Deregulating the bus industry in Britain — (B) the case against

Gwilliam, K M; Nash, Christopher; Mackie, Peter

doi:10.1080/01441648508716589

Cited by 58 publications

(24 citation statements)

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“…In this journal ten years ago, Gwilliam et al ( 1985) provided a critique of the White Paper Buses which proposed bus deregulation. They believed that the essence of the White Paper could be reduced to four propositions: that deregulation will produce a competitive market; that competition will substantially reduce costs; that a competitive market will improve resource allocation; and that a competitive market will not cause any significant undesirable spin-off effects.…”

Section: Introductionmentioning

confidence: 98%

Bus deregulation: ten years on

1995

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This paper identifies the principal areas of disagreement in the bus policy debate of 1984-85, and reviews the outcome of bus deregulation against that background. It is concluded that the commercial bus market is imperfectly contestable. Entry may occur where the incumbent is inefficient, where the incumbent is efficient but weak enough to be supplanted, or simply through over-optimism. Incumbents deter entry by tightly controlling costs and by not leaving profitable gaps in service. Merger and acquisition is normally a better strategy than active competition; the tendency to merger has proved stronger than was recognized in the debate. In considering market performance, it is necessary in principle to distinguish between the effects of privatization, subsidy withdrawal, tendering and the abolition of the route licensing system, while recognizing that they interrelate in a complex way. Operating costs have fallen much more sharply than the opponents of deregulation expected. Service levels have risen, but so have real fares. Patronage has fallen faster since deregulation than its historic trend, leaving cost per passenger journey little changed. However, the tendering regime in London has performed much better than full deregulation, with similar (and continuing) reductions in operating costs, little change in patronage and a significant reduction in cost per passenger. Though it may not achieve all the dynamic benefits of full deregulation, tendering avoids wasting resources in competitive battles, offers the opportunity to balance fares and service policies efficiently, and avoids the loss of consumer confidence associated with instability. Finally, the loss of the ability to use local bus services as an instrument of urban planning policy is now recognized as important; here too a tender or franchise regime has the edge over full deregulation.

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Section: Introductionmentioning

confidence: 98%

Bus deregulation: ten years on

1995

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“…An important argument for bus subsidy is the existence of economies of scale in user costs, and the user economies of scale argument for subsidy has been widely investigated (e.g. Jansson 1993; Gwilliam et al 1985;Tisato 1997).…”

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confidence: 99%

Subsidies and welfare maximization tradeoffs in bus transit systems

et al. 2007

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“…By offering a time schedule that closely matches the timetable of a competitor, a company could steal passengers from other companies, but this did not turn out to be in the interest of passengers. The end result was lower costs, higher prices, higher frequencies, and less competition (Gwilliam et al, 1985). Contracting out the operation is more common for buses than for rail and has led to important efficiency gains when the contracts are well designed (Gagnepain et al, 2013).…”

Section: Public Transport Pricingmentioning

confidence: 98%

Skilled Cities and Efficient Urban Transport

Proost¹,

Thisse²

2017

Economics Without Borders

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This chapter surveys the fundamental forces that drive the formation and size of cities. We discuss the different types of agglomeration economies generated by a dense web of activities, with special emphasis on the benefits associated with the clustering of highly skilled workers. The distribution of activities within cities results from the trade-off between commuting and housing costs. We show that in this trade-off commuting costs are the cause and land rent is the consequence. The land rent capitalizes the advantages associated with proximity to particular urban locations such as employment centres. We identify the main sources of inefficiency in various urban policies implemented in Europe. Special attention is paid to the regulation of the land market and the pricing of urban transport. 9.

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Deregulating the bus industry in Britain — (B) the case against

Cited by 58 publications

References 0 publications

Bus deregulation: ten years on

Bus deregulation: ten years on

Subsidies and welfare maximization tradeoffs in bus transit systems

Skilled Cities and Efficient Urban Transport

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