Stagecoach in US court over New York tour bus 'monopoly'

 

Brian Souter's Stagecoach is being taken to court in the US over claims that it created a monopoly of "hop-on, hop-off" double-decker bus tours in New York.

The Department of Justice and New York attorney general told a New York court that Stagecoach and its former arch-rival, City Sights, had combined forces and captured 90 per cent of the city's $100m (£62m)-a-year bus-sightseeing market.

The enforcers also say that when the two formed their joint venture in 2009 they pushed the price of tickets up by 10 per cent, from $49 to $54, without any fear of losing custom.

To the 50 million tourists who visit New York each year, and the two million of whom take hop-on hop-off tours, it appears that there are two big rival companies – the red buses badged New York Sightseeing and the blue ones labelled City Sights. But in fact they are both run by Twin America, which is a joint venture created by Stagecoach's Gray Line and City Sights in 2009.

"Forming a monopoly that overcharges consumers is illegal and will not be tolerated," the attorney general, Eric Schneiderman, said in a statement. "The iconic double-decker Gray Line and City Sights buses are seen all over New York City, but few people know they are a monopoly which has led to higher prices and less competition."

The lawsuit asks the court to order the joint venture to be dissolved or forced to sell parts of the business.

"The formation of Twin America eliminated intense, head-to-head competition between Coach and City Sights and gave the parties an effective monopoly that enabled them to raise prices to consumers," said the acting assistant attorney general, Renata B Hesse, who is in charge of the Department of Justice's Antitrust Division.

"This lawsuit seeks to restore the competition eliminated by the joint venture and to ensure that the millions of visitors to New York City who take hop-on, hop-off bus tours each year enjoy the benefits of a competitive marketplace."

Stagecoach said it was "disappointed" by the legal proceedings because it believed that New York bus tours had become competitive, with new operators joining and planning to come into the market.

It claimed the price rises had been because of higher fuel and wage costs, and said that it would "robustly defend" its position.

Stagecoach shares fell 2.65p to 299.75p.

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