The Office of Fair Trading (OFT) has since March 2009 been carrying out a study into bus services provided to local areas around the UK.
They were concerned about the rising cost of bus journeys and their market survey has found that in many local areas a lack of competition may be the cause.
The Isle of Wight is highlighted in the report as one area with one very large player with high market share.
Following their five month review and subsequent Local bus services report (PDF), the OFT are proposing that local bus services are referred to the Competition Commission for a full investigation.
To help them gather information, they are asking the public to comment by 15 October 2009.
Competition reduces prices
One of the OFT’s concerns is that it is difficult for competitors start up. If this competition is made easier prices would reduce, as “we might expect that the threat of entry will encourage operators to keep prices competitive and service standards high.”
The report details what the OFT call “allegations of exclusionary behaviour in bus markets across the UK,” which translated means, a local bus company trying to stop other companies starting up and running bus service in the area they are already operating in.
The OFT point to their investigation and prosecution of Cardiff Bus for “predatory behaviour” as an example of this behaviour.
Background
The OFT reports that in 2007/8 there were 3.1 billion bus journeys in Great Britain (outside London) and the value of the local bus market in GB was £3.6 billion (2006/7) including £1.2 billion in tax payers support.
The Isle of Wight has two providers of bus services; Southern Vectis – who are part of Go South Coast, who are in turn controlled by one of the four large national bus operating groups, The Go-Ahead Group plc; and WightBus which is run by the Isle of Wight Council.
Southern Vectis Environmental and Social Report 2008
Comments
Interested parties can submit written views by 15 October 2009. Comments should be sent to:
Local bus services team, 2C/3
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London
EC4Y 8JX
Email: [email protected]
(Thanks to Adam for the contact details)
image: sermoa
