Setting the market free: deregulation of the bus industry. 4th Smeed Memorial Lecture, 29th October 1987.

[FIRST PARAGRAPH]Though he was not himself an economist, Reuben Smeed is well known to transport economists as the chairman of a committee which, in the early sixties, examined the use of congestion charges to obtain a rational use of scarce urban road capacity. (1) The Smeed report showed that in the absence of a proper road congestion pricing system there would be an excessive use of the private car, and, by implication, a sub optimum level of use of public transport. Although, to the best of my knowledge, Reuben never turned his mind to the issues of public transport regulation, the ready acceptance of public transport regulation and subsidy as second best proxies for road pricing in the late sixties and seventies was, I believe, founded on the Smeed logic

Deregulating the Bus Industry.

In its Buses White Paper, the British Government sets out its proposals for abandoning quantitative control of entry to and provision of local bus services. The logic on which the proposals are based can be reduced to four propositions:- (i) Deregulation will produce a competitive market. (ii) Competition will substantially reduce costs. (iii) A competitive market will improve resource allocation. (iv) A competitive market will not cause any significant undesirable spin-off effects. Each of these propositions is suspect. If there is any competition on bus routes, it will tend to be small group rather than large group. Active rivalry involving schedule matching and price wars may occur, as may collusion. Neither will produce efficient results. Even if a competitive result were to obtain, the resulting resource allocation would not be socially efficient. A first best optimum requires subsidies because the market is subject to external economies (the Mohring effect). If Government budget constraints operate, the second-best solution then requires cross-subsidies. Competition is not compatible with social efficiency in either of these cases. Nor will the competitive market solution optimise load factors. Quality competition, in the form of minibuses 'creaming' the best traffics, may also be socially undesirable. The White Paper authors underplay the significance of these resource allocation arguments, while exaggerating the likely impact of deregulation on cost efficiency. Even though some cost savings may be available they could be obtained anyway under a regime of competitive tendering for profitable as well as unprofitable routes. Competition for the market rather than competition in the market is required

Silicon-based organic light-emitting diode operating at a wavelength of 1.5 mu m

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Bus Deregulation: Reports of a Seminar Held on 20 June 1986

The purpose of the seminar was to provide a forum for the discussion of the emerging arrangements for deregulation of the stage bus industry. The seminar was chaired by Professor K M Gwilliam and Mr P J Mackie of the Institute for Transport Studies. Each of the four sessions was introduced by a speaker currently invovled in operating the new regime. It was agreed that a note of the discussions would be circulated to all participants. This note fulfills that obligation

L∞ spaces and derived loop spaces

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