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History of Rural Bus Regulation


Guy 1.5 tons, 1920
Although the British experience is cited here a similar path towards deregulation has been followed in many countries. Rural bus regulation has existed in the UK for almost one hundred years and the results of the various strategies, ranging from essentially anarchy, through strict regulation, to complete deregulation, subsequently diluted as needed, provide useful lessons.

In the early days regulation was minimal as rural services were rare. In 1930 strict regulation was introduced which lasted until 1985. Bus transport was then deregulated. Subsequently changes were implemented to smooth out the rough edges. Recently, regulatory procedures and guidelines are being put in place, both in Britain and elsewhere, to promote public transport in isolated areas where deregulation and competition from the car had eliminated it.

Early history

Motorbuses competed with the tram in urban areas from around 1903. By 1910, with the introduction of the reliable C -series double-decker, it grew rapidly. In rural areas, regular bus services really began only after the first world war and developed rapidly during the 1920’s as the desire for mobility grew.

Guy 1927, 31 seats

Regulation was minimal, limited to locally-issued licences for drivers and vehicles. Safety inspections were not systematic: services were often uncoordinated and buses were sometimes decrepit, uncomfortable, noisy, and in poor condition. Without preventive maintenance, they often broke down. Legislation and the regulatory procedures necessary to enforce became necessary to protect the public.

Consequences of regulation

In 1930, strict licensing procedures were introduced covering vehicles, operators and their personnel, and services. The first two, concerned with quality regulation, covered their fitness and competence and were granted fairly routinely. These measures had undoubted benefits for safety and comfort, helped by innovation in bus design.

The third, however, covering quantity regulation, required public hearings for each contested route. They took into account whether the route was already served (which they were in most cases), whether the new service was necessary and in the public interest, and whether it was coordinated with existing services in the area. The applicant had to show proof of public support for his application, and provide a detailed schedule of the service proposed. Each route required a separate licence specifying schedule, fares and often even the specific vehicle to be assigned. Existing operators were free to oppose new applications which of course they did routinely.

At first glance these procedures and criteria seem reasonable enough. However, they led over time to a deterioration in service quality. Their application supposed considerably more knowledge of the transport market and what was best for it than the commissioners possessed. In any case they had neither the time or budget to analyse each application properly. Furthermore, since existing operators systematically opposed every application new applicants were easily shut out. Although some services did improve in regularity and coverage, in general, demand was not  satisfied to the extent it would have been with less regulation. Essentially, existing operators were protected from competition and as a result, preferred to provide services with guaranteed returns, for example, by limiting buses at peak periods, causing overcrowding and long waits at stops, and reducing if not eliminating off-peak buses instead of actively seeking unsatisfied demand and devising innovative ways of meeting it. On the positive side cross-subsidation from profitable routes did ensure that minimal service continued to be provided in some rural areas. It is likely that the growth of car ownership from this time was partly stimulated by the inadequacy of public transport.

Deregulation and its consequences

The system persisted for many years, with bus services concentrated in the hands of municipalities and a few large private firms. However, from the 1950’s onwards, demand began to decline, as car ownership become more widespread. The transport industry remained passive and did little to counter this trend until the early ’80’s, when it was severely shaken by deregulation. Now new operators could compete with existing operators with only minimal formalities. Route licensing was abandoned and operators could modify service conditions more or less as they wished. Considerable freedom was given to operators to charge fares reflecting costs of providing service, for example at different times of day.

Results were mixed at the outset and there was much instability, such as fare wars, buses clustered together at peak periods, lack of coordination and reductions and even closures of services in more isolated rural areas, previously cross-subsidised. However, deregulation, once the anomalies caused by over-zealous ideologues were ironed out, has proved to be a positive step for intercity and urban transport. They have improved both in quality and quantity as anyone who lived through the ’40’s and ’50’s can testify. Even average fare costs have not risen sharply due to the greater freedom to match fares to costs of providing service, and to provide ones that respond to the nature of demand. In general much innovation has taken place despite the serious competition of the private car.

Rural transport today

Transport in rural areas lost out from deregulation and overall mobility has declined in many developed countries, notably in North America.. Close regulation had ensured minimal service through cross-subsidation, but this was now discarded, and the very high costs of providing service with large conventional vehicles makes it impossible for private operators. As a result companies discarded marginal routes to concentrate on inter-city transport.

Computer-based technologies now make it possible to provide innovative demand-responsive services. These can be based on formal structures using small vehicles or shared taxis or informal ones providing seats in private cars on a cost-sharing basis The latter are now well established in many countries for inter-city travel.

In general, their implementation will depend on the existence of a national mobility policy (and the political will that must underly it) seeking to reduce rural exclusion and of course global warming, by reducing car use. Formal structures require government subsidy, as cost-based fares are high due to long travel distances and few and dispersed passengers. However, licencing procedures can be light in terms of service quality and quantity. Market entry should be easy easy and service quality sufficient to attract even car users. Operators can be individuals, formal or informal cooperatives or profit or non-profit entities, possibly based in one of the villages served.

Regulation in developing countries

Attempts at regulation in developing countries are doomed to fail as long as the necessary structures are weak and undermined by bribery. They become an elegant mechanism to transfer income from users and operators to the police and their controlling hierarchies. As can be seen from other pages, the best approach is essentially hands-off, with hopefully generous assistance to promote rural mobility through the use of accessibility planning and intermediate means of transport.