Overall impacts of local bus deregulation in Britain

Abstract

This paper considers the impacts of local bus deregulation in different types of area in Britain, focussing on changes which have occurred between 1985/6 (the last full year before deregulation) and 1987/8. The actual ridership changes over this two year period are compared with what would have been expected given conventional assumptions regarding fare and service level elasticities. In the deregulated area outside London, ridership fell substantially, and much more than expected, especially in Metropolitan areas. Reasons for this difference are explored. Unit costs have fallen, as has public expenditure, and although by our estimates operators in aggregate are now making modest profits, these are not enough to finance vehicle replacement in the long‐term. The role of minibuses is considered, as are future prospects for the industry.

Key words:

• Deregulation
• buses
• ridership
• fares
• service‐levels
• profitability