Source: “NV.Biznes”
How can Ukraine return the business of interregional bus services?
In recent years, our country started to reform the railway and air transportation enthusiastically. This aim is necessary and good. However, as a rule, the priorities were not so good. Hard statistics clearly show: almost a half of the market in the passenger traffic structure is the bus services. But there are problems with this sector. Therefore, they should be reformed first and foremost.
Based on the results of 2015, the railway traffic amounted to 390 million passengers a year, the aviation – just over 6 million passengers, and the bus transportation – 2.3 million. Based on the results of 2013, more than 3 billion passengers were transported by buses and in 2008 – almost 4.5 billion. It is possible that this difference “migrated” to illegal bus carriers. According to unofficial estimates, now about 5 billion passengers use bus services. Less than a half of them are legal.
The market volume exceeds 100 billion hryvnas a year.
What is wrong with a “shadow carrier”? Actually, he provides people with what they need – satisfy the demands. However, it turns out that such “satisfaction” can be dangerous.
First, some, but practically the most of shadow carriers don’t even have a license. When something happens, a carrier is not responsible to the passengers. Paying for services is carried out in cash and there are no records. It doesn’t provide any insurance fees, not to mention paying taxes.
Further, prices of our carriers reached a current European level, but the quality still remains at the African level in most cases. To my mind, most readers here will remember tattered chairs, a bus that jumps, rattles and even breaks down on the road from own experience.
However, the worst thing is that the “shadow” transportation services don’t provide any safety guarantees. There is the depressing statistics: about 60 people die in the intercity bus transportation and 700-800 – are injured every year. The reasons: busses don’t meet safety standards, drivers violate not only traffic rules, but also working hours and break time.
According to the law, the mode of work and rest is quite strict: after every 4 hours of driving, a driver should have a rest, there should be two drivers on the route, which is of more than 9 hours’ length, and the company should pay two salaries respectively. But our “shadow” carriers try to save: after more than a 4-hour trip, the driver immediately takes hold of the wheel to start his trip back, one driver is assigned to a 9-hour trip. Moreover, the drivers, who have not such a high salary, also seek additional earnings instead of trying to comply with safety requirements concerning their own health.
In order to ensure the safety, EU countries have been applying a requirement that buses should be equipped with tachographs – devices for permanent registering of the vehicle’s speed- for almost 30 years. Thus, employees of the Ukrainian Transport Inspection could check a speed mode of a bus throughout the trip. In reality, illegal drivers are riding with a speed of 130 and 150 km/h. And this creates a huge risk to the life and health of passengers.
You may ask: “Who is to blame?” The existing rules for regulation of the bus transportation market. The state artificially restricts an offer of services in the competitive segment of transportation and established low requirements on the safety of buses. But there is no price regulation. So, it turns out that the offer of services is restricted for customers, unlike their price. Thus, we have the European prices for the African quality.
There would be no problem, if the state approved itself as a smart manager. The shadow segment appears, as officials decided that there should be roughly just 10 bus trips per day on the Kyiv-Kharkiv route. In fact, they determine this number of trips based on a conditional assessment, details of which are not disclosed. And even if a carrier comes and offers to add another two trips, because the carrier sees the demand, he gets the answer: well, go at 4 o’clock in the morning. It is clear that these factors encourage the corruption – “go hat in hand to us and arrange a matter”.
In this situation, the carriers, knowing that the demand for transportation services is high and the control is minimal, offer their services bypassing the government “cashier’s office”. At the same time, this situation have had a strong lobby in the circles of officials until recently. Therefore, the attempts to introduce the European rules on the bus services market have failed.
The next point of this logical chain: how to solve the problem? Our proposal: it is necessary to radically revise the rules for the operation of bus carriers on long-distance routes first and foremost and introduce European approaches. This category includes all bus routes with a distance of over 50 km. To do this, first it is needed to refuse regulating a number of trips and introduce strict requirements to the service quality and safety standards. We should abandon the limitation of a number of trips within intercity bus services. The number of trips on the route from Kyiv to Odessa or Poltava should be determined not by an official from the Ukrainian Transport Inspection, but by the market. If 5 entrepreneurs at the same time want to carry people from Kyiv to Odesa, Poltava or Kharkiv – they are welcome. And then passengers will decide whose services they want to take advantage of, taking into account a comfortable schedule, the price-quality ratio, the availability of WiFi or some other entertainment.
It is necessary to amend the law on road transport that provides for the introduction of the European Application principle to assign to an intercity route. If a carrier, who has a license to carry passengers, wants to offer transportation services on the Kyiv-Odessa route, he shall form his schedule, decide what vehicles from his fleet he can use, send a notification to the Ukrainian Transport Inspection on what vehicles and on what schedule he will work. The Inspection should include this information to a common database. And when the carrier concluded the agreements with bus stations, he should have the right to start offering his services.
This process is not as complicated and time-consuming as it may seem. In many European countries, the bus transportation market has been overregulated until recently. For example, in Germany, the bus services market has been seriously restricted by 2012: the intercity bus transportation was not allowed if there were Deutsche Bahn trains on the route. In other words, the buses played a minor role only on routes where there was no railway communication. Starting from 2013, the German government decided to liberalize this market. This was the “daybreak” for bus services: there were a few large companies that have started not only to work in the domestic market, but also carry out international transportation operations within the EU. The passengers enjoyed the benefits of the new system very soon: the price of transportation services became lower than in the same Deutsche Bahn trains. Moreover, there is a flexible pricing system for tickets that allows to buy the tickets at different prices: if you buy in advance, you can buy them for1-2 euros, if later – the price will be higher.
Briefly instead of the summary: we should address the question of intercity bus transportation in Ukraine. And the sooner, the better. This is a matter of life and health of our citizens, the development of adequate market relations in the large field of bus transportation services. And, of course, it is a matter of stable revenues for state and local budgets.