Britain's local bus operators are to be investigated by the competition regulator after the Office of Fair Trading (OFT) ruled that a lack of competition may be forcing passengers to pay higher fares. The OFT said on Thursday that a five-month investigation had uncovered evidence of practices that "could prevent, restrict or distort competition" in the sector.
These include cases of higher fares in areas where operators are unchallenged by significant rivals, and complaints alleging major bus groups are destroying new entrants through predatory behaviour. The findings were swiftly rejected by the Confederation of Passenger Transport (CPT), which represents bus groups. "There is a great deal of competition between bus operators, large and small, although the biggest competitor for the bus industry is the car," a spokesman for the body said.
Douglas McNeill, transport analyst at stockbrokers Astaire, said the local bus market had been "static for some time". "It has not been common for bus operators to move into new areas, and some are dominated by very few, or one, company. But it's hard to know what the Competition Commission can do," he told Reuters.
Britain's largest local bus firm is Aberdeen-based FirstGroup, with between one in four and one in five services. A spokesman declined to comment on the contents of the OFT statement, but said the firm would read it in detail and prepare a response. "Our investigation has unearthed a range of evidence that suggests the market for local bus services is often not working as well as it should and may be resulting in higher prices for bus users," OFT Chief Executive John Fingleton said in a statement.