As someone who has run buses extensively in London and elsewhere, I am often asked questions such as, “is it easier or harder to do it in London, then?”
This is naturally of interest to people who have worked in one regulatory regime but not the other and, of course, has a new relevance now that “London-type franchising” is being introduced in other areas, and indeed made easier everywhere by the new government.
My answer is usually that some things are easier and others definitely more difficult from an operator’s point of view and, while it is not really “better” or “worse”, running buses in London is certainly different.
Don’t misunderstand me — many aspects and principles of operating buses are just the same inside or outside of the capital, though the relentless nature of London’s roads and the length of the operating day inevitably influence that.
There isn’t an aspect of our performance that [TfL] doesn’t measure, rank and expect to be right
The main differences arise from the contractual relationship between you as an operator and Transport for London (TfL).
In Stagecoach London, we still think of the people who use our buses as our customers and I believe it would be wrong to do otherwise, but actually we have only one customer: TfL.
It’s TfL’s network not ours and, as they are paying us to run it, it naturally holds us accountable. There isn’t an aspect of our performance that it doesn’t measure, rank and expect to be right. The scrutiny is therefore more intense and direct than it is elsewhere and, as a company, you need to be set up not just to operate to the standards expected (and provide all the data and information required) but be able to demonstrate that you are.
As it is TfL (and the Mayor) who make all the decisions on routeings, frequencies, hours of operation and fares then perhaps that makes it sound as though commercially London is an uninteresting place to operate. Believe me, that’s not correct.
The relentless tendering process is endlessly changing and operators need to be on top of what’s happening in the market, what they think their competitors are up to and thinking about innovations.
Winning tenders is easy; the difficult bit is getting your bid to be the right balance between being enough to accurately cover your estimated costs and desired margin while still being competitive enough to win.
Those costs need to include all your assumptions, among many others, about how good your performance will be and how much you are going to pay people over the next seven years — and you get one chance to get it right.
Get it wrong one way and you are saddled with an unremunerative contract for years to come, while getting it wrong the other way means you won’t win in the first place. Keeping your depots full and your fleet optimal is a constant challenge.
So, certainty of contract revenue can seem attractive but, as some of it is performance-related, it isn’t really guaranteed at all — and, of course, your cost is not fixed. You also don’t have the usual tools at your disposal, such as revising service or fare levels when circumstances change unexpectedly.
All in all, it is a high-risk and competitive business requiring experience and know-how.
I was a little surprised when I came back to London a few years ago that the Confederation of Passenger Transport (CPT) wasn’t a major factor. That’s changing now as there are more problems of mutual interest for operators to legitimately work together on, and our trade body is becoming as important for us as it is elsewhere, something that in my current role I’m keen to advance.
I’ve written a little in this column about how London’s bus market works from an operator’s point of view. In a future one, I’ll cover current problems in that market as there are aspects that are not working from TfL nor the customers’ viewpoint, and again that may be instructive for other places making the case for change to a similar system.
