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STARTING A BUS SERVICE

8th March 1986, Page 35
8th March 1986
Page 35
Page 36
Page 37
Page 35, 8th March 1986 — STARTING A BUS SERVICE
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Which of the following most accurately describes the problem?

It should be possible to start profitable bus services after deregulation. Noel Millier presents a step-by-step guide for prospective private operators

N CASE there is still a CM reader who is not yet aware of it, from October 25 road service licensing in at Britain (other than in Greater idon) will cease and the local bus Mess will be open to all comers. le Department of Transport has n spending money on advertising the : to potential local bus operators. It s that by opening up the market the ilic will benefit from competition and better value for money. It is keen to -act newcomers and wants coach ,rators, hauliers and taxi and hire car npanies to have a go.

io is there money in it If route ential is fully investigated and ntitied the answer must be 'yes'. But r new operator will always find iself in competition with the

umbent operator or its successor. :h competition need prove no more a eat than the competition in any other iere of business. If a new service meets a need, whether its a newly stimulated or existing, which is not being adequately met at present, and it operates reliably at an economic and reasonable fare, then it has as much chance as any high-street business of success.

Obtaining a licence

It must he understood at the outset that deregulation does not mean freefor-all. Any newcomer who is not already a PSV operator at present will need an operator's licence. Taxi or hire car firms will be able to apply for a form of restricted operator licence allowing a couple of minibuses to be run.

Obtaining an 0-licence should not be an insurmountable problem although anyone wanting to start a bus service, will need to be suitably qualified, have adequate financial resources and be of good character.

New or existing route?

Once the licence is secured the route to the operation has to be decided. The operator will eventually have the choice either of running a new or existing route on a commercial basis, or he can try to win a contract to operate a subsidised service.

Unfortunately, the opportunities for registering commercial services are limited during the transition into deregulation because services to be operated from October 26 to the end of January 1987 had to be registered with the local Traffic Commissioner by the end of last month. However, from the end of the initial period (until January 31, 1987) any service can be introduced provided the commissioner receives the necessary registration form 42 days before the service is scheduled to start operating.

Essential reading for the prospective local bus operator should include The Transport Act 1985, Preparing for Deregulation (the DTp guide to the arrangement for providing local services during 1986) and The Route Towards Tomorrow's Buses, which is a plain English guide to deregulation published by the Bus and Coach Council and available to non-members for C4.95.

Both guides cover all the statutory requirements for transition and as well as outlining the definitions of a local services, the entitlement to fuel duty rebate and the anti-restrictive practices elements in the Act.

Operation options

When the legal hurdles have been overcome various types of operation can be considered. The easiest route to take is the least challenging — the subsidised one.

In areas outside London the counties or (or in the metropolitan areas the Passenger Transport Executive will soon start putting bus routes out to tender. In Greater London, London Regional Transport has already started doing this.

Routes being tendered are those not provided by the free market and therefore not commercially viable. But a new operator could, after looking carefully at the market, submit a nil tender or register a route as commercial if he wants to after the initial deregulation period. In any event, it is worth discussing plans with the county or PTE.

If subsidy is required the counties and PTEs can invite tenders for contractors wishing to supply buses on a minimum subsidy contract or a minimum cost contract.

The minimum subsidy contract is the more challenging of the two: the operator keeps fare revenue and thus has every incentive to increase it.

The minimum cost contract, which is favoured by London Regional Transport, entails the operator working for a set fee with the authority keeping the fare box revenue. This is safe and predictable but there may be penalties if the services are not run in accordance with the contract.

Finally, it would be a mistake to think that because deregulation does not extend to Greater London, the only route to starting a bus service in London is via an LRT tender. It is possible to design and operate a new London bus service either by obtaining an LRT agreement or applying for a road service licence or London Local Service licence from the Metropolitan Traffic Commissioners. If the market is properly identified, and the service can be proved to be safe to operate and i the public interest, there is no reason why a licence should be refused.

Identifying opportuniti■

If commercial operations are to be launched from scratch, a great deal o preparation is needed. Existing opera still have much to learn — particularl the National Bus Company subsidiar launching new minibus operations.

Assuming the area destined for the operation is set by the gegraphical location, preparation should be comprehensive. This should start wit complete analysis taking in the locati■ of housing and population trends,

A large-scale map should be markc with likely travel needs from the area of high population. Particular heed should be taken of the type of housin and social structure of the area. In particular, car ownership and average age groups should be identified,

High car ownership in itself does n rule out success for a new bus route; potential operators should look at fac such as the cost and ease of car parkii at the main destination and en route.

Potential sources of business arc anywhere where people are likely to want to travel from or to, such as shopping centres, churches, schools, doctors' surgeries, council offices, hospitals, and entertainment centres including pubs, sports clubs, cinemas and parks.

Having established where people ar likely to want to travel to and from, existing travel modes should be taken into account. As well as existing bus services, the location of car parks and areas of restricted car parking should identified. Similarly, any potential school bus or regular staff contract movements should be looked for alon

rail interchange points and other I services.

he April issues of Notices and eedings, published by the Traffic nmissioners, will contain details of crvices registered as commercially Ile. These, together with any bible bus timetables, should be lied.

xisting services should be observed, passenger opinions on service lity, fares and times should be ght. The large-scale map can then be d in with details of existing vision. Colours can be used to icate service quality so that any weak ts and thus opportunities can be nified. It is a mistake to think that y existing bus routes are worthwhile. :ertain areas deeper penetration into Bing areas and new links can nulate new markets and increase nand.

Selecting vehicles

/ing identified an area of potential iand, the next stage is to outline Tly the route and decide on the type ,chicle likely to attract most iengers :nid make most money. Ainibuses are in vogue at the moment are undoubtedly convenient to Tate. Maintenance is straight forward local garages can be involved in licle supply and repair. But before king any vehicle decision we suggest t

CM 's Tables of Opera,* Costs uld he essential reading.

lie shorter the route, the more .active minibus operation should ■ ve. A high-frequency minibus service in area used to infrequent big buses y well attract new passengers, but have to be competitive and limited acity can mean limited revenue. The re journeys possible per day, the more attractive the mini will become.

Routes must be studied in detail, and that study must include taking vehicles over them. Remember that conditions can be placed on 0-licences if any route is thought to be dangerous or likely to cause unacceptable congestion.

The service registration form requires details of vehicle size and location of stopping places, but this does not preclude the possibility of offering a hail-and-ride service on quiet roads.

Whatever size of bus is decided on, and generally bigger buses operating with high passenger loadings have the greatest profit potential, the roads covered must be suitable. As well as obvious obstructions, such as bridges and width restrictions, the prospective operator should establish that his bus can negotiate all corners and road junctions without encroaching over the centre line of the road, and that there are no places where the sight for car drivers and other traffic would be restricted and cause an unacceptable hazard.

the conditions on the route at night should be checked. If the residents rely on on-street parking, son-le estate roads could become impassable for a large vehicle.

Step heights, and probable loading times should be remembered when selecting suitable types of vehicle. If is a high proportion of potential passengers are old or are mothers with young children a high step height could be offputting.

Marketing

As soon as all the legal preliminaries, route surveys, vehicle selection fare levels have been sorted out, serious marketing becomes necessary. It is in marketing that the potential operator can learn from NBC operators. Assistance from a consultancy, such as the London-based Best Impressions, could be useful: a strong credible image will be necessary in establishing new service and keeping out competition. In addition to a good and catchy name, a bright livery and associated publicity should be adopted.

Any service costings should include printing, painting bus stop signs and other marketing tools.

The schematic route maps used on many of the new NBC minibus routes which arc now proliferating are attractive and can be produced in the style of the operator. They can be displayed on vehicles, on bus stops, distributed door-to-door, given away on buses and in shopping centres and be used in local paper advertising.

An attractive image can also be presented in promotions conducted jointly with supermarkets and other commercial establishments served by the route.

The need to market the service effectively will remain once the launch period is over to protect the route from predatory competitors. The need to maintain the appearance and image could well mean a constant and costly battle with vandals.

But it is possible to profit from buses by tailoring a product to meet demand. If the preparation is started now it is possible that the operation can be ready to be launched at the end of the initial deregulation period — January 31, 1987 — by just giving 42 days notice to the Traffic Commissioner.

Any other service timed to start from D-day (October 25, 1986) should have already been registered with the commissioners and changes can now only be made with the support of the counties or PTEs and with "good cause".


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