“INTERCITY AND LONG-DISTANCE BUS AND COACH REGULAR LINES” IRU WORKING PAPER.

A COMMENT ON AN EARLY VERSION.

Paolo Beria (with Raffaele Grimaldi)

DiAP – Politecnico di Milano, Italy

In this note we make some comments and suggestions on some issues presented in the IRU working paper

“Intercity and Long-Distance Bus and Coach Regular Lines”, based on a first draft version of the paper. In

the second part of the note we briefly discuss the expected demand of intercity coaches and give some

policy indications.

1 A COMMENT ON THE PAPER

1.1 PUBLIC VISIBILITY OF LONG DISTANCE COACH SERVICES

We strongly agree that the existence of long distance coach services is still weakly perceived by people in

many EU countries, and we think communication to be a key factor in the future development of the

industry. Paradoxically, the effort in this field can be limited and the outcome huge, but effective

communication is made difficult by the fragmentation of the firms and their dimension. Journey planners

are less and less “niche” instruments, available only to experienced internet users. In this sense, the air

sector experience thanks to its intrinsic interoperability is leading other modes. Rail is slowly adapting.

Many strategies might be developed to improve the visibility of coach services, and the development of a

multi-modal EU journey planner would be a much welcomed and effective initiative. However we think

that, before waiting for someone else to do it, it would be quicker for the industry to build itself a

comprehensive search engine with all the coach supply. This will let people perceive the whole bus network

of services as unique, just as it happens now for the air transport.

We understand that, this being in many countries an industry moving from former monopolies to

competition, many firms might not be willing to give away some informative advantage, but we think IRU

and national associations could play a role in promoting this activities and explaining the mid-long term

benefits of an increased visibility to their members.

To cope with this, as a third option, the associations could help single firms, on a voluntary basis, to adopt a

standard format to release data on their supply. These standards already exist (for example GTFS1) and

should only be promoted among firms. Once provided, data is easily introduced into the most commonly

used tools to plan personal mobility (Google Transit, etc.), as it happened for many other public services.

Once that early comers start this practice, also their competitors will follow, if adequate support is

provided.

���� 1. EU journey planner: centralized, multimodal tool, potentially extremely effective. But complex, costly, long

and not fully manageable by the industry.

� 2. IRU journey planner: centralized, but not multimodal. Less effective than the European one, but decided

and implemented by IRU without waiting for others support.

� 3. Open journey planners: IRU (& national associations) help single firms, on a voluntary basis, to adopt a

standard format to release data on their supply. Data is included in existing third part journey planners

(Google Transit, but also air search engines as already happens for some trains).

1 General Transit Feed Specification: https://developers.google.com/transit/gtfs/

1.2 TERMINALS AND PUBLIC ADMINISTRATIONS

Terminals represent a core issue for coach transport, even if we must recognize that the possibility to

make many kerbside stops (even on demand) represents one of the very strength of road transport with

respect to other transport modes, increasing geographical coverage and providing better door-to-door

links. This characteristic, where existing, must not be lost in favour of a standardised “intercity model”.

In fact, we think that the “intercity model”, i.e. a regular, fast and frequent connection between some

cities and using main terminals is not the only type of service (even if it is the right one in some contexts).

Bus is the best option to quickly and reliably connect cities with dispersed villages of a region. In this case,

terminals are, paradoxically, not needed: bus can easily stop frequently at destination, nearly reaching a

“terminal-to-door” system. What is needed is a good communication and the reliability of the service (fixed

main stops, constancy of services, availability of information with all media: from the real time smartphone

to the timetable in the neighbourhood shop).

Going back to intercity services and their terminals, it is however clear that some (usually local) public

administrations don’t rightly perceive the benefits of having good intermodal terminals in strategic

positions in the city and tend to push coach terminals outside city centres, by claiming to ease congestion

and air pollution and ignoring the lost benefits of good coach connections. Coachway interchanges right

outside cities, if well connected with public transport to the city centre and close to major road

infrastructures, might represent a good compromise – easing integration in the city and allowing faster and

cheaper and more reliable connections by avoiding the more congested central city roads. Moreover this

solution might be considered also when city terminals already exist.

hostility(terminals outside city centres, claiming to reduce congestion)

integration(terminals as a part of multimodal

interchange stations)

expulsion coachway interchanges city terminals

Marginality

Problems for remaining users

Progressive loss of users

Lower accessibilty and need for

effective linking infrastructures

Marginality and lower visibility

Higher commercial speeds

Easier integration in the city

Long diversion times

Higher visibility

Possibly difficult integration

with the city structure

The possibility of financing high quality multimodal terminal using European funds would obviously be

much welcomed, in particular it might also help the industry to show local administrations on the full

benefits of multimodal terminals. The benefit of being included in the European planning, and TEN in

particular, is however not only economic: the “label” of European corridor, extensively used to push in

front of public opinion some purely national infrastructures, could be a powerful source of legitimating for

coach services. Moreover if this has no or limited cost for public budget.

1.3 COACH TRANSPORT AND THE EU TRANSPORT POLICY

We agree that EU transport policy is neglecting the role of coaches in intercity mobility, by concentrating its

attention in supporting only rail, maritime and partially air transport. However, a sound transport policy

aiming at a global sustainability – in its three aspects: economical, social and environmental – should

evaluate the best mode mix using cost-benefit analyses: we believe that, if correctly considering the costs

and the benefits, coach transport would be given a more significant role in such a framework. This vision is

reinforced by transport literature, suggesting that in countries where competition in long distance services

among bus and rail companies has been allowed, the overall usage of public transport has increased and

better bus and coach services generated new users which are mostly diverted from cars, rather than

subtracting them from the rail.2

This fact lays in the general problem of the role given to coach transport by national (with few

counterexamples) and European administrations. Bus is often seen as a corollary or, at best, as a support

mode for rail. This might be a good strategy for regional integrated transport networks. But when looking at

the long distance, the picture changes. A healthy competition, as we will discuss later, is capable of really

improving services and prices for both coach and rail users. When this is not feasible (because of various

reasons), a different integration can be applied: buses must be not only “feeder” of rail, but also

substitutes of rail PSOs on routes with low demand density, which are no more sustainable in a period of

public budget constraints.

2 WHICH PERSPECTIVES FOR THE FUTURE?

2.1 EXPECTED DEMAND

A discussion on demand must be clearly separated between existing services (the “rail ancillary” ones and

the historical ones) and possible new services in competition with rail. Italy is an exceptionally clarifying

example of this dichotomy.

Italian coach market has a long tradition in the private sector and an important (sometimes essential) role

on some relationships. These are the North-South and Rome-South routes (that supported ancient internal

immigration and now serve workers and students), plus a role on a super-regional scale inside the Centre

and inside the South, because of the structural weakness of rail transport.

On these routes, coach market is fully consolidated and perfectly capable to compete with rail even if not

benefiting of PSOs. In this case liberalisation is capable of generating new demand thanks to better

services and better marketing and thanks to the slow but ongoing “gentrification” of users (from

elderly/students to general users, including tourists).

A second market may exist in Italy, but it is only potential. It is the market now in the hands of rail transport

on the main routes (e.g. across Northern Italy or between northern cities and Rome). Here coaches do not

exist and must catch rail demand or car demand that does not use rail for capillarity, convenience or price

reasons. In our opinion the main results could come from the low cost segment between main cities, as rail

is becoming more and more expensive (especially if not booked in advance enough), but the capability of

enterprises might invent further types of services (e.g. direct buses from small cities to main cities).

A third opportunity might come from the reconfiguration of rail PSO, where existing. The Italian State

spends 250 M€ for subsidized long distance trains (approx. 7 billions paxkm/year, as estimated by rail

incumbent). Some of these routes must be served with rail because of density. But some others might be

totally reconsidered and supplied, again under PSO conditions, with a mix of buses, rail and air transport.

This could probably save money or improve services at the same cost. Recently some night trains have been

cut due to lack of money (but soon reintroduced partially) and in the meantime the bus industry easily

covered the gap in supply, at no public cost.

2 See, for example: Van De Velde D. (2009), Long-Distance Bus Services in Europe: Concessions or Free Market?,

Discussion Paper No. 2009-21, Joint Transport Research Centre, ITF-OECD.

In conclusion, an estimation of potential demand for the industry is not possible now without a model (and

it would be difficult even so) and heavily depends on initial conditions. However, at least three totally

different sub-markets exist and must be supported differently.

2.2 (SOME) PRIORITIES AND POLICY ACTIONS

1. One of the main strengths of coach industry in transport policies is that, today, no relevant

subsidies to coaches exist. This specificity must be used to enforce the position towards other

modes and in this sense the request for extra resources could be not strategic. At the same time,

in some cases buses could allow money savings compared to rail PSOs. It is the only case in which I

suggest that lobbing for extra-resources could be worthwhile.3

2. The main point that needs the industry to concentrate on is the concept of Universal Service. It is

not written in laws, but many policy makers confuse in their mind the “positive” concept of

Universal Service with that of Rail Universal Service, which is clearly a nonsense. The right must be

to mobility (or to quality mobility), not to rail mobility. This concept must be strengthened in any

possible way and air sector could be an ally in some cases. Overcoming the rhetoric of rail, that

allowed the EU and States to spend billions on weird and weak long distance corridors when air

was already revolutioning the mobility of Europeans eroding demand to trains, is an essential

starting point to start any policy in favour of coaches.

The point to be strengthened is that rail has an important and increasing role in specific contexts,

mainly those with actual (or potential) high density of demand. But where demand is sparse in

origins and/or destinations, rail becomes ineffective and expensive. This is the context of PSOs in

which bus must play a role. To make this possible, the industry must be active in showing the

financial benefits of a different form of PSOs on some routes, stimulating governments thanks to

the possibility of saving money of treasuries and citizens.

3. In terms of regulation, an homogenization/simplification of normative is useful to help foreign

investors to enter in other markets despite the disadvantage of knowledge of the legislative

context. At the same time, some forms of control to prevent disruptive competition could be

introduced: competition should not kill both the incumbent and the newcomer. It is likely that in

many contexts (typically, where rail is dominant) there is enough space for all the potential efficient

players. In general, the potential market in some countries is so large that newcomers can often

start with new routes without influencing the incumbents. In this sense, any legislative constraint

must be removed. When true competition will be more mature (i.e. when all the firms have had the

time to potentially evolve, if capable to do that) a full competition in the market will truly evidence

the best players. In the air industry, the newcomers were initially small compared to incumbents,

some of which survived and evolved even if starting from a totally inefficient situation. Others, the

“unfittest”, would have had no chances anyway.

3 Environmental and “comfort” counterarguments can be easily replied, being the first true but very weak and the

second irrelevant since demand for these services exist, especially if at low price.