Source: RBC-Ukraine
Buses perform more than half of the passenger transportation of Ukraine. Railways transport 390 million passengers annually, while road transport performs 7.5 times more transportation – more than 3 billion passengers a year and this doesn’t include illegal traffic. Taking into account illegal passengers, who have long become common for all segments of bus transportation, the passenger traffic is more than 5 billion. Even official statistics show that every resident of Ukraine takes advantage of bus services on average about 70 times a year. However, Ukrainian bus transportation resembles Africa in terms of quality and Europe in terms of prices.
Bus transportations are traditionally not covered by the Ukrainian media. Our country pays very little attention to bus transportation matters – in contrast with the railways and aviation, where nearly every event attracts the attention of journalists and the public.
Although the bus transportation market has been dynamic for the last 10 years in Europe, in our country, the situation on this market is far from Europe and rather resembles Africa and developing countries of Southeast Asia. In Europe, buses took the niche of the most affordable and very comfortable transport after the market deregulation that was carried out several years ago and the creation of conditions for its development. Now it is quite possible to travel through several EU countries by a comfortable bus for 5-10 euro, although such trips on the train usually are 10 times more expensive.
The situation is different in our country. We all know that it is a common practice for the Ukrainian society to negatively assess the state railways and every citizen, who has a more or less understanding of the economy, seems to be too quick in blaming it for monopolism and low level of services. Despite the fact that the state railways of Ukraine provide any passenger with an opportunity to travel 1115 kilometers on the train from Kharkiv to Lviv for 10 euro at any time, in Europe, you will be lucky to make several trips around the city or buy a promotional ticket for inter-state travelling by state for this price.
Private sector
Unlike state railways, the bus transportation market is completely private in our country. It currently employs more than 20 thousand private carriers and, accordingly, that sounds inappropriate to speak about the monopoly.
In our country, private carriers have a significant role even in the segment of city bus transportations, in which municipal companies dominate in developed countries, while dictating their terms to local governments and not worrying about the level of services for passengers. Only some cities that realized a mistake done earlier with a rapid privatization of city bus parks started to revive municipal city buses and are in the process of moving to the European model of urban transport.
The regular bus transportation market can be divided into several basic segments: international, inter-city inter-regional, inter-city intraregional, sub-urban and urban transportation.
Illegal segment
There are more than 160 thousand buses used in our country and only a half of them are involved in legal passenger transportation. The level of services is poor with few exceptions. Travelling by our buses is dangerous to passengers’ lives in most cases and this is confirmed by disappointing statistics of car accidents involving buses.
It is fair to admit that there still are some carriers providing services of the European service level that use new modern buses on the market. They mostly work on routes from Kyiv to large regional centers – in particular, they chose the Kyiv-Odessa route. Due to the modern high road built on the shortest route, buses have a significant advantage over the trains on this route running along the legendary E95 highway.
However, such carriers can be counted on the fingers of one hand. The rest of them – mostly prefer small-class buses made on the basis of trucks or busses transformed from cargo vans. Passengers have to accept such transportations for lack of anything better, although the price of inter-city bus routes has reached the European level long ago.
Corruption schemes
The Parliament, the government and the relevant ministry doesn’t want to see disorders occurring on the bus market over decades. Many officials are interested and involved in corruption schemes related to the market activities, and the carriers only generously encourage them to do that. Even legal motor carriers avoid providing actual data on the passenger traffic, incomes and expenses while constantly complaining on the low tariff.
The Ministry and relevant associations have never look at the bus transportation market from the passengers’ point of view and took into account their interests. Officials get used to treat passengers only from the position that their interests are of nobody’s concern and the only thing required from them is to pay for ticket to a carrier.
This is not to say that other government bodies are always focused on the consumer needs, but their interests have never been protected on the market, where three parties act – the regulator, carriers and passengers. The fact that the civil society had no position on this issue allowed the regulator and carriers to do that with no hassles.
Civilized reality
The situation on the bus transportation market can be resolved. At the same time, it is obvious that it is impossible to make revolution on the market in the short term. New market rules can become a good drive for its transformation, improving the quality of services provided and creating the real competition.
1. Deregulation and moving to the principle of notification regarding the opening of new inter-city routes – creating the real competition in inter-regional and intraregional routes with a total length of more than 100 km.
All bus routes are currently allocated between carriers by means of tenders, that means that officials in their offices decide how many and in what time the bus lines should be there, for example, in the inter-city Kyiv-Odessa route. This approach not only reduces competition between carriers, but also gives rise to corruption for obtaining a more convenient time of bus departure. Moreover, while regulating the number of bus lines, the state doesn’t regulate tariffs and the carriers can set prices on artificially limited services by themselves.
The optimal way is to allow carriers to make a schedule by themselves and inform the authorized state agency about this only by a notification. Passengers will benefit from the fact that, for example, five or ten buses instead of one bus depart from Kyiv to Odessa at 7:00. Everyone can choose the best value for money for himself as well as find a more convenient bus station.
2. Create incentives for carriers to use new and modern busses on urban and suburban routes.
The European experience shows that the urban and suburban transportation market unlike inter-city transportations should be regulated. It is necessary to not overload the city infrastructure and have an opportunity introduce modern fare systems.
Today the rules for issuing permits on urban and suburban routes to carriers impose only minimal requirements for buses in terms of both comfort and environmental friendliness. The only environmental requirement is the engine compliance with the Euro 2 standard, which is considered to be outdated in Europe, but such an important indicator for passengers with reduced mobility or women with prams as low-floor buses is not taken into account at all when giving the permits.
As a result, a carrier that offers completely new low-floor buses with Euro 6 engines is in an equal position with a carrier offering high-floor buses with Euro 2 engines during the tender.
It is necessary to give priority to carriers using more environmentally friendly buses and providing a higher level of services during tenders for urban and suburban routes. Particular attention should be given to buses running on alternative fuels, hybrid buses and buses with engines running on liquefied natural gas (methane) and electrobuses.
3. Introduction of tachographs and an effective mechanism to control information recorded.
Tachographs have been used for almost 30 years and have proven their effectiveness in the EU countries. This device records speed road driving on a permanent basis and allows to bring a driver to responsibility not only for speeding just before traffic inspectors or transport inspection but also throughout the whole route.
Using this device makes it unprofitable for drivers to go over the safe speed limit. In addition, the tachograph allows to control the driver’s compliance with work and rest schedules that significantly increases the safety of passenger transportations.
4. European principle of relations between bus carriers and bus stations.
Now carriers have to leave 30% of the ticket price for a bus station. Since this fee is fixed not in absolute terms but as a percentage of the ticket price, passengers of long-distance routes have to overpay for rather a poor service to a bust station significantly. The bus station’s fee may be 100-150 hryvnas per ticket on a long-distance route and 10-20 hryvnas on a short-distance route. However, services that passengers and carriers get on the bus station doesn’t depend on the ticket price and the length of the route – the same lavatory facilities, same cashier’s offices, the same waiting area and the same panel with scheduled bus routes.
The station’s fee should be replaced with the fee for entry to the bus station that will not only allow to introduce the European rules of bus stations regulation, but also will provide the carriers with an opportunity to offer passengers a more flexible system of tariffs.
While being the adopted standard in EU countries, bus fee for entry to the bus station depends not on the ticket price but on the bus size and the time of its stay on the bus station.
It is important to remember that bus stations and terminals are monopolies as usually. To prevent abusing the monopoly’s position, payment rates should be a public offer and agreed with local authorities.
Also, bus stations should have the right to provide discounts to carriers performing, for example, more than 500 routes via the station per month. Discounts should be non-personalized and be offered to all carriers under clearly stated criteria.
5. Implementation of the European approach to the carriers’ admission to the passenger transportation market.
European rules provide for the requirements to the carrier’s financial capacity as well as determine the liability of carriers for transportation and introduce the concept of “carrier’s honesty”.
In addition, we should pay attention to requirements to a number of busses in the park of carriers wishing to enter the market, the concept of “minimum number of seats”. For example, Turkey has a requirement of minimum 300 seats.
That implies that carriers will choose themselves what park to declare: 5-6 large buses or 10-12 small buses. This was a good motivational factor for using large buses, which are much safer for passengers. There is also the rule allowing to use small buses only for inter-city routes with a total length of less than 100 km.
Although full implementation of new rules and standards will take some time, there is no doubt that the proposed steps can show the first results very soon. We will have a chance to see more and more new modern buses on our roads.
New rule will encourage the carriers with modern buses to enter the market, and passengers will get an appropriate level of services at affordable prices while travelling across our beautiful country.