After carrying out a market study into the market for local bus services, the Office of Fair Trading (OFT) identified several areas of concern which suggest that limited competition is tending to result in higher prices and lower quality for bus users and poor value for money for taxpayers. The OFT's study suggests that there is a trend for large national operators (such as Stagecoach, FirstGroup, Arriva, Go-Ahead and National Express) to stay within their own territories and avoid competition. Nor does there appear to be much competition over tenders for supported service contracts, since in one-quarter of such tenders there was only a single bidder. The study also highlighted the potential for predatory conduct towards new market entrants and evidence that fares are higher in areas where there is no strong rival. Following this report, the OFT has called on the Competition Commission to undertake a full market review.
OFT press release
To access the OFT's press release click here.