5 July 2018

Corbyn is wrong – ‘leaving it to the market’ will improve bus services


Yesterday at Prime Minister’s Questions we had some relief from Brexit as the leader of the Labour Party asked about bus subsidies. He declared that “since 2010, her Government has cut 46% from bus budgets in England”. That seems a bit of an exaggeration from the figures I could find – which quote £2.21 billion being spent in 2016/17 down from £2.36 billion in 2010/11.

Jeremy Corbyn added that passenger numbers have fallen, fares have risen above inflation, and that bus routes have been cut every year. Again the official stats suggest there has indeed been a decline these last seven years – but rather a gentle one. There were 4.6 billion bus passenger journeys in England in 2010/11. That had fallen slightly to 4.44 billion in the year ending March 2017. Corbyn then asked: “Does the Prime Minister believe that bus services are a public responsibility, or just something that we leave to the market?”

I wish the Prime Minister had said: “We should leave it to the market.” Instead we got bland references blaming local authorities. The implication seemed to be that the council taxpayers should stump up to pay for more bus services.

Corbyn sought justification for increased subsidies to promote “our climate change commitments” and “for our air quality”. But over a billion pounds of subsidies already go into the Bus Service Operators Grant. This is a fuel subsidy, the impact of which is to reduce the incentive for bus companies to be fuel efficient.

Even if bus subsidies had been maintained, passenger numbers might well have fallen. The growth of online shopping is one factor in this. “Every morning I would see her waiting at the stop / Sometimes she’d shopped and she would show me what she bought,” sang The Hollies in their 1966 hit Bus Stop. These days she would be more likely to be waiting at home for the latest Amazon package.

Nor is there much logic in pensioners being provided with free off-peak travel on all local bus services in England. Many pensioners are rich and able-bodied. Why shouldn’t they pay their way? And where bus routes have been cut it is where the number of passengers they attracted was very small. Sometimes the subsidy came to £40 per passenger per journey. Does Corbyn really believe that was value for money?

Keep in mind that if £2.21 billion wasn’t going on paying for empty buses to rattle around country lanes then it could be used for tax cuts. If we want to help pensioners we could scrap VAT on fuel. Or if we want to safeguard community life in rural areas then we could cut Business Rates on pubs and small shops. Or if we want to help the poor then we could raise the threshold at which National Insurance kicks in for the low paid.

Some might grudgingly accept the economic reality but still feel that allowing a decline in bus routes is harshly unsentimental. Too Gradgrindian perhaps. What about the social aspect? The cheery camaraderie? The romantic potential, such as the example from The Hollies referred to earlier?

Fret not. It is not all gloom. If, as Corbyn put it, bus travel really did become “just something that we leave to the market” that could mean new opportunities. A huge factor reducing bus passenger numbers in cities is that the likes of Uber have made taxis much cheaper. What if the distinction between taxis and buses becomes blurred?

Chris Grayling, the Transport Secretary, suggested that “the nature of bus provision is likely to change over the coming years, with more Uber-style, demand-led services replacing traditional services”. His Cabinet colleague Liz Truss is a fan of Uber and recently declared that she would be the “disrupter in chief” backing insurgent business offering competition to cosy vested interests.

In the United States it is already happening. In Florida there has been a deal between Uber and the Pinellas Suncoast Transit Agency taking passengers to and from bus stops to address the “first and last mile” problem in the county. Pennsylvania has a similar arrangement. In the Canadian town of Innisfil, Uber provides “a ride-sharing transport solution” which the authorities have encouraged as being more viable than a new bus service.

Closer to home we have a rival to Uber called Citymapper. Last year they launched a night bus in the east end of London. “We built an app, people used it a lot, we analysed mobility data to find gaps in the transport network, found an opportunity in the night network in East London, and ran a night bus: CM2,” says the firm.

They add: “Minibuses are good for congested cities. It’s a vehicle type missing in cities like London and Paris, but found in many emerging markets. Minibuses are more dynamic and responsive than large buses. They can be a better fit for the geography of European cities with their narrow streets and road complexity.”

The difficulty comes with the regulations which they say “lead bus systems to run on outdated models.” It “doesn’t reward buses and drivers for passengers or experience. They must instead follow rules, driving up and down a number of times per day, independent of demand. Sometimes there are punitive measures for operational performance.”

Citymapper adds: “There’s a concept in the bus world called ‘headway’, i.e. where buses on the same route aim to maintain an equal distance. The assumption is that all bus stops are the same and passengers could come from anywhere. This assumption is incorrect and outdated. And therefore the manner in which buses are allocated and run across cities is inefficient. We’re in an era where we have data on real demand, and mobility patterns across days of the week, times of the day, and seasons of the year.

They could use the technology to reduce unnecessary traffic and congestion for the city but “regulation makes it hard to be smart.”

Not that they are giving up: “Apps have been made for cabs. But not for buses. Why? Well, it’s pretty challenging to match multiple people to the same vehicle and create a great experience in real time. We’re going to make it work.”

All they want is for the bureaucrats in Transport for London to let them get on with it. We need to break away from the mindset of rigid monopoly. The same principles can apply to the rest of the country. So “leave it to the market” does not mean that bus travel would inevitably decline. In different shapes and sizes it can still flourish.

All aboard!

Harry Phibbs is a journalist and blogger.