Privately provided public transport: an operator's perspective from North America and the UK Nicola ola Sh Shaw Dir irecto ctor, , FirstGro stGroup p PL PLC Feb 2010 0
Overview An introduction to FirstGroup The UK Bus Industry A quick history What do customers want? How do we attract more customers? What do employees want? What do politicians want? Where now? The Public Policy Debate FGA Transit An Advert 1
FirstGroup Business Overview We are the largest UK-listed surface transport group: Transport some 2.5 billion passengers a year Annualised revenues of over £6bn More than 130,000 employees UK Bus UK Rail North America UK No. 1 US No. 1 UK No. 1 23% market share 60,000 yellow school buses Operating one quarter of the UK 8,500 buses Greyhound intercity coach services passenger rail network Bus, coach, yellow school bus Transit management & contracting 5 passenger rail operations and rail replacement Vehicle maintenance & support services (4 franchises, 1 open access) 3 million passengers a day 4 million students to and from school & rail freight operation Some 25,000 employees every day More than 280 million passengers a Some 94,000 employees year Some 13,000 employees 2
Public policy and ownership changes 1967 – last major private bus operator sold to the Government 1986 – deregulation 1988 – 89 National Bus Co. sold by Government (as 70 lots) 1990 – 91 Scottish Bus Group sold 1993 – 95 London bus operating companies sold Now Outside London c. 80% network private sector planned and delivered London network 100% privately operated under contract to Government 3
FirstGroup’s GB Bus operations 1986 1990 1995 2000 2010 4
Bus Industry Margins 5
Customer Satisfaction Passenger Focus initial surveys of satisfaction in 2009 100% 90% 90% Proportion of passengers satisfied with their trip 80% 70% 60% 50% 40% 30% 20% 10% 0% Lincolnshire Tyne & Wear Dorset Southampton West Midlands Bristol Overall 6
Long Term Trends in the Bus Market 7
What do customers want? Source: Passengers Focus surveys 2009 8
Do something else with your time 9
Good information 10
Bad information 11
Good interchange 12
Not so good interchange 13
The environment 14
Hybrid Buses £k 15 years Diesel Hybrid Diff Purchase 175 275 -100 Fuel cost 269 230 39 Duty saving -54 54 Maintenance 201 242 -41 cost 645 693 -48 Total 15
Jobs in the UK Bus and Coach Industry 16
Government funding in the bus industry 700 600 500 English PTEs 400 £m London 300 Shires 200 100 0 1994 1996 1998 2000 2002 2004 17
Public Policy Debate Ownership Partnership General acceptance that the Voluntary agreements private sector will deliver more Statutory schemes efficiently What does it really mean? Control Quality Contract Frequency of service changes Area based Price and ticketing integration In the public interest Vehicle quality No compensation for incumbents Information provision Transition issues Driver training and behaviour Competition New review of the market by the Competition Commission 18
First Transit Market Fixed Route $15 billion In-house/conversion ~ $13.5B, 90% Contracted/share shift ~ $1.5B, 10% First Transit Fixed Route $330 million Total market share ~ 2% Total contracted share ~ 22% 19
Redefining coach travel in the US and the UK 20
Keeping passengers happy the older way too! 21
Career / management lessons Modelling and the reality of life Inertia of what you already have Elasticity based modelling dominates Team work Running a business you MUST understand / be familiar with all aspects Never underestimate the power of the distraction Public private partnership Social contract The economic cycle The long bath 22
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