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  • Bus consultation closes: September 24, 2018
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Author Topic: Transport Committee, inquiry into the decline of the bus market in England  (Read 626 times)
grahame
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« on: September 05, 2018, 03:21:46 pm »

From [here], submission form [here]

Quote
16 July 2018
The Transport Committee has launched an inquiry into the decline of the bus market in England outside London.

Bus service in decline
Bus service use is in decline in England, according to annual statistics from the Department for Transport (DfT). While bus use per person has increased by 52% in London over the last 25 years, it has fallen by 40% in other metropolitan areas.

Inquiry details
During the inquiry, MPs will consider:

bus service reliability
how services are run in metro-mayor, metropolitan and non-metropolitan areas
how they are financed
examples of innovation and best practice
Submit your views
To investigate the above issues further, the Transport Committee want to hear your views.

You can submit written evidence by completing our online submission form.

The deadline for written submissions is Monday 24 September 2018.

We are particularly interested in evidence on:

the effectiveness of the DfT's bus policies
factors affecting bus use, including reliability, congestion and the ways bus companies are dealing with congestion, and the effectiveness of bus priority measures (for example bus lanes and priority signalling)
how bus services are provided to isolated rural and urban communities and their dependence on services
the viability and sustainability of bus services, including the effectiveness of funding, fare structures and public grants
regulations affecting bus service provision and the quality of guidance to operators and local authorities
 Find out more about our bus market inquiry.

"Buses are a vital lifeline in many communities"
When announcing the inquiry, Committee Chair Lilian Greenwood said:

"There are a number of reasons for the sharp decline in bus use in England outside London over the past 25 years. Congestion, car ownership, an increase in online shopping, and reductions in local authority subsidies all play a part.

Our inquiry seeks to gather evidence about the health and future of the bus market.

We will look at operational factors including the impact of congestion and reliability. We'll be asking about the most effective models for bus companies.

The financing of buses, investment in services and value for money and progress since the Bus Services Act 2017 in metro and non-metro areas will all come under consideration.

Buses are a vital lifeline in many communities but with funding streams falling and fares rising, their availability and attractiveness to the travelling public is under threat.

A successful bus market can cut congestion, reduce social isolation, help the environment and offer a variety of economic benefits. I would encourage anyone with insight into this sector to submit evidence."


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ChrisB
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« Reply #1 on: September 05, 2018, 03:29:48 pm »

Easy - Those services being lost rarely ran at a profit & required subsidy.

Government has been cutting Council funding for a number of years and its stupidly obvious that non-cure funding takes the hit. No subsidies, no bus services that require subsidy.

Little else to report really. Restore ring-fenced funding for bus subsidies and they'd restart.
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ray951
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« Reply #2 on: September 05, 2018, 04:13:46 pm »

Easy - Those services being lost rarely ran at a profit & required subsidy.

Government has been cutting Council funding for a number of years and its stupidly obvious that non-cure funding takes the hit. No subsidies, no bus services that require subsidy.

Little else to report really. Restore ring-fenced funding for bus subsidies and they'd restart.

There are other answers.
At the moment we have private companies extracting profit from bus services while at the same time tax payers are supposed to subsidy un-profitable services, how about we use the profit from the profitable services to cross-subsidise the un-profitable services so that we have a proper joined up public transport network. No more private good, public bad.

I understand that bus services are even more profitable than rail services and we may therefore not even need any tax payer subsidy although it would be good to also reduce fares at the same time.
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ChrisB
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« Reply #3 on: September 05, 2018, 04:20:06 pm »

Dreaming, sorry.

Bus companies are making very little profit, just enough to survive. Force them to reinvest what small profit there is and they'll give up running buses because shareholders aren't getting a return.

So then who picks up the buses (and their non-cheap maintenance) and staff?
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Sixty3Closure
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« Reply #4 on: September 10, 2018, 01:13:30 pm »

As a non driver part of the problem for me is that the buses don't go where I need them to or do so very infrequently that its not practical. This then means I'm less likely to get a bus and it becomes catch 22. Having one or two buses a day means lots of waiting around and I then generally end up getting a cab or in one case walking the 5 miles back into town rather than waiting 4 hours or so for the return bus.

I think they need to be stopped being seen in profit and loss terms and more what service do they provide. Even though its declined slightly London does show what an integrated transport system can achieve (well sort of...maybe...) and I think we need to spend more on rural services even if they're not profitable.

And yes I'm in the (very slow) process of moving to countryside so probably a bit biased Smiley
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ray951
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« Reply #5 on: September 10, 2018, 03:35:12 pm »

Dreaming, sorry.

Bus companies are making very little profit, just enough to survive. Force them to reinvest what small profit there is and they'll give up running buses because shareholders aren't getting a return.

So then who picks up the buses (and their non-cheap maintenance) and staff?

Are you sure about the lack of profit in buses:I selected the Go-Ahead Group and Stagecoach.

Go-Ahead profits for YTD 30/6/2018
Bus Revenue 934.2M profit 91.4M - 9.8%
Rail Revenue 2,527.3M profit 44.5M - 1.7%
And if you look at bus revenue outside London it was Revenue of 383.7m  and gross profit of 45.8m - 12%.

Stagecoach year ending 28/4/2018.
Bus Revenue (outside London) 1012M Gross Profit 112M - 11.2%
Train revenue - 1,495.2M profit 24.9M 1.7%

Looks like plenty of profit in bus to me, and as an example Tesco has a gross profit margin of 5.91% and Sainsbury's is 6.49%.




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ChrisB
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« Reply #6 on: September 10, 2018, 03:40:27 pm »

And the overall % - because profit levels of under 2% won't keep tythem operating the trains - so there's cross-subsidy going on.
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bignosemac
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« Reply #7 on: September 10, 2018, 03:47:22 pm »

And the overall % - because profit levels of under 2% won't keep tythem operating the trains - so there's cross-subsidy going on.


But not all bus companies run trains. So the assumptions that 'bus companies are making very little profit', and that ray951 was dreaming, are patently wrong.
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ChrisB
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« Reply #8 on: September 10, 2018, 03:51:12 pm »

He quoted the two major bus companies that make higher revenues on trains than buses - so they're train companies with a major order of buses, I suggest.

Try a bus company that dabbles in trains) maybe, and you may prove me wrng. but you haven't so far.
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grahame
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« Reply #9 on: September 10, 2018, 04:03:03 pm »

As a non driver part of the problem for me is that the buses don't go where I need them to or do so very infrequently that its not practical. This then means I'm less likely to get a bus and it becomes catch 22. Having one or two buses a day means lots of waiting around and I then generally end up getting a cab or in one case walking the 5 miles back into town rather than waiting 4 hours or so for the return bus.

Agreed.  Public transport needs to be at a certain level / frequency to attract passengers to use it. Reduce a service that's 8 buses an hour to 4 (because the 8 are only 20% loaded) and you'll find you have 35% loading on the remaining buses.  But reduce a service that's 8 buses a day to 4 (because the 8 are only 20% loaded) and you'll be lucky if those remaining 4 even still have a 20% load - more likely 15%.

If you need 22% to break even, then you are taking a 16% shortfall with eight round trips and increasing that shortfall to 28% on four trips.  Of course , it's not quite that simple because your subsidising authority that now has a greater shortfall will be made up for in extra car parking revenue.

I appreciate the maths here is imprecise / imperfect, but the generality and the need for a certain frequency fits - the elasticity of how people will transfer from one service to another.
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Sixty3Closure
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« Reply #10 on: September 10, 2018, 04:32:46 pm »

https://www.pembrokeshire.gov.uk/bus-routes-and-timetables/bus-routes-list-coastal-buses

It's not a perfect example as its in a touristy area but it does show what can be done with buses. I love the hail and ride element as it means I can set off walking knowing the bus will catch up with me. It also combines beaches for the tourists with joining many villages with the big town in the area Haverfordwest. Although when I say big town its all relative. It does seem to work well for locals and tourists though based on my limited experience.

No idea what the subsidy or profit is though.
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ray951
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« Reply #11 on: September 10, 2018, 09:11:26 pm »

He quoted the two major bus companies that make higher revenues on trains than buses - so they're train companies with a major order of buses, I suggest.

Try a bus company that dabbles in trains) maybe, and you may prove me wrng. but you haven't so far.
I picked those two companies at random, they also happened to have figures easily available. I looked for gross margin for First Bus and Arriva but was unable to find any.

Anyway if you are so sure of your opinion why don't you provide some facts to back them up?
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Lee
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« Reply #12 on: September 11, 2018, 03:16:19 pm »

Easy - Those services being lost rarely ran at a profit & required subsidy.

Government has been cutting Council funding for a number of years and its stupidly obvious that non-cure funding takes the hit. No subsidies, no bus services that require subsidy.

Little else to report really. Restore ring-fenced funding for bus subsidies and they'd restart.

There are other answers.
At the moment we have private companies extracting profit from bus services while at the same time tax payers are supposed to subsidy un-profitable services, how about we use the profit from the profitable services to cross-subsidise the un-profitable services so that we have a proper joined up public transport network. No more private good, public bad.

I understand that bus services are even more profitable than rail services and we may therefore not even need any tax payer subsidy although it would be good to also reduce fares at the same time.

Dreaming, sorry.

Bus companies are making very little profit, just enough to survive. Force them to reinvest what small profit there is and they'll give up running buses because shareholders aren't getting a return.

So then who picks up the buses (and their non-cheap maintenance) and staff?

ray951 and ChrisB are effectively discussing the pros and cons about a form of Bus Franchising. Grahame and myself have some experience in this field, being part of a team that devised and promoted the Option 24/7 Bus Franchising proposal for Wiltshire.

With Option 24/7, we found that it wasn't enough to simply use the profit from the profitable services to cross-subsidise the unprofitable services, as that would lock the failing parts of the current system into the new system. Instead, we wanted to take the unique opportunity that this kind of approach offers to look at the whole network, its resources, and how they could be deployed not just in the most cost-effective manner, but also in a way that provided truly appropriate and genuinely useful levels of service for all passengers in the area concerned. We also strived to provide a step-change in the way those bus services integrated with other modes, particularly rail.

We produced a wide-ranging document covering all aspects of the proposal, and a draft bus service specification for a Pilot Area covering North and West Wiltshire, which you can find at http://option247.uk/O247proposal.pdf and http://option247.uk/pilot_01.pdf

We did get asked the question regarding the potential effect on bus companies. Our proposed system remained commercially competitive - it's just that the competition is moved away from a daily fight for passengers, and is instead moved to competition for contracts / agreements reached to cover a number of years, during which operation is for the common good and growth of the particular flows. We argued that there was much to gain for bus companies in terms of the stability and element of financial certainty that these longer-term contracts had to offer, compared to reliance on ever-varying commercial revenues, or ever-dwindling shorter-term traditional local authority contracts.
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