InterInter--City Busing in North AmericaCity Busing in North AmericaInterInter--City Busing in North AmericaCity Busing in North America

Association of Manitoba Municipalities AGMAssociation of Manitoba Municipalities AGMNovember 26, 2013November 26, 2013

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FRONTIER CENTRE FRONTIER CENTRE By By Steve Steve LafleurLafleur

FOR PUBLIC POLICYFOR PUBLIC POLICY

Decline of the US Intercity Bus IndustryDecline of the US Intercity Bus IndustryDecline of the US Intercity Bus IndustryDecline of the US Intercity Bus Industry

Ridership began a steady decline in 1960Ridership began a steady decline in 1960Ridership began a steady decline in 1960, Ridership began a steady decline in 1960, due largely to expanding auto ownership.due largely to expanding auto ownership.Airline deregulation in 1978 made faresAirline deregulation in 1978 made faresAirline deregulation in 1978 made fares Airline deregulation in 1978 made fares affordable to middle class families, affordable to middle class families, reducing demand for long bus tripsreducing demand for long bus tripsreducing demand for long bus trips.reducing demand for long bus trips.Decline was exacerbated by deregulation Decline was exacerbated by deregulation f i t it b i d t i 1982f i t it b i d t i 1982of intercity bus industry in 1982of intercity bus industry in 1982..

Declining Ridership in CanadaDeclining Ridership in CanadaDeclining Ridership in CanadaDeclining Ridership in Canada

The same trends reduced ridership inThe same trends reduced ridership inThe same trends reduced ridership in The same trends reduced ridership in Canada, but in slow motion.Canada, but in slow motion.Lack of airline deregulation and lingeringLack of airline deregulation and lingeringLack of airline deregulation and lingering Lack of airline deregulation and lingering crosscross--subsidization schemes have likely subsidization schemes have likely mitigated the declinemitigated the declinemitigated the decline.mitigated the decline.Only 38 percent of route miles are Only 38 percent of route miles are

fit blfit blprofitable.profitable.

Ridership Decline in SaskatchewanRidership Decline in SaskatchewanRidership Decline in SaskatchewanRidership Decline in Saskatchewan

Decline and Recovery of US RidershipDecline and Recovery of US RidershipDecline and Recovery of US RidershipDecline and Recovery of US Ridership

Why the Recovery?Why the Recovery?Why the Recovery?Why the Recovery?

Curbside busing. Pioneered by “ChinatownCurbside busing. Pioneered by “ChinatownCurbside busing. Pioneered by Chinatown Curbside busing. Pioneered by Chinatown buses”, expanded by buses”, expanded by MegaBusMegaBus, , BoltBusBoltBus, etc., etc.Smartphones made purchasing tickets Smartphones made purchasing tickets p p gp p gconvenient.convenient.Downtown to downtown service is convenient Downtown to downtown service is convenient and cheap for students and young professionals.and cheap for students and young professionals.Increasing hassle of flying made busing more Increasing hassle of flying made busing more attractive.attractive.DeregulationDeregulation

Competition Leads to Lower Fares in Urban Competition Leads to Lower Fares in Urban C tC tCentresCentres

Rural ServiceRural ServiceRural ServiceRural Service

Profitability of rural service has eroded due toProfitability of rural service has eroded due toProfitability of rural service has eroded due to Profitability of rural service has eroded due to declining rural populations and increased auto declining rural populations and increased auto ownership.ownership.CrossCross--subsidy schemes used to allow subsidy schemes used to allow Greyhound to serve entire provinces Greyhound to serve entire provinces unsubsidized, but this is no longer viable.unsubsidized, but this is no longer viable.Greyhound received $8.4 million in subsidies for Greyhound received $8.4 million in subsidies for M i b l b 2009 d 2011M i b l b 2009 d 2011Manitoba alone between 2009 and 2011.Manitoba alone between 2009 and 2011.Federal Government declined to subsidize.Federal Government declined to subsidize.

Public Monopoly Costlier than Private Public Monopoly Costlier than Private M lM lMonopolyMonopoly

Determining CostsDetermining CostsDetermining CostsDetermining Costs

With a public monopoly bus company hasWith a public monopoly bus company hasWith a public monopoly, bus company has With a public monopoly, bus company has the ability to set rates and can justify all the ability to set rates and can justify all costscostscosts.costs.With a private monopoly, company subject With a private monopoly, company subject to greater pressure from government andto greater pressure from government andto greater pressure from government and to greater pressure from government and riders.riders.O l t ll d t i t i tO l t ll d t i t i tOnly way to really determine cost is to Only way to really determine cost is to have competition.have competition.

LeastLeast--Cost SubsidiesCost SubsidiesLeastLeast Cost SubsidiesCost Subsidies

Pioneered by Washington StatePioneered by Washington StatePioneered by Washington State.Pioneered by Washington State.Adopted in Oregon, California, Colorado, Adopted in Oregon, California, Colorado, MarylandMarylandMaryland.Maryland.Has reduced costs while expanding Has reduced costs while expanding

i l li l lservice levels.service levels.Supported by Canadian Bus Association.Supported by Canadian Bus Association.

LeastLeast--Cost Subsidies Bring Down PricesCost Subsidies Bring Down PricesLeastLeast Cost Subsidies Bring Down PricesCost Subsidies Bring Down Prices

Manitoba ContextManitoba ContextManitoba ContextManitoba Context

Manitoba significantly liberalized intercityManitoba significantly liberalized intercityManitoba significantly liberalized intercity Manitoba significantly liberalized intercity busing in July of 2012.busing in July of 2012.Still requires 90 days notice to discontinueStill requires 90 days notice to discontinueStill requires 90 days notice to discontinue Still requires 90 days notice to discontinue service.service.Eli i t dEli i t d t i ti h tht i ti h thEliminated Eliminated restrictions on where they are restrictions on where they are able to offer service, or on the number and able to offer service, or on the number and

ti it f bti it f bseating capacity of buses.seating capacity of buses.

SourcesSourcesSourcesSources

Steve Steve LafleurLafleur. . InterInter--City Busing: A New Regulatory City Busing: A New Regulatory y g g yy g g yFramework for Canada. Framework for Canada. Peter Peter HolleHolle and Steve and Steve LafleurLafleur. . Getting More Value for Getting More Value for M R t t i th S k t h T t tiM R t t i th S k t h T t tiMoney: Restructuring the Saskatchewan Transportation Money: Restructuring the Saskatchewan Transportation Company.Company.JosephJoseph SchwietermanSchwieterman.. The Return of the Intercity Bus:The Return of the Intercity Bus:Joseph Joseph SchwietermanSchwieterman. . The Return of the Intercity Bus: The Return of the Intercity Bus: The Decline and Recovery of Scheduled Service to The Decline and Recovery of Scheduled Service to American Cities, 1960American Cities, 1960--2007.2007.J hJ h Sh i tSh i t Wh Rid C b id B ? AWh Rid C b id B ? AJoseph Joseph ShwietermanShwieterman. . Who Rides Curbside Buses? A Who Rides Curbside Buses? A Survey of Passengers on Curbside Bus Lines in Six East Survey of Passengers on Curbside Bus Lines in Six East and Midwest Cities.and Midwest Cities.