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Sunday, 28 August 2011
Is the Big Lemon facing unfair competition?
The Big Lemon says:-
"Some would say it’s poor taste to pass judgment on competitors’ services and pricing plans but we cannot sit idly by and watch our competitors flood our route with cheap buses whilst putting prices up everywhere else to pay for it all. Yesterday afternoon our competitors announced bus fare increases on all services… except the ones that compete with ours. And this is after prices on competing service were reduced substantially in January to match our cheap fares.
From 18th September a CitySaver bought on the bus on most city routes will be £4. However on the 23 and 25 services that compete with ours along the Lewes Road it’s just £2.50. Brighton & Hove Bus Company’s website blames the rise on the price of diesel and the expiry of their fixed-price fuel deal. But is diesel cheaper on the Lewes Road than everywhere else? Of course not." . . . . . Read on.
This was a real problem when bus deregulation first happened. Big companies would cross subsidise routes they were competing for against smaller local competitors.with lower price on the routes, or more buses, the small player found themselves without enough income.
ReplyDeleteThe practice was clearly anti-competitive, but the wheels of competition law ground so slowly that by the timw the case was heard the smaller competitor would have been driven into bankruptcy or the arms of the big players.
It took a while for the authorities to wake up, it looks like they need a rocket up their derrieres.