Commercial routes competing against subsided routes

[northwichcat]

A while back when Aintree Coachline registered a Chester station to Chester Frodsham Street commercial bus route, Cheshire West council had to withdraw the funding for the subsided free bus link. Because the free bus link got funding from the rail operators as well as the council, the council's share of funding was smaller than what they now pay for the 'commercial service' through the funding of over 60 passes.

What would be the most similar a subsided bus route could be to a commercial route that is operating at the same time of day?

Another place where I can think of there being an issue is the 27 Macclesfield-Knutsford route. This was previously an hourly subsided route (with a long layover for buses in the off-peak period.) High Peak registered a new commercial service using a single bus which means a service every 90 minutes in the off-peak period. At peak times the extra traffic means longer gaps in services. For instance, for someone working in Knutsford who lives in Chelford or Macclesfield they would need to arrive in Knutsford at 07:13 or 09:05 in the morning and leave at 16:40 or 18:45 in the evening. If an employer had non-flexible working hours of 9-5 this service is obviously unsuitable because of the change.

Would it be possible for Cheshire East to offer a subsided contract for extra peak time only buses?

 

[Tomonthetrain]

One I can think of is the 226W competing with the 74 between Dudley and West Bromwich on Sundays only. The 74 being commercially operated and the 226W tendered by Centro. However the 226 then carries on from Dudley to Merry Hill and the 74 continues from West Bromwich to Birmingham

 

[northwichcat]

Yes I don't think there is a problem with a subsided service running at different times of the day to a commercial service. However, what if the commercial service isn't frequent enough could it be interworked with a subsided service or not? If not how different does the route need to be before there is a legal issue with not having a subsided service directly competing with a commercial one?

 

[dvboy]

I can think of the Centro subsidised and Diamond operated 255 competing with the commercial NXWM 256 between Wolverhampton and Kingswinford on Sunday-Thursday evenings. After Kingswindford they go in different directions. Both are commercial NXWM services in the daytime.

 

[radamfi]

However, what if the commercial service isn't frequent enough could it be interworked with a subsided service or not?

That's usually not allowed. That was one of the main criticisms of deregulation when it started. However, funds are usually too scarce these days to consider inserting subsidised journeys into commercial routes. Although that used to be got around by making the routes slightly different.

It is possible for an operator to insert additional commercial journeys into a subsidised route, though.

 

[Deerfold]

In West Yorkshire the SS1, 78A and 79 services subsidised by NYCC were run by Transdev Keighley. Bus company passes were accepted on all these.

When they trasferred to Little Red Bus the SS1 was renumbered 71 and rather complicated boarding and alighting restrictions were introduced so that only journeys that were only possibly on those buses (rather than the other local 25, 66, 66A, 903) were allowed to be made.

On the other hand, apart form a couple of spurs off the main road, most journeys that are possible on the West Yorkshire-susidised 903 are possible using one or a combination of other buses. There are no boarding restriction and if it's the first bus that comes and I'm on a muilti-operator ticker I'll catch it.

Timetables here if anyone's interested:

http://www.wymetro.com/BusTravel/bustimetables/001
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That's usually not allowed. That was one of the main criticisms of deregulation when it started. However, funds are usually too scarce these days to consider inserting subsidised journeys into commercial routes. Although that used to be got around by making the routes slightly different.

It is possible for an operator to insert additional commercial journeys into a subsidised route, though.

PTEs and counties can ask an operator to add journyeys to (or vary the route of) a commercial service. They don't very often.

They are allowed to have a small proportion of funding that is not open to competition.

 

[radamfi]

It might be interesting to note that in New Zealand, the only other developed country that has bus deregulation, the council can block commercial operators competing with tendered services.

 

[robertclark125]

On this topic, if I lose a tender for a subsidised service to another operator, and I then launch a commercial rival against the new operator, could the oft get involved? The Big Lemon told me the OFT can't, unless it's a big operator launching against the tendered operator?

 

[cainebj]

On this topic, if I lose a tender for a subsidised service to another operator, and I then launch a commercial rival against the new operator, could the oft get involved? The Big Lemon told me the OFT can't, unless it's a big operator launching against the tendered operator?

They can't. Local authorities will only put a route out to tender when there isn't a commercial alternative. If an operator loses a tender and then offers to operate the service commercially they are free to do so, and the successful operator in the tender process will lose the contract. Similarly if an operator provides a commercial alternative mid-term, the local authority has the right to withdraw the tendered service before the contract end (some may cancel the tendered service immediately, some may wait until the end of a contract year, while others may see the contract out and not retender), as the responsibility held by the LA is to provide vital transport links only where a commercial service is unavailable.
The only instance where the OFT would usually become involved is if bullying tactics come into force (where there's clear evidence that competition rules have been broken), generally from the large operators who would make a financial loss until the competition is gone (something now happening in Brighton, where Brighton & Hove have increased fares without notice on services previously in competion with The Big Lemon).

 

[robertclark125]

Cheers for clearing that up Brett. It would also lead to the question, from the council, as to why an operator tendered for a service it ran, lost it, and then ran a commercial replacement in competition with the new operator of the tendered service.

 

[tbtc]

In South Yorkshire we've seen tendered services cancelled because another firm started a commercial alternative (TM Travel's tendered X12 from Barnsley to Doncaster was cancelled when Tates Travel started their own X12) and also when a big operator has lost a tendered service they'll suddenly decide that it could be run commercially after all (Stagecoach's evening/ Sunday Rawmarsh services).

 

[cainebj]

Cheers for clearing that up Brett. It would also lead to the question, from the council, as to why an operator tendered for a service it ran, lost it, and then ran a commercial replacement in competition with the new operator of the tendered service.

It'd depend on the operator and depot really. Certainly with Stagecoach (as we saw in Summer with Cumbria's Kendal depot who lost a the contracts for Kendal town services, PVR 5, now operating all but 1 town service commercially), the more buses and services the depot operates the more they can spread out the depot overheads. When the overheads are reallocated across cost per bus or cost per service, the increase might push other bus services into loss making operations for the particular operator, causing problems for the operator.

Not all of the time, but in some cases, the service under tender may be one that an operator such as Stagecoach have stopped operating commercially because it was operating below their minimum profit levels, but could still be running at a small profit. Having a service like this on a tender would guarantee income for an operator, rather than have the profitability of a service hovering above and below a break even point. An operator, more likely than not a large operator, may decide that it is operationally and financially better for them to take the risk of commercially operating a service that changes between profitable and loss making, rather than lose the service completely and putting other low profit making commercial services at risk from the re-evaluated allocation of depot overheads.

 

[northwichcat]

So in the case of the 27 route I mentioned how much different would a subsided route need to be for it to be considered as not competing?

Would any of the following ideas comply:

Idea 1: Macclesfield to Knutsford limited stop via the direct A537. Not serving the hospital, AstraZenca etc. which are served by the current service.
Idea 2: As above but with extension beyond Knutsford to Manchester Airport
Idea 3: As idea 1 but starting at Buxton.
Idea 4: Some services on the 88 route being extended beyond Knutsford to Chelford via Ollerton.

?

 

[tom1649]

This is currently happening here in Matlock. G & J Holmes recently lost the contract for the Matlock Town services to TM Travel (after 11 years). About a week after TM Travel took over the contract, Holmes started running their own service commercially competing with the tendered service.

Derbyshire County Council doesn't seem to be acknowledging that the commercial service exists though. Their timetables section hasn't been updated.

It will be interesting to see what happens here.

 

[northwichcat]

This is currently happening here in Matlock. G & J Holmes recently lost the contract for the Matlock Town services to TM Travel (after 11 years). About a week after TM Travel took over the contract, Holmes started running their own service commercially competing with the tendered service.

Derbyshire County Council doesn't seem to be acknowledging that the commercial service exists though. Their timetables section hasn't been updated.

It will be interesting to see what happens here.

Does the commercial route exactly replicate the route of the subsided bus and operate at the same time of day?

 

[tom1649]

Does the commercial route exactly replicate the route of the subsided bus and operate at the same time of day?

The routes do differ slightly. The commercial services do not serve the railway station or Sainsbury's, instead using the old bus station on Bakewell Road. M3 to Hackney has an earlier finish on the commercial service. Apart from this the routes are very similar.

I should add that they are also competing with another tendered service, service 150 (Matlock - Alfreton) which in this case is an exact duplicate running at the same time of day.

 

[Statto]

Merseytravel routes 210/250 & 130 compete with Stagecoach 20/21 between Liverpool & Black Bull, although the 21 & 130 go down a different route from the 20/210/250 from Spellow Lane to City Centre.

 

[Deerfold]

Merseytravel routes 210/250 & 130 compete with Stagecoach 20/21 between Liverpool & Black Bull, although the 21 & 130 go down a different route from the 20/210/250 from Spellow Lane to City Centre.

Sorry, I don't know the area well - which of these are subsidised?

 

[Statto]

Sorry, I don't know the area well - which of these are subsidised?

I did mention it in my post. Merseytravel routes 130/210/250 compete with Stagecoach 20/21 from Black Bull to Liverpool City Centre.

 

[Deerfold]

I did mention it in my post. Merseytravel routes 130/210/250 compete with Stagecoach 20/21 from Black Bull to Liverpool City Centre.

Perhaps I'm missing something - I still don't know which are subsidised. You've simply repeated what you put before - which as I didn't glean the information the first time, didn't help me.

 

[Statto]

Perhaps I'm missing something - I still don't know which are subsidised. You've simply repeated what you put before - which as I didn't glean the information the first time, didn't help me.

Stagecoach are the commercial operator who operate 20/21, with Merseytravel the local authority who subsidise routes 130/210/250.

 

[Deerfold]

Stagecoach are the commercial operator who operate 20/21, with Merseytravel the local authority who subsidise routes 130/210/250.

Ah - that's what threw me - I thought both were operators. Merseytravel seems to have rebranded itself since I was last in the area. Thanks.

 

[MK Tom]

There's a bit of a weird situation at the moment with routes 45 and 62 between Cranfield and CMK, operated by Grant Palmer and Souls respectively. The former is a Beds contract and the route never generated enough for two services yet Souls have launched their commercial service recently and have had rather high loadings...