Office of Fair Trading proposes referral of local bus services to Competition Commission

The OFT has today published its market study into the supply of local bus services and proposes to refer the sector to the Competition Commission (CC) for more detailed investigation.

In a five-month investigation into the £3.6 billion industry, the OFT found evidence to suggest that limited competition may be leading to higher prices for bus users. 

The study has identified a number of features of local bus markets that could prevent, restrict or distort competition in the sector. These relate both to commercial services and services subsidised by local transport authorities. Issues include:

• a situation where the majority of local routes are operated by a small number of large bus companies
• higher fares in those areas where operators with a strong market position are not challenged by a large, well-resourced rival
• many complaints alleging predatory behaviour of incumbent firms designed to eliminate competition from new entrants, and
• low numbers of bids for supported service contracts in many areas, with just one bidder for a quarter of tenders.

Click here to read the OFT Press Release in full and to download the study.

CPT's Director of Communications John Major, is quoted on the BBC news Website: "Bus companies operate in highly competitive local markets and it is always in our interests to keep prices competitive to attract passengers out of their cars and onto our services."

"There is a great deal of competition between bus operators, large and small, although the biggest competitor for the bus industry is the car."

To read the article in full click here.