ASPECTS OF BUS SERVICE DEREGULATION --TRANSPORTATION PLANNING METHODS. PROCEEDINGS OF SEMINAR C HELD AT THE PTRC SUMMER ANNUAL MEETING, BATH UNIVERSITY ENGLAND, 7-11 SEPTEMBER 1987, VOLUME P290

Prior to deregulation of stage bus services under the provisions of the 1985 transport act the transport and Road Research Laboratory undertook a number of studies to examine the likely consequences of deregulation. This paper describes the use of computer modelling to investigate some limited aspects of opening up the provision of bus services to competition. One such exercise represented the behaviour of two or three operators competing along the same route, each one adjusting the number of buses operated and the fares charged in order to either maximise its own profits or maximise its own operations subject to a fixed rate of return. The results of this competition, in terms of how many operators stayed in business, the number of passengers attracted, and the fares charged and level of service supplied, were examined in relation to a number of assumptions about the operating costs of the competing operators, and the way in which the costs might be reduced in the face of competition. A separate modelling exercise represented a large network of urban bus services and estimated the effects (in terms of passengers carried, fares charged, service frequencies, services discontinued and net economic benefit) of making each service cover its own costs. In the particular case examined, this removal of cross-subsidy between services caused a 2 per cent loss of total patronage, and a net economic disbenefit equivalent to 2.5 per cent of the total generalised cost of travel. A very modest reduction in average operating costs would offset any such disbenefit, but some services would probably disappear even with lower operating costs unless supported by external subsidy.(a) for the covering abstract of the seminar see IRRD 816404.