Stagecoach-Disowning the past

[Mollman]

The “bus entrepreneur spirit” was always about ripping off passengers and ripping off the taxpayer. Not just Souter and Gloag, Lockhead was the same, so was Moyes.

And that “spirit” of grabbing every penny in dividends, leaving a trail of destruction in your wake and without investing anything back is why the bus industry is in such a poor state now.

The history of the bus industry has always been about privatising profit and nationalising risk. Stagecoach had the begging bowl out during Covid despite the billion or so the owners took out in dividends. I’d have honestly let them go bust.

I hope the industry is changing. It needs to.

I was thinking more about initiatives such as Stagecoach Gold and First West of England's fare reforms which saw passenger growth. Buses outside London starting getting higher quality interiors long before TfL decided to trial them.

I'm not anti-franchising, I just feel that the pro-franchising lobby likes to paint Stagecoach et al as nothing more than profiteering bus barrons, ignoring the decades of innovation and expertise that they represent.

 

[Simon75]

Why drag up the companies unethical practices and former owners opinions?
I don't know or any other business where a senior boss has been critical of past ownership.

 

[TheGrandWazoo]

Why drag up the companies unethical practices and former owners opinions?
I don't know or any other business where a senior boss has been critical of past ownership.

Really? I do

Iceland has a whole page on its website where the founder (who was ousted in a bitter boardroom battle) gets his own back having returned to the business https://about.iceland.co.uk/our-story/the-dark-ages/

 

[Roilshead]

Why drag up the companies unethical practices and former owners opinions?

Errr . . . to signal a change in culture/draw a line under the past? and specifically in the case of Stagecoach, which of all the post-privatisation groupings was most closely linked with specific individuals in terms of ownership, emphasise that things have moved on.

 

[Mwanesh]

Of course they would have done. The owners took out the money during the fat years and were nowhere to be seen when the muck hit the fan. “Oh we’ll sack everyone if you don’t bail us out”. I’ve no doubt the likes of Gloag would have done too.

Stagecoach paid out well north of a billion quid to Souter and Gloag, but there was no money left when the going got tough. And you’re telling me that is NOT privatising profit and nationalising risk?


The shareholders can invest some equity into their business. If they don’t, that’s their commercial decision to let their business fold. That’s how it works isn’t it?


No, the risk has been with the taxpayer. The operators take all that lovely profit from the lucrative commercial stuff- Stagecoach Busways’ profit margin was 23% in the early 2000s- and hand over everything else to the taxpayer to run. And, of course, there’s a guaranteed margin on the tendered stuff.

Commercial route failures don’t cost money, the registration timescale means there’s no risk and the taxpayer will pick up the tab for anything essential. The bus industry is about as risk-free as you can get, providing you reach a critical mass in an area.

Stagecoach Busways went through a phase of declaring early/late/estate services as uneconomic, and getting Nexus to tender them out. Oddly enough, when they didn’t win the tender for things like the daytime 32/A, they decided they were economic after all, and kept them. Yes, they’re just playing the game, but it shows the mentality we’re dealing with.

So they get to keep the profit on the fatty bits, and get to keep the profit on the thin bits. Nice work if you can get it.

Now I completely agree things aren’t as lucrative as they were back in the early 2000s, and Busways won’t be making 20%+ now- they’re making about half that. But that’s part of ebb and flow of business. And it’s alsoo rather telling that the companies are now talking more about “collaborative working” now the margins are thinner.

The whole bus industry got help. Are you telling us the municipal left should have got help only? You can nationalise the bus industry as you wish.

 

[Busaholic]

Why drag up the companies unethical practices and former owners opinions?
I don't know or any other business where a senior boss has been critical of past ownership.

If you read the article you'll find no mention of the opinions of former owners. New bosses regularly emphasise the new directions they're moving their business to, especially if there has been widespread public criticism of the previous regime, and often cite a new ethos.

 

[Tetchytyke]

I was thinking more about initiatives such as Stagecoach Gold

It says a lot about the privatised bus industry that free WiFi (when it works, which is never on Arriva…) and some pleather is enough to count as ground-breaking initiative. That’s not to dismiss Stagecoach Gold as a bad thing- it clearly wasn’t- but still.

Buses outside London starting getting higher quality interiors long before TfL decided to trial them

Well yes. That’s because the bus companies were going to pass the bill for the enhanced specification on to TfL in the tender price. And TfL decided that, in the grand scheme of things, free WiFi that is frequently broken and some pleather wasn’t worth the extra.

The whole bus industry got help. Are you telling us the municipal left should have got help only?

I’m saying that when a business pays its owner £1.5 BILLION in dividends, it’s a bit rich to then come to the taxpayer with the begging bowl out. Start by repaying those dividends.

Same goes for a lot of the Covid fraud business recovery payments.

 

[NorthernSpirit]

And there's the problem with privatisation...buses, trains, gas, water, Royal Mail...all broken

I love privatisation but that is because I'm a capitalist. Can privatisation be better? Yes, if "open access" was an option for the proposed MetroMayor franchised bus operations then I may be swayed but as it stands I heavily despise the MetroMayor franchised bus operations as it'll only serve the Labour mayors and not the people.

With a new CEO at the helm, Stagecoach should look at expanding into areas where they currently don't serve which will increase competition all the more.

 

[W-on-Sea]

I would say that under a new CEO Stagecoach could start by reversing numerous of the decisions that have been taken since Souter left the scene - the downturn in quality and reliability of operations in the past two to three years (here is Stagecoach West-land, at least) has been very perceptible as as yet shows no sign of being reversed.

 

[Dai Corner]

It says a lot about the privatised bus industry that free WiFi (when it works, which is never on Arriva…) and some pleather is enough to count as ground-breaking initiative. That’s not to dismiss Stagecoach Gold as a bad thing- it clearly wasn’t- but still.


Well yes. That’s because the bus companies were going to pass the bill for the enhanced specification on to TfL in the tender price. And TfL decided that, in the grand scheme of things, free WiFi that is frequently broken and some pleather wasn’t worth the extra.

I’m saying that when a business pays its owner £1.5 BILLION in dividends, it’s a bit rich to then come to the taxpayer with the begging bowl out. Start by repaying those dividends.

Same goes for a lot of the Covid fraud business recovery payments.

The private sector manages to provide higher spec buses and make a taxable profit whereas TfL buses cost the taxpayer the best part of £1 billion every year for lower spec vehicles.

Stagecoach could have just shut down during the lockdowns and pay their staff 80% of their normal wages for the duration of course.

 

[Goldfish62]

The private sector manages to provide higher spec buses and make a taxable profit whereas TfL buses cost the taxpayer the best part of £1 billion every year for lower spec vehicles.

The latest TfL buses are of a considerably higher spec than any of the 90+ new GoCornwall buses that have entered service in the past few years. Plus next stop announcements, something which matters more than a wood effect floor or mood lighting, have been universal for a good 15 years in London, but are still the exception elsewhere

I'm not sure where you're getting your numbers from because the shortfall on the TfL bus network is funded by the surplus made by the Underground.

CPT presented to the DfT the facts about what would happen if the industry didn't get the support to at least keep the show on the road. I can tell you with a very high degree of certainty that a number of operating companies would have went under in under 6 weeks if they did not get any help, even with support from owning groups. That would have been thousands of people on the dole at a time where there were no jobs.

That wouldn't have happened. Nationalisation would. In fact at the time there was some speculation in the industry that that was what was going to happen. In the end of course it didn't, and short term emergency funding happened instead.