The long-haul passenger transport services assure connectivity inside and between Europen countries. For long in Europe the policy makers tended to foster railways services on road services, through subsidies and, especially, restrictions on coach services activation. In recent years, several countries started processes for coach markets liberalisation with the aim at enhancing the service quality through competition.
The liberalisation had consequences on long-haul transport markets for the price decisions, the market concentration, the level of offered services. Nevertheless, railways operators registered revenue declines and in some areas situation of quasi-monopoly were developed in the coach market, held by companies with strategic advantages (e.g. historically active on the area or characterized by a disruptive business model - Flixbus).
The intermodal competition between intercity bus and railway services has so far hardly been explored by the scientific research. The aim of this project is to clarify the intermodal competition introduced by the liberalisation between operators that offer services on the same paths but with different characteristics (frequency, volume capacity, comfort, cost structure, etc.). Attention is dedicated on the consequences of competition on the economic sustainability and service quality (i.e. frequency) offered by the rail operators, characterized by high indivisibility and high investments, if challenged by competitors with high flexibility and low production costs (e.g. Flixbus).To the extent of the proponent knowledge, this will be the first attempt in the scientific community to tackle the consequences of the bus-rail competition on the long-haul passenger market, integrating the production point of view and evaluating the impacts on the sector overall capacity production and, therefore, the fulfilment of mobility rights of all the demand.
The main innovation elements of the research project lie on the treated topics and on the potential obtainable results.
The methodology used refer to well established bodies of literature; nevertheless, adaptations to the specificity of the considered case will be necessary (e.g. representation on traditional model of innovative elements).
Considering the treated topic, instead, the intermodal competition between intercity bus services and railway services has so far hardly been explored by the scientific research (Gremm, 2018). As already highlights, previous studies are relatively restrained and mainly concentrated on price decisions analysis (Gremm, 2018; Beria et al. 2019), market concentration and network density of the deregulated coaches' market and evaluation of the users¿ willingness to pay for services characteristics (Hasiak, S. et al., 2016; Burgdofr and Eisenkopf, 2018a).
Among the existing publications, a limited number explicitly considers elements related to the service production or theoretically model the competition market (Bataille and Steinmetz, 2013; Burgdorf and Eisenkopf, 2018b). To the extent of the proponent knowledge, this will be the first attempt in the scientific community to tackle the consequences of the bus-rail competition on the long-haul passenger market, integrating the production point of view and evaluating the impacts on the sector overall capacity production (and therefore, the fulfilment of mobility rights of all the demand).
The results of the analysis would represent important elements for the definition of the public regulations by the policy makers (towards optimization of social welfare), and for the definition of strategic plans by the transport operators companies.
The expected results should confirm or deny the risk that the introduction of competition based on a disruptive business model could compromise the realisation of the mobility right. Namely, if on selected paths could happen that the service suspension of the railway lines caused by unprofitability following the competition, would go with the inability of the new operator (i.e. in this case Flixbus) in offer enough capacity for the entire demand volume.
In order to preserve the mobility rights, possible changes in the policy would be:
- Increasing or introduction of subsidies in order to support the existence of railways lines of public interest, but scarcely profitable;
- Penalisation through taxation of the coach operators' production, in order to limit its development within the limits of its production capacity;
- Imposition of constraints in the maximum capacity and/or in the offered service (i.e. limitation on frequency and/or area of service and/or time of the day of service) for the coach operators.
Part of the research project will be dedicated to the performance assessment of the mentioned policy instruments.
REFERENCES
Beria, P., and Bertolin, A. (2019). Evolving long-distance passenger services. Market concentration, fares and specialisation patterns in Italy. Research in Transportation Economics.
Beria, P., Nistri, D., and Laurino, A. (2018). Intercity coach liberalisation in Italy: Fares determinants in an evolving market. Research in Transportation Economics, 69, pp. 260-269.
Blayac, T., and Bougette, P. (2017). Should I go by bus? The liberalization of the long-distance bus industry in France. Transport Policy, vol. 56, pp. 50-62.
Burgdorf, C., Eisenkopf, A., and Knorr, A. (2018a). User acceptance of long distance bus services in Germany. Research in Transportation Economics, vol. 69, pp. 270-283.
Burgdorf, C., and Eisenkopf, A. (2018b). Effects of road tolls for intercity buses on travel activities and the choice of means of transport in German long-distance passenger transport. Research in Transportation Economics, vol. 72, pp. 92-105.
De Haas, S., and Schäfer, J. T. (2017). Consolidations in the German interurban bus industry: Effects on prices and quantities (No. 31-2017). Joint Discussion Paper Series in Economics.
Fageda, X., and Sansano, S. (2018). Factors influencing prices and frequencies in the interurban bus market: Evidence from Europe. Transportation Research Part A: Policy and Practice, vol. 111, pp. 266-276.
Gremm, C. (2018). The effect of intermodal competition on the pricing behaviour of a railway company: Evidence from the German case. Research in Transportation Economics, vol. 72, pp. 49-64.
Hasiak, S., Hasiak, F., & Egea, A. (2016). Coach and train: differences in individuals perception of these modes. Transportation Research Procedia, vol. 14, pp. 1706-1715.