The European Union’s Commission laid out a proposal for the liberalisation of the European inter-city bus market. As a part of the second phase of the Commission’s mobility pack, Brussels will allow bus operators to organise inter-city travels for journeys longer than 100 kilometers.
The move is following up on a decision by the Transport Council from February this year, and an even earlier push for liberalisation by the Commission from four years ago.
The Commission wrote on Wednesday that its Clean Mobility Package includes:
“The Directive on Passenger Coach Services, to stimulate the development of bus connections over long distances across Europe and offer alternative options to the use of private cars, will contribute to further reducing transport emissions and road congestion.”
It continues by stating that the mobility will therefore be more affordable, more high quality and ultimately a good deal for low-income earners.
While countries such as the UK or Sweden have benefited for a long time from liberalised bus markets and the competition it entails, others still largely regulate the service. Reasons for these regulations lie mostly in state-run or subsidised rail, which suffers from the competition of private bus operators. It is the same sort of argument that taxi operators use against the gig economy, or the disastrous 19th century British Corn Laws.
Germany is a very interesting case study of market liberalisation. This bus market liberalisation had necessitated a coalition between Merkel’s centre-right and the liberal democrat FDP, which was determined to break up the monopoly of the rail operator Deutsche Bahn.
The laws which had prohibited bus operators to run vehicles on routes where DB was already driving its trains, had been on the books since the Weimar Republic. It was literally market protectionism that was older than Second World War. Prior to the liberalisation of the bus market, intercity buses only accounted for 1.5 per cent of long-distance travel; a number that jumped to 15 per cent in four years.
In France, the liberalisation of the bus market which had been triggered by then Minister of the Economy Emmanuel Macron (which is the French media is still referring to them as ‘Macron’s buses’), had been vehemently opposed by train worker unions which feared large competition. Today, companies such as Flixbus or Isilines provide comfortable travel for low prices, in comparison to an expensive, deficitary, inefficient and heavily indebted SNCF.
The French state-rail has been so desperately effected by competition that it ran negative ad-campaigns against the carpooling service BlaBlaCar. The SNCF also introduced its own bus company, OuiBus, which despite its subsidisation by the French government, fails to compete against the private operators. Overall, the French bus operators work with a turnover of over 80 million euros, and created over 2,000 jobs. It generally does seem strange that in terms of public policy, we can actually say that Brussels is right to get inspired by the French this time around.
Part of the success of these long-distance coaches is that they have facilitated the travel of people who traveled little or not at all before the opening of the market. “These neo-travelers represent 20% of our customers,” said Roland de Barbentane, General Manager of Ouibus, to Le Monde this year. The bus market attracts low-income travellers the same way that the revolution of low-cost airlines has made European air travel simultaneously more popular and more profitable.
The Commission’s move will finally end decade-old restrictions which only served the special interests of affiliates of publicly run rail companies, which have managed to reduce mobility and access for the poorest of the poor, all while claiming to exist “in the public interest”.
Bus market liberalisation ultimately means: more choices for consumers, more competition on the market, higher quality for lower prices. The Commission is congratulating itself for its move for policy proposals that will lead to lower emissions productions, and that remains to be seen; but far more importants is the increased mobility factor for the European continent.
If we account for the fact that it has never been as comfortable and cheap for a low-income family to got on a city trip from Berlin to Hamburg or from Paris to Bordeaux, then we recognise that free market public policy is not only good governance, its a matter of social justice.