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Local bus services market study questions and answers

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Why are we doing this?

We want to examine whether competition in the bus industry is delivering the benefits that bus passengers want. This is a complex area and we want to improve our understanding of the market.
 

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How long will the market study take?

The initial phase of the project involves evidence gathering and analysis to build up a picture of competition across the many local bus markets throughout the UK. Further work will depend on the outcome of that initial phase. A decision may be taken to end the study after the initial phase, with the findings being used, for example, to inform the OFT's mergers programme and by local authorities when tendering for local bus services. We could also continue with further work including, for example, more in-depth analysis of the state of competition and the drawing-up of detailed recommendations. If the study does proceed to a second phase, we intend to complete it before the end of 2009. We aim to provide an update on the timetable in the summer of 2009.

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Is the whole of the UK included in the study?

Yes.
 

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Are we looking to go back to the days of regulation?

That isn't really a question for us. Our study is focused only on competitive arrangements within the existing regulatory framework - whatever that happens to be. The study will cover London and Northern Ireland as well as the rest of the UK.  Each of these areas has a different regulatory regime. London, for example, is regulated with services put out to tender by Transport for London, whereas the rest of England, and Scotland and Wales, are de-regulated. In Northern Ireland many services are state provided.
 

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How will we be gathering evidence?

By request. Parties will be invited to submit information to the study and we will be talking directly to many stakeholders.
 

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What happens once the study is completed?

Possible outcomes from a market study include one or more of the following:

  • Giving the relevant market a clean bill of health
  • Publishing information to help consumers
  • Encouraging firms to take voluntary action
  • Encouraging an industry code of practice
  • Making recommendations to Government or to sector regulators
  • Investigation and enforcement action against companies suspected of breaching consumer or competition law
  • A market investigation reference to the Competition Commission. 

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What market share do the 'big five' bus operators currently have?

Altogether, the five provide about two-thirds of the services in the UK. Our study is not only focused on the large bus groups however - we want to speak to smaller operators as well. (Note: The big five are: First Group; Stagecoach; Arriva; Go-Ahead Group; and National Express.)
 

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Why aren't we looking at intercity routes?

Historically, most of the allegations of competition problems have been about local bus markets. 

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Is the new Transport Act the reason for doing this study?

No.  Although the new Act does create a new operating environment for Local Authorities, Passenger Transport Executives and bus operators, which might usefully be informed by our findings, our study will be looking at issues that extend beyond the provisions of the new Transport Act.  We will take the recent changes into account when we conduct the study.




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