The Office of Fair Trading said yesterday it had started an investigation into local bus services throughout the UK after receiving complaints about excessive pricing and shoddy service.
The investigation will focus on bus services across the country on local routes such as those within towns and suburban routes, a spokesman for the OFT said.
The competition regulator said that, after consolidation through takeovers, five bus companies now operate two-thirds of such routes. "The OFT receives regular complaints about bus prices, service levels and a perceived lack of competition between companies bidding for tenders," John Fingleton, the regulator's chief executive, said.
"At the same time many claim that even where there is competition it has failed to deliver improvements in local bus services. The study will test these issues against the available evidence," Mr Fingleton added.
The five biggest local bus operators are Arriva, First Group, Go Ahead Group, National Express and Stagecoach. The competition regulator will contact the bus companies directly as well as other parties central to its investigation, but has also invited any others to voice their views by 8 May.
"The OFT will work with local authorities, bus operators and central and devolved government to collect information on the different models of competition in operation in local areas," the agency said. "The final duration and scope of the study will depend on the results of this initial phase."
The news comes as one of the companies, Arriva, posted a 30 per cent rise in pre-tax profit for 2008 yesterday. The company, which operates in 13 countries across Europe, said that 2009 would be a tough year, although it added that its business mix and strong cash flow would help it to get through the downturn.Reuse content