£2 Bus Fare Cap - A Commercial Opportunity…?

Given that the Government has given five months notice of the reduction in the bus fare cap from £3 down to £2 is this a commercial opportunity for bus operators to take advantage of PROVIDED that the subsidy offered to bus operators is sufficient to make up the difference between £2 and what a normalish fare would be?

The £2 cap was introduced in January 2023 and will be brought back for at least 12 months in 2027, so I guess £2 in 2027 is probably the equivalent of about £1.70 in real terms so a bargain for bus users.

Are there any existing routes that would benefit from a frequency uplift and carry sufficient extra passengers to increase profits?

Are there any potential new routes?

Are there any routes that could be improved to take passengers from more expensive or unreliable rail routes?

It looks as though Wales will be also be included in the scheme for the first time?

I have a few suggestions:

X17 Matlock - Chesterfield - Sheffield currently every 30 minutes
TransPeak Buxton - Bakewell - Matlock - Derby currently hourly
6.1 Bakewell - Matlock - Derby currently hourly
Comet Derby - Chesterfield currently hourly
199 Buxton - Stockport - Manchester Airport currently every 30 minutes
84 Chester - Crewe currently hourly entire route
Transdev services from Burnley/Accrington - Manchester
555 Keswick - Lancaster currently hourly with extras
Coastliner Leeds - York - Scarborough/Whitby currently hourly with extras
X57 Manchester - Glossop - Sheffield former Hulley’s route
5 Llandudno - Caernarfon currently 3 per hour
11/11A Chester - Rhyl currently 2 per hour

Llandudno said:

Coastliner Leeds - York - Scarborough/Whitby currently hourly with extras

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I would like to see Leeds-York go up to every 30 minutes on Sundays, its currently hourly. To compare, York-Hull is every 30 minutes 7 days a week on the X46/X47, although the train service between York & Hull is much less frequent than the train service between York & Leeds.

Worth noting that the full Leeds-Scarborough is hourly, but there are 3bph between Leeds & York (Monday to Saturday) and 2bph on Leeds-York-Malton (Monday-Saturday). Only 4 buses a day (Monday-Saturday) extend to/from Whitby.

Llandudno said:

Transdev services from Burnley/Accrington - Manchester

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Definitely, especially the X41 (Accrington-Manchester) which is hourly at the moment. The X43 (Burnley-Manchester) is every 20 minutes.

Llandudno said:

TransPeak Buxton - Bakewell - Matlock - Derby currently hourly

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Especially during the summer months, it would be great to have it more frequent.

Llandudno said:

Given that the Government has given five months notice of the reduction in the bus fare cap from £3 down to £2 is this a commercial opportunity for bus operators to take advantage of PROVIDED that the subsidy offered to bus operators is sufficient to make up the difference between £2 and what a normalish fare would be?

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The problem is that it won't be for buses in more rural areas because that would require common sense to be applied.

Unfortunately the DfT do not recognise that the economics of a rural bus service are very different from the economics of a bus service in urban areas. They think rural operators are charging higher fares than urban operators because of greed or they are overcharging. When in reality the economics of said services are different and often outside core education/employment hours, these operators are carry large amounts of concessionary pass passengers and effectively the higher fares are the students/commuters effectively subsidising the rest of the service that is mostly used by free travel pass holders.

Everything I have seen from the DfT suggests they treat them one and the same. Indeed, an operator I know in Norfolk kept getting back stuff about incentivising travelling to the 'city centre' to change to other services in their dialogue with them, despite the fact they were NOWHERE near any city!

Llandudno said:

Given that the Government has given five months notice of the reduction in the bus fare cap from £3 down to £2 is this a commercial opportunity for bus operators to take advantage of PROVIDED that the subsidy offered to bus operators is sufficient to make up the difference between £2 and what a normalish fare would be?

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I think that this falls at the first hurdle 'PROVIDED that the subsidy offered to bus operators is sufficient'. I believe the reimbursement is linked to historical use data and an average applied. It also doesn't pay so much for generated travel - the bus company is expected to be glad to get the extra £2, so running additional mileage is not worth it.

Could any services do with an uplift? Possibly. Although I'd argue if there was demand, the operators would likely have looked into it already.

But practically, I can see what you're suggesting being a real challenge. Take the 555 for example. Right now bustimes tells me there's 11 vehicles out there running the service, which is half hourly in the summer. I know it's not as simple as this, but let's say that 6 buses for an hourly service, 18 buses for a 20 minute service. And then there's the drivers.

Similarly, the 199. Eight buses out there now for a half hourly service, so four for an hourly, 12 for a 20 minute service. Plus drivers.

Realistically I don't think an operator's going to make these kind of decisions on the basis of a one year £2 fare.

RT4038 said:

I think that this falls at the first hurdle 'PROVIDED that the subsidy offered to bus operators is sufficient'. I believe the reimbursement is linked to historical use data and an average applied. It also doesn't pay so much for generated travel - the bus company is expected to be glad to get the extra £2, so running additional mileage is not worth it.

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Also the terms of how and when the smaller operators get paid doesn't help.

YorkRailFan said:

Definitely, especially the X41 (Accrington-Manchester) which is hourly at the moment.

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You are aware of the history of the X41? It was very nearly lost in 2019/20 because of low passenger numbers. I would suspect that it is marginal at best. I wouldn't be drawing parallels between it and the X43 - very different routes.

Llandudno said:

Are there any existing routes that would benefit from a frequency uplift and carry sufficient extra passengers to increase profits?

Are there any potential new routes?

Are there any routes that could be improved to take passengers from more expensive or unreliable rail routes?

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@RT4038 and @mangad are correct to say that if there were, the operators would probably have done it. Any uptick on those routes will simply be absorbed by existing capacity.

TheGrandWazoo said:

You are aware of the history of the X41? It was very nearly lost in 2019/20 because of low passenger numbers. I would suspect that it is marginal at best. I wouldn't be drawing parallels between it and the X43 - very different routes.

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Yet in 2024 there were complaints of overcrowding. It's a route that has lost its prestige, the "Red Express" branding has practically vanished (only one bus left in it) and is usually operated by 58 plate buses. Some investment from Transdev (possibly newer buses cascaded from elsewhere in the group) at the very least would be greatly appreciated.

YorkRailFan said:

Yet in 2024 there were complaints of overcrowding. It's a route that has lost its prestige, the "Red Express" branding has practically vanished (only one bus left in it) and is usually operated by 58 plate buses. Some investment from Transdev (possibly newer buses cascaded from elsewhere in the group) at the very least would be greatly appreciated.

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It’s quite a fantasy to suggest the £2 fare would grow sufficiently to transform a subsidised hourly service to a commercial half hourly one.

YorkRailFan said:

Yet in 2024 there were complaints of overcrowding. It's a route that has lost its prestige, the "Red Express" branding has practically vanished (only one bus left in it) and is usually operated by 58 plate buses. Some investment from Transdev (possibly newer buses cascaded from elsewhere in the group) at the very least would be greatly appreciated.

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It’s the peak journeys into Manchester am and out pm and that can be sorted by using a decker. Those peak runs were always busy - it’s the daytime when you’re carting around 5 pensioners where they lose money and doubling resources and costs simply won’t stack up.

Llandudno said:

Given that the Government has given five months notice of the reduction in the bus fare cap from £3 down to £2 is this a commercial opportunity for bus operators to take advantage of PROVIDED that the subsidy offered to bus operators is sufficient to make up the difference between £2 and what a normalish fare would be?

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As others have said, reimbursement is based on historic demand so there is no extra payment for extra passengers nor any system to reimburse extra resource deployed (at least on paper the ENCTS free pass scheme does have a system to increase payment if operators can show they have had to increase resource to deal with demand, not sure how often it actually got accessed)

Llandudno said:

The £2 cap was introduced in January 2023 and will be brought back for at least 12 months in 2027, so I guess £2 in 2027 is probably the equivalent of about £1.70 in real terms so a bargain for bus users.

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The one difference with 2023, where your question actually does prompt a question of opportunities, is that this time operators seem to have real notice of the introduction of the scheme so have the chance to actually plan a marketing strategy in theory. The original introduction was done with about 2 weeks notice to operators of their approval for participation over the Christmas holidays (and only slightly more from the point where the government announced the idea) and was only expected to cover a few months so no one had any chance to do any promotion. Subsequent extensions were also done with very little notice for only relatively short periods of time so operators were never in a position of having a clear long term idea of the scheme to be comfortable spending money on promotional activities (the £3 scheme has been run with longer timelines but it is harder to promote in a high profile manner a price rise even if it is still heavily discounted from the commercial price). This is all assuming the process is done more systematically and operators get proper notice of everything so confirmation of participation is done with plenty of time to roll things out - never a given and for example I don't believe all, possibly most or any, have yet received actual confirmation of their approved participation in the August free child travel scheme yet (the operators will have confirmed the acceptance of the offered reimbursement to join the scheme but haven't yet had confirmation from the DfT of their participation).

Llandudno said:

199 Buxton - Stockport - Manchester Airport currently every 30 minutes

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Most of the busiest section of the 199 already runs within the Manchester £2 fare cap so potential growth is lower than it would appear.

YorkRailFan said:

Yet in 2024 there were complaints of overcrowding. It's a route that has lost its prestige, the "Red Express" branding has practically vanished (only one bus left in it) and is usually operated by 58 plate buses. Some investment from Transdev (possibly newer buses cascaded from elsewhere in the group) at the very least would be greatly appreciated.

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It is quite possible to have overloading problems on specific journeys and insufficient passengers to be commercially viable. One or two well loaded journeys and a lot of very lightly loaded journeys may not bring in sufficient income to cover the costs of running buses all day. It also depends who those passengers are and what fares are being taken and how far they travel. Even 20 years ago when the free travel scheme was introduced a cross country service running full of free pass passengers could be losing money as the income was insufficient to cover the cost of running the bus in some parts of the country as the reimbursement rate was too low. 50 passengers at £2 per passenger in total for an hours journey when most are on together would produce an overcrowding problem but not cover the necessary hourly rate to run a bus (in fact it is probably less than half of the needed income) - most operators rely on multiple passengers occupying seats through the trip (i.e: multiple short distance trips not a few long distance travellers) to find viability.

It is unlikely a £2 fare scheme could bring in enough revenue to support the introduction of extra resources alone and if there isn't a mechanism to support or compensate for extra costs incurred it is unlikely any operator will consider service enhancements due to the scheme.

Need a few train £2 pound add-ons. How about any train between Oxford and Banbury provided it stops at the intermediate stations.

Llandudno said:

It looks as though Wales will be also be included in the scheme for the first time?

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Where does it say Wales will be part of the scheme. All the reporting has stated it is a £2 capped fares in England, outside London?

Leedsbusman said:

It’s quite a fantasy to suggest the £2 fare would grow sufficiently to transform a subsidised hourly service to a commercial half hourly one.

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If not a half-hourly service, deckers on the service like the Gemini 3s from Coastliner once they're released would be a much needed upgrade for the service.

TheGrandWazoo said:

It’s the peak journeys into Manchester am and out pm and that can be sorted by using a decker. Those peak runs were always busy - it’s the daytime when you’re carting around 5 pensioners where they lose money and doubling resources and costs simply won’t stack up.

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Gemini 3s from Coastliner once they're released would provide a much needed improvement to the service over the tired, nearing end of life buses currently used.

Dwarfer1979 said:

It is unlikely a £2 fare scheme could bring in enough revenue to support the introduction of extra resources alone and if there isn't a mechanism to support or compensate for extra costs incurred it is unlikely any operator will consider service enhancements due to the scheme.

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I suppose waiting for BSIP funding is the most likely way the route will get any sort of improvements.

Llandudno said:

X17 Matlock - Chesterfield - Sheffield currently every 30 minutes

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Could easily have been upped to 20 minutes on the 'core' Chesterfield to Sheffield section before now, but there doesn't seem to be the will.

Llandudno said:

X57 Manchester - Glossop - Sheffield former Hulley’s route

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The roadworks associated with the Mottram Bypass likely make this impossible. Once they are finished it could be time to try again. That said, even now you'd need to get permission to run in to Manchester, by the time the bypass is complete you'd also need to apply for permit for South Yorkshire.

YorkRailFan said:

If not a half-hourly service, deckers on the service like the Gemini 3s from Coastliner once they're released would be a much needed upgrade for the service.

Gemini 3s from Coastliner once they're released would provide a much needed improvement to the service over the tired, nearing end of life buses currently used.

I suppose waiting for BSIP funding is the most likely way the route will get any sort of improvements.

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It already has BSIP funding. Certainly doesn’t need double deckers.

Leedsbusman said:

It already has BSIP funding. Certainly doesn’t need double deckers.

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It evidently does on some journeys, there was one on it today in fact.

YorkRailFan said:

It evidently does on some journeys, there was one on it today in fact.

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There’s one board that does the 0655 to Manchester. It doesn’t need deckers on the others nor a 30 min frequency.

YorkRailFan said:

It evidently does on some journeys, there was one on it today in fact.

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Yes the 830 arrival into Manchester has used a double decker for several years. But that doesn’t mean the entire service does. It’s been largely single deck operated since 2020 and seems to work ok on that basis.

Surely the reality is that any extra passengers/revenue will just make current services more viable rather than providing enough income to justify service expansion. Also, no sensible business would invest significant amounts of cash in vehicles and staff because of a £2 fare cap that may only last 12 months.

Llandudno said:

Given that the Government has given five months notice of the reduction in the bus fare cap from £3 down to £2 is this a commercial opportunity for bus operators to take advantage of PROVIDED that the subsidy offered to bus operators is sufficient to make up the difference between £2 and what a normalish fare would be?

The £2 cap was introduced in January 2023 and will be brought back for at least 12 months in 2027, so I guess £2 in 2027 is probably the equivalent of about £1.70 in real terms so a bargain for bus users.

Are there any existing routes that would benefit from a frequency uplift and carry sufficient extra passengers to increase profits?

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The funding provided for these routes is not a top-up per passenger, but a grant intended to cover the shortfall between actual fares income and the expected fares income if the cap was not in place (after deducting growth generated by the cap). I don't know how it is being calculated in detail, but in the early days most if not all of any increased revenue from additional ridership would be offset and so the grant funding commensurately reduced. Even if the grants have now stabilised and so additional riders will each add £2 to the bus company's coffers, that is not going to be enough to justify an increase in frequency, certainly not on a long interurban route, it might just about cover the costs on a short urban route where the commercial fares wouldn't be much higher anyway, but absolutely no chance on any of the routes you've suggested.

SW Buses said:

Where does it say Wales will be part of the scheme. All the reporting has stated it is a £2 capped fares in England, outside London?

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My take is that Wales will be given additional funding but it is up to their parliament whether they use for a £2 bus cap.

Chances are they will.

TheGrandWazoo said:

There’s one board that does the 0655 to Manchester. It doesn’t need deckers on the others nor a 30 min frequency.

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The one on it yesterday worked several services. In fact everyday this week there has been one double decker operating throughout the day (not just the 0655 to Manchester).

The B7RLEs need replacing as soon as possible, the only buses that will soon be able to be cascaded from within Transdev are the Gemini 3s from Coastliner. So Transdev has two options, either they send the Gemini 3s to Blackburn for the X41 and 152 or they order brand new single deck buses for the X41.

The Gemini 3s would provide a needed capacity boost and if the route reverts to its "Red Express" branding, it might help with marketing (something Transdev is quite good at). I know bus services that are far quieter than the X41 yet use double deckers on a very regular basis.

Leedsbusman said:

Yes the 830 arrival into Manchester has used a double decker for several years. But that doesn’t mean the entire service does. It’s been largely single deck operated since 2020 and seems to work ok on that basis.

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Everyday this week, 1 duty on the X41 has seen a double decked operating throughout the day not just the 830 arrival into Manchester. Would using cascaded double deckers really harm the route? There are far quieter rural routes which regularly use double deckers, the X41 doesn't strike me as one of those routes...

YorkRailFan said:

The one on it yesterday worked several services. In fact everyday this week there has been one double decker operating throughout the day (not just the 0655 to Manchester).

The B7RLEs need replacing as soon as possible, the only buses that will soon be able to be cascaded from within Transdev are the Gemini 3s from Coastliner. So Transdev has two options, either they send the Gemini 3s to Blackburn for the X41 and 152 or they order brand new single deck buses for the X41.

The Gemini 3s would provide a needed capacity boost and if the route reverts to its "Red Express" branding, it might help with marketing (something Transdev is quite good at). I know bus services that are far quieter than the X41 yet use double deckers on a very regular basis.

Everyday this week, 1 duty on the X41 has seen a double decked operating throughout the day not just the 830 arrival into Manchester. Would using cascaded double deckers really harm the route? There are far quieter rural routes which regularly use double deckers, the X41 doesn't strike me as one of those routes...

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The board that does the 830 arrival into Manchester is the booked double decker. It’s school holidays now so not required which is probably why one worked another board yesterday instead.
Like it or not the X41 is a quiet service propped up with deminimis bsip money. Using end of life single deckers is more economic than using higher cost mid life deckers.

Leedsbusman said:

The board that does the 830 arrival into Manchester is the booked double decker. It’s school holidays now so not required which is probably why one worked another board yesterday instead.
Like it or not the X41 is a quiet service propped up with deminimis bsip money. Using end of life single deckers is more economic than using higher cost mid life deckers.

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Use of end of life single deckers is not sustainable, they don't have long left. They will need replacing very soon, like it or not. Buses that are freed up elsewhere might as well be used, its cheaper than buying a fleet of new single deckers. Blackburn is the most obvious depot in the group to send the Gemini 3s to. May as well use them.

YorkRailFan said:

Use of end of life single deckers is not sustainable, they don't have long left. They will need replacing very soon, like it or not. Buses that are freed up elsewhere might as well be used, its cheaper than buying a fleet of new single deckers. Blackburn is the most obvious depot in the group to send the Gemini 3s to. May as well use them.

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I’m not sure that’s ‘may as well use them’ is how business cases work. They have no need to transfer them elsewhere when replace - they could well dispose of them given the mileage they will have.

I’m sure the current buses can carry on for a while yet but when they do need replacing simply using slightly younger single deckers would be more logical the adding the cost of mid life double deckers to a route that doesn’t carry the loads to justify them.

YorkRailFan said:

Use of end of life single deckers is not sustainable, they don't have long left. They will need replacing very soon, like it or not. Buses that are freed up elsewhere might as well be used, its cheaper than buying a fleet of new single deckers. Blackburn is the most obvious depot in the group to send the Gemini 3s to. May as well use them.

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The hard reality of the X41 is that, except for a couple of peak hour journeys into and out of Manchester, it is very marginal. Look at it in the daytime and it's very quiet. That they are using older fleet is that they have little depreciation and so it helps the finances. It's likely that they won't be able to sustain the cost of B5TLs and that it would need to be newer Eclipses (2012 examples?) cascaded across.

TheGrandWazoo said:

The hard reality of the X41 is that, except for a couple of peak hour journeys into and out of Manchester, it is very marginal. Look at it in the daytime and it's very quiet. That they are using older fleet is that they have little depreciation and so it helps the finances. It's likely that they won't be able to sustain the cost of B5TLs and that it would need to be newer Eclipses (2012 examples?) cascaded across.

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The only newer Eclipses in the Transdev Group are 3 with Team Pennine and 2 with York. They're not going to be released anytime soon. Would B9TLs from Hotline released by B5TLs from Coastliner be sustainable?

Leedsbusman said:

I’m not sure that’s ‘may as well use them’ is how business cases work. They have no need to transfer them elsewhere when replace - they could well dispose of them given the mileage they will have.

I’m sure the current buses can carry on for a while yet but when they do need replacing simply using slightly younger single deckers would be more logical the adding the cost of mid life double deckers to a route that doesn’t carry the loads to justify them.

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There are no younger single deckers set to be released within Transdev though. Any Versas released from Flyer and the 464 have gone off lease. The Eclipses from TheShuttle and Harrogate were older and have been disposed of. The only buses set to be released are the B5TLs from Coastliner, unless they're used on Hotline to replace the B9TLs. Any newer single deckers would have to be acquired second hand from somewhere else.

Even if the fare was 1p and the government was subsiding the rest, you'd still need to get people on the buses to make it viable. That requires running a bus that people want to use, and ensuring they are aware it operates.

Stagecoach's route from Milton Keynes station to Luton Airport sounds like an excellent idea. However, if you're searching flights on an airline's website it's not going to tell you Stagecoach operate a bus from Milton Keynes station connecting with WCML trains. The marketing is the difficult bit.

YorkRailFan said:

The only newer Eclipses in the Transdev Group are 3 with Team Pennine and 2 with York. They're not going to be released anytime soon. Would B9TLs from Hotline released by B5TLs from Coastliner be sustainable?

There are no younger single deckers set to be released within Transdev though. Any Versas released from Flyer and the 464 have gone off lease. The Eclipses from TheShuttle and Harrogate were older and have been disposed of. The only buses set to be released are the B5TLs from Coastliner, unless they're used on Hotline to replace the B9TLs. Any newer single deckers would have to be acquired second hand from somewhere else.

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As far as I know there are no double deckers on order to replace the B5s so that is entirely speculative. There are 60 reg and 12 reg B7RLEs in the fleet, 16/17 reg Versa.