bus franchising

Why Mayors Should Consider Bus Franchising

Existing operators generally employ similar ticketing and intelligent transport systems, however when operating an EP these may need to meet higher standards.

Through franchising, mayors can manage farebox revenues and encourage bus priority measures. Furthermore, they can direct invest in networks of services with one operator.

Control

At the core of mayors’ consideration for bus franchising lies its ability to control local transportation systems. Bus franchising gives mayors more power over how these services are run; from developing integrated networks with trams and local trains to more cost-effective ticketing structures. Furthermore, franchising can improve timetabling and accelerate major improvement projects such as route priority or new bus lanes being implemented faster; franchising can even give mayors the ability to require operators use similar liveries on vehicles while setting strict emissions, seating and appearance standards across systems.

One way a franchising scheme can help is by intertwining the commercial fares of different operator areas and permitting cross-subsidy. This creates an incentive for lower operating costs and improved service reliability, while at the same time helping prevent overbussing and congestion by making it more expensive for operators to run buses that have little demand.

However, whether or not EP can achieve these benefits remains unknown. Political processes involved in forcing through re-regulated bus markets can be lengthy and disruptive for existing bus operators; any legal challenges by them to an EPS could incur significant legal and court costs that would ultimately fall on cities as liabilities.

While taking a more measured approach may have its own merits, interviewees indicated that small steps towards improving bus quality and consistency might be more successful than trying to implement major changes via franchising schemes.

It should also be remembered that any substantial investments already made by operators will be difficult for the public to recover from them. Furthermore, cities pursuing an EPS should do so alongside an extensive plan for bus franchising as this will facilitate any eventual transition towards fully franchised schemes more smoothly and seamlessly.

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Flexibility

Franchising gives authorities more agility than is possible under an Enhanced Partnership (EP). Franchising gives authorities control over changing routes and services as needed; ticketing systems; price capping; simpler timetables as well as ticketing system control are just some of the many issues under their purview, enabling authorities to build a comprehensive local transport system which offers passengers more efficient, cost-effective travel solutions.

EPs, by contrast, are intended to collaborate closely with incumbent operators by including them in decision-making at key milestones and ultimately having input on how the system functions. This allows the authority to ensure it works together on mutual interests rather than forcing predetermined outcomes onto operators.

However, some authorities and stakeholders express reservations over franchising models which grant too much control to them, since too much control could make introducing initiatives necessary to meet changing passenger demand more difficult. Some Combined Authorities (CAs) and stakeholders believe introducing franchise systems could compromise existing relationships with operators and compromise good working relations between operators and CA.

Greater Manchester bus patronage has been steadily declining over recent years and it is crucial that Greater Manchester City Area Authority (GMCA) finds ways to reverse this trend. Franchising could be one solution that GMCA uses to accomplish this; its emergence partly stemming from needing to rethink wider transport network while supporting economic development locally.

Integrating buses with other forms of transport, like trams and local trains, as part of an urban mobility revolution is key to ensure housing developments are adequately served by their transport network. Franchised systems could help coordinate bus plans with spatial planning so housing developments are served efficiently by bus plans – something vitally important when discussing devolution processes like those undertaken in Greater Manchester and its implication for its citizens’ ability to access transport options outside just car ownership. It is imperative that Greater Manchester be ready to embrace such revolutionary initiatives like other regions have done.

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Incentives

A franchising authority is responsible for specifying bus routes, services, timetables and frequencies as well as setting any service quality standards. They then place these specifications out for bids from operators interested in running these services – this allows mayors to ensure bus provision matches up with passenger needs while simultaneously meeting infrastructure needs such as bus lanes.

Franchising can provide mayors with an effective incentive for investing in bus priority measures and encouraging modal shift away from cars, as their decision-making powers can directly benefit from improvements such as reduced costs and higher revenues.

This will be particularly relevant if the mayor also oversees other forms of local transport such as trams or train services; creating an integrated public transport ‘offer’ that reduces duplication while maximising efficiency will make network design simpler, with integrated ticketing and timetabling services.

Franchised systems expose mayors to increased revenue risk if fare income decreases and operating costs increase, unlike Nexus’ use of Quality Contracts in its two case studies in this paper. Conversely, PTAs should find more suitable support under the Bus Services Act (2017) in terms of franchising powers available under that act.

Importantly, franchising authorities cannot create their own municipal bus company to win bids for bus service; competition must be used to select commercial operators and not create dual-brand systems such as TfL in London – these aspects mark a substantial change from informal contracts such as Quality Contract models and require new cultural mindsets from mayors.

Innovation

The Transport Act 1985 dispossessed local governments of control of bus services and transferred it to private companies that could run them profit-seekingly for themselves, leading to major underinvestment and low standards on buses resulting in poor service quality and fare increases that were unaffordable for most passengers.

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One reason London and other successful franchised cities, such as Nottingham and Reading, enjoy improved performance is due to their ongoing efforts at innovation, which focus on maintaining high passenger experience while controlling costs. Other cities that don’t follow this same model, like Columbus Ohio or Buffalo are not keeping pace with London in terms of performance gains.

Franchising can help leading cities create the changes they require, by giving mayors greater control of bus services by giving them full city networks with which they can set route frequencies and operating hours to provide equitable and efficient service to users. Furthermore, mayors with franchised networks also possess the authority to introduce bus priority measures – essential elements of shifting people away from cars towards buses.

Franchising models also enable mayors to set fares that will be cost-efficient for most passengers, making ticket complexity simpler for passengers across their city. Or mayors could set multi-operator fare structures with different concession entitlements – still depending on operators but often simpler to manage than having multiple single operator tickets with different pricing structures and acceptance rules.

Even when mayors possess the authority to set franchises, they must first prepare a business case that shows how the benefits outweigh costs and impacts, in addition to taking into account other potential courses of action that may be available to them. Unfortunately, this work can take considerable time, stalling any attempts at early reform; current levels of public finances also means authorities likely cannot afford full franchise models.