Bus Transport Essay

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Bus Transport A) The nature of the competition in the bus transport market is very specific. The article suggests competition is used to keep out new entrants to the market thus maintaining market share for the larger firms, "active competition takes place between small operators or between a large and a small operator." Further evidence suggests the competition was not of substantial benefit to the consumer and only used to get one over on the firms rivals, "more services run on routes which where already reasonably well serviced." However some methods of competition showed reasonable benefits to consumers, "charged lower fares than the incumbent." Yet in the long run predatory pricing is not a good thing, as it will…show more content…
Buses have become nearly 50 % more efficient with a 42% drop in cast of running and operating per mile. This could be due to improvements in technology and transport replacing older models or the fact the firms have to be just generally more efficient to survive when there is high competition. Maintenance cost may have fallen because of economies of scale with firms buying bulk parts, as buses are identical. The area of service has increased by 24% providing transport to more remote areas. This is a large benefit to consumers where routes are subsidised by busier routes to provide an overall more beneficial scheme. This figure could also mean the frequency of buses has increased, again another improvement of the service. The operating costs for passengers has remained constant as no extra on board services are required. The only areas, which could increase, are both littering and vandalism and these are both controllable with restrictions. A slightly negative aspect for the industry is the actual use of the buses has decreased by 27% with alternative modes of transport being more attractive, and the cost of cars becoming more affordable. The figures highlight an area where cost cutting has occurred with a drop in wages for drivers in order to reduce prices. Either a cause or result of the decline in the bus transport market is the reduction and investment from the government and local

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