Battle on the buses where the passenger is the winner
Bus boss Chris Reay is going head to head with Stagecoach in Carlisle. Is this a Cumbrian David battling a corporate Goliath?
Stagecoach must rue the day it gave up the 75 bus route in Carlisle. Unwittingly, it planted a seed that sprouted into a network of services across the city launched by Reays, a relatively small company based in Wigton.
Fares have come down and the number of people using buses has gone up as the two firms slog it out ending what had been a Stagecoach monopoly.
Reays managing director Chris Reay made the brave decision - some might call it rash - to take on a company that has a reputation for fighting dirty.
He says: "The 75 goes from Dalston and Cummersdale to the city centre then out to Scotby, Wetheral, Cumwhinton and Cotehill."
"Stagecoach had been running it as a commercial bus service. Then in February last year they went to Cumbria County Council and said, 'this route is not making any money, we're not going to run it any more',"
That is not unusual. Many rural bus routes are uneconomic. The council pays bus companies to run them then keeps the fares collected. It put the 75 out to tender and Reays won the contract.
It was to be paid £153,000 a year to run an hourly day-time service.
Mr Reay says: "The first week we did it we were carrying 230 passengers a day, which was pretty much what Stagecoach had been doing."
"We put on two brand-new easy-access buses and within a few weeks the average was 550 passengers a day."
"Thats amazing. We went back to the council and told them we didn't need a subsidy, we were happy to run the 75 as a commercial service."
"I wouldn't say Stagecoach ran bad service buy they put any vehicle and any driver on it, and if something broke down there was no rush to replace it."
"We put our money where our mouth is and spent £200,000 on new vehicles."
The success of the 75 started him thinking. If he could make money where Stagecoach couldn't, why not undercut it on the lucrative Citi routes in Carlisle?
Reays' Cityhopper network was launched on October 1.
There are now seven routes and 14 vehicles, all under a year old and bought at a cost of £2m. Cityhopper employs 35 staff, there is a depot off London Road and a travel shop in Devonshire Street.
It hasn't all been plain sailing. The timetable had to be rescheduled earlier this month.
Passengers thought the original routes were too circuitous. Services are more direct now but many are less frequent than they were and evening and Sunday services have been axed.
Mr Reay adds: "We listen to what the public want and try to give them it. We did a lot of listening."
"If you lived in Morton and wanted to get to the Cumberland Informary you had to get a bus into the city centre and change. We started a cross-estate service from Morton to Belle Vue and the hospital."
"Our service 70 runs from Harraby and Botcherby through to Kingstown and Asda, where before you would have had to change buses."
He admits that the Cityhopper is losing money. Passenger numbers need to rise by a third if the buses are to continue long term.
Mr Reay explains: "Rome wasn't built in a day and it is getting better but we need more passengers to make it viable."
"The problem is breaking the mould. People have caught Stagecoach buses for years."
"If they get on the first bus that comes we can't win but if people think we're offering a better service at a better price, then we have a chance."
"We try to be a step ahead. When a pensioner gets on one of our buses, the driver waits for them to sit down before moving off and the drivers always say 'good morning'." (Bit silly saying good morning if its in the afternoon!)
"We have loyal, cracking customers who are very supportive. We just need a few more."
The Government's Competition Commission is keen for the likes of Reays to challenge the monopolies such as Stagecoach because competition benefits the travelling public.
Reays' fares are generally 5p below Stagecoach's.
Following Reays' launch, Stagecoach cut the price of its Dayrider ticket, which gives a day's unlimited travel in Carlisle, from £3.60 to £2.90 and then to £2.60. (NOTE: The dayrider price has never been £3.60, it was £3.30)
Reays has hit back with a range of special tickets.
There's a day ticket for £2.50 and a Weekly Hopper at £6 to undercut Stagecoach's Megarider at £9.50.
There is also a weekly Unihopper for students at £5, a Kidzhopper at the same price and a 50p flat fare for children anywhere in the city.
Mr Reay accepts that his fares have to be lower because Stagecoach's buses run more often.
He said: "We can keep the fares nice and low because family firms like ours don't require to make the margins that Stagecoach needs to keep their shareholders happy."
"Competition is healthy. When a company as large as Stagecoach has a monopoly, they do what they want."
Stagecoach is a huge business with bus and rail interests and an annual turnover of £2.16bn. It also has a reputation for running rivals into the ground.
In 1994 for example, it forced Darlington's former municipal bus undertaking into administration by operating free buses and poaching drivers.
A Competition Commission investigation condemned Stagecoach's conduct as "predatory, deplorable and against the public interest" but the finding came too late to save Darlington Transport.
The Traffic Commissioner summoned Reays and Stagecoach for a behind-closed-doors meeting in November related to their rivalry in Carlisle. What was said has not been disclosed.
But Paul Southgate, managing director of Stagecoach North West, is adamant that his company has done nothing wrong. He says: "We know what the rules are and we abide by them."
Stagecoach is rebranding buses in Carlisle with the slogan 'straight to the heart of our city'.
Mr Southgate says that has nothing to do with the competition from Reays.
He is, however, stung by Reays' claim to be 'your local alternative'.
He says: "Stagecoach and its predecessors have been running buses here for 99 years. We employ more than 500 people in Cumbria, many of them in areas of high unemployment."
"We are more local than he is when it comes down to it."
Mr Southgate points out that Stagecoach offers a more comprehensive service.
For example, it provides eight buses an hour from Harraby to the city centre through the day while Reays operate between four and five.
Reays service stops just after 6pm while Stagecoach's continues beyong 11pm and runs on Sundays too.
And he challenges the image of Stagecoach as a ruthless profiteer by pointing out that it is making a significant financial contribution to the new Carlisle Youth Zone.
It will provide cut-price tickets to youngsters attending the centre in Victoria Place.
So how is Reays' competition affecting Stagecoach? Not much is Mr Southgate's answer.
"Not only are there more people using buses in Carlisle than a year ago, there are more people using our buses than there were a year ago."
It would appear that extra routes and lower fares are persuading more people to use buses, which is what the Government and environmental campaigners have wanted all along.
Meanwhile, Reays is working on plans for longer-distance services linking Carlisle with nearby towns, so Stagecoach may yet face more competition.
(from News & Star)
Red text is my own notes to the article.
