well in London, and it's definitely the model I'd like to see employed in Dublin

John R

London is a franchise system. It works well because it is very tightly controlled and monitored and crucially because there are enough different large operators to allow TFL to pick and choose. They can take routes away from poor operators because there are others with the ability to take over. This is usually not the case in smaller cities where one operator becomes dominant and has the regulatory authority over a barrel. It also works because under control of the London local government TfL have the resources and political backing to change things for the better even when they are unpopular and costly.

Franchising is also inefficient and very expensive, a TFL style system here would cost millions more each year just to provide the current level of service.

shltter

BuffyBot wrote:

Pretty much, with TfL as the network manager and the routes given to different bus companies via a tendering process (tenders list minimum service levels, vehicle types etc). The successful bidder then operates the route for X amount of time, under the flag of TfL (hence why most London Buses are red, with slightly differing designs depending on the operator).

If we had a TfL style body for Dublin, they would offer the contract from the route 10 (as an example) and different companies (First, Mortons, Dualway etc) would then make bids to operate it, with the minimum standards being specified to them (they'd have the option to better those in their bids).

It works (relatively) well in London, and it's definitely the model I'd like to see employed in Dublin

TFL is not an operator it is the body that issues and monitors the franchise this is the kind of system the report recommends against for dublin

Dublin can not be compared to london for various reasons

size
control of franchise group by local government
congestion charging ( income from which is spent on public transport)
Number of operators competing for franchises

the Manchester experience would probably be more comparable to Dublin

there there are only really two operators First group and Stagecoach over 70% of franchises are not contested so the incumbent stays irrespective of how well or poorly they are doing the job

Basically they carved the City up between them and did not threaten each other

the other experience is that to win frachises companies will try and cut costs since alot of costs are fixed ( ie fuel, cost of buses,maintenance,parts etc) they have lowered wages as a way of lowering costs this had led to huge staff turnover and staff shortages and the obvious detrimental effect on services


http://www.manchesteronline.co.uk/news/s/63/63792_the_bus_rip_off.html

http://www.southmanchesterreporter.co.uk/news/s/67/67754_taken_for_a_ride.html

http://www.manchesteronline.co.uk/news/s/27/27371_threat_to_bus_companies_over_service_cuts.html

BuffyBot

TFL is not an operator it is the body that issues and monitors the franchise this is the kind of system

Wow...that almost sounds like what I said...

Macy

Having lived through de-regulation of buses in Manchester, and continuing to have family there, it is not the way to go.

I don't expect a FF/PD Government that is only interested in aiding big business for the sake of it to pay any attention though. I guarantee that any bus user in Manchester would swap Dublin Bus for the situation they have now...

enterprise

Macy wrote:

I guarantee that any bus user in Manchester would swap Dublin Bus for the situation they have now...

Common sense talk at last from a member of the public!

Bus deregulation in 1986 in the UK has been a complete disaster. After a few years many of the small independent companies were gobbled up by the large companies such as First and Stagecoach, which created private sector monopolies. This resulted in the standards of customer service and employees’ terms and conditions being gradually eroded away.

The only relatively successful bus privatisation in the UK has been London using the route tendering process. However it is a very inefficient system and cost a lot more to run P/A compared to the old unified London Buses division of London Transport.

Love or hate it, the current state owned system is the best way forward. Don't get me wrong, DB has its problems such as badly constructed timetables, poor customer service by a minority of its drivers. To solve these problems requires a cultural change within the company, which I believe the new MD can achieve. With proper investment and commitment from the government, Dublin Bus can become a world class player in the public transport sector.

Macy

Totally correct... First year couldn't move for buses, with so many companies vying for business. Hailed as a success by the politicians, infact the complaint was too many buses on certain routes blocking the road! Gradually companies swallowed up or bankrupt. In the close to 40 years that my family has been in Manchester, the current situation is by far the worst. Less regular service, later start times, earlier finishes, less variety of routes, higher cost, poorer wages to drivers etc etc.

De regulation has nothing to do with better service or better efficiency or lower costs. It has everything to do with some right wing notion that unionised labour is bad. :mad:

shltter

BuffyBot wrote:

Wow...that almost sounds like what I said...

well buffy i suggest you go back and read again

the question was is the suggestion in the report the model that is used in London

your answer was pretty much

that was wrong as TFL is not an operator as proposed in the report what the report proposes is completely different from the situation in london

RuggieBear

I posted this on my rant against mean bus drivers but i think tis valid here too.


Privatisation would need to be very carefully implemented if it were to work. In Liverpool, all that's happened is the prices have gone up, the number of buses per route reduced and the number of routes curtailed. Though i believe this is a UK wide experience too.

In fact, the local councils have to heavily subsidise the privatised bus companies on some of the routes just to ensure some of the outlying areas are served. So in effect, the local tax payer is paying twice to have an even worse service at a higher price.

Dublin Bus fares are a fraction of what i've paid for equivalent distances/time in Liverpool. Liverpool buses are at least 50% more than in Dublin.

On the otherhand...they do handle cash and are always very friendly in my experience

Victor

I imagine in London that the Underground and other rail services create an element of competition that can keep the bus services honest.