[PDF] Deregulation Of The Intercity Bus Industry eBook

Author : Karen L. Borlaug
Publisher :
Page : 132 pages
File Size : 35,43 MB
Release : 1981
Category : Bus lines
ISBN :

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The impact of deregulation on the intercity bus industry and those who use the services of this industry is an issue of increasing interest given Florida's July 1, 1980, deregulation of motor carrier transportation of passengers and freight. This preliminary study of the Florida bus industry examines the operation of the intercity bus industry in a deregulated environment and notes the changes in service that have occurred and how these changes have affected the users of intercity bus service. The study also shows the relation of Florida bus operations, both prior to and following deregulation, to interstate service. As deregulation in Florida had only been in effect for seven months at the time of this study, it is too soon to determine the medium to long-term impacts of deregulation. The study found, however, that in the short run, regular-route carriers do not appear to have done much major restructuring of their northern Florida routes or started many new ones. The loss of regular-route passenger service observed in some of the towns has proved inconvenient, but service is generally available within a reasonable distance. Competition in the charter and tour sector has, on the other hand, increased considerably, bringing with it an increased concern for safety by existing operators. Attractions and groups using charter and tour services appear to have adequate service available.

Author : Daniel Gordon Greenberg
Publisher :
Page : 134 pages
File Size : 32,18 MB
Release : 1987
Category : Aeronautics, Commercial
ISBN :

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This brief excerpt, although not particularly fascinating in its revelation, is exemplary of a far more complex aspect of modern American economic policy. During the 1930's, American regulatory fervor was at its peak. Fear of a repeated economic upheaval, like that of 1929, compounded with the exorbitant profits earned by the robber barons spawned government intervention. Consequently, regulation was imposed upon numerous industries, including air and bus transport. Four decades later restrictions have been lifted not only in the airline industry but in the intercity bus industry as well. These changes are part of the new laissez faire government of the late 1970's and, thus far, the 1980's. By allowing the owners of industry and business to essentially go 'head to head', the government has introduced very powerful market forces which threaten to shake the stability of some of this nation's more steadfast corporations. Those companies that first came to mind within the transportation sector are Greyhound and Trailways, clearly the market leaders for the bus industry. This paper is founded on the contention that the government, in deregulating the airline industry, failed to take into account the 'spillover' effects for other industries. The industry of particular interest within this context is the intercity bus industry. The intercity bus industry has received very little notoriety with respect to airline deregulation. In fact, it has received very little attention altogether from both media and academia. There are, for instance, no definitive texts on the industry, nor has there been a proliferation of studies conducted with regard to industrial analysis. This is only partially explained by the bus companies themselves, which inhibit the degree of industrial analysis through protective proprietary policies. It is, therefore, the purpose of this paper to analyze the effect that airline deregulation has had on the intercity bus industry. The paper begins with a brief historical sketch for the intercity bus industry, including a description of the conditions under regulation. This is followed by a discussion of the Bus Regulatory Reform Act and its effects upon the industry. In section III, I analyze the structure of the bus industry, placing particular emphasis on market concentration, demand, and profitability. This is followed by an analysis of the. factors responsible for the industry's financial decline. In section IV, I introduce evidence that suggests that the air and bus industries are linked, which is followed by a brief historical sketch of the airline industry. Section VI offers a comparison of the demand demographics between bus and air travel. Finally, I conclude the paper with an empirical analysis of the effect of airline deregulation on the demand for bus service. This end is achieved in two parts. First, I demonstrate that airline deregulation has led to a drop in the level of fares. Secondly, I estimate the supply and demand equations for the bus industry and demonstrate that the quantity demanded of bus travel is, in part, dependent upon the price of air travel.