Bloomberg News

U.K. Bus Operators Face Measures to End ‘Stagnated’ Competition

December 20, 2011

Dec. 20 (Bloomberg) -- Competition in Britain’s local bus market has “stagnated” and service should be improved with measures including multi-operator ticketing systems, the U.K. antitrust regulator said.

Five of the 1,245 bus companies in the U.K. carry more than 70 percent of the passengers, the Competition Commission said in a report today. They are Stagecoach Group Plc, National Express Group Plc, FirstGroup Plc, Go-Ahead Group Plc and Deutsche Bahn AG’s Arriva unit.

“In too many areas of the country, competition has stagnated and the incumbent providers know that they face little in the way of a serious challenge,” Jeremy Peat, chairman of the local bus market investigation group, said in a statement.

Many bus operators have “little or no competition,” resulting in less frequent service and in some cases, higher fares than would be paid if there were more rivalry, the regulator said. “What we want to do is open these markets up to sustained competition,” Peat said.

The regulator recommends introducing restrictions on incumbent operators “over busing” routes to discourage new entrants, and ensuring that competitors get access to bus stations managed by other companies on fair terms.

The regulator also called for changes in how local governments handle bids for contracts and “close scrutiny of bus mergers” by the Office of Fair Trading. The OFT referred the bus market issue to the antitrust regulator in January 2010.

--Editors: David Risser, Tom Mulier

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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