French buses A Billet to Ride

After years of protecting its state-owned rail operator, France is hastily deregulating long-distance coach travel in what the government hopes will be a vote winner. French and German operators are already vying for position.
Today Paris, tomorrow the world! Well, France anyway.

It is said that the French consider their summer vacation sacred. But this year, Pierre Cardo is having to do without his. Instead, the president of ARAF, the French railway regulator, is staying in the office to help others get to their holiday destinations.

By mid-August, he must implement a new law liberalizing and revolutionizing the long-distance bus market in France.

Mr. Cardo is training staff at top speed, getting the agency’s IT updated and overhauling the bus licensing process. The new highway rivals to France’s state-owned railway company, SNCF, were originally due to be signed off next January, but the new law has been brought forward so that it will cover this year’s holiday season. Vacationers are booking at breakneck speed.

Can this really be happening in a country that has been so resistant for so many years to the liberalization of rail transport in order to protect the state monopoly?

The nation that finds opening new markets so difficult? The simple answer is that France is defying its critics with its aggressive approach to the long-distance bus market and is taking the lead internationally.

Prime Minister Manuel Valls drove the new law through parliament like a double-decker bus, knocking aside fierce opposition from his own ranks.

The driving force behind the haste is political. Two years ahead of the next general election, President François Hollande wants to rebuild his dire polling figures. Voters have demonstrated little confidence in his abilities, particularly managing the economy. Mr. Hollande wants to counter this impression by enacting liberal market reforms.

In mid-July, Prime Minister Manuel Valls drove the new law through parliament like a double-decker bus, knocking aside fierce opposition from his own ranks. It has taken ARAF, which has been hastily expanded to cover bus regulation too, by surprise and Mr. Cardo has complained that he does not have the necessary staff or finances. “But,” he said. “We have no choice.”

Mr. Hollande is using Germany as his role model. The country has seen a recent boom in long-distance bus travel since deregulation: In 2014, 15 to 20 million customers traveled with the bus - twice as many as the year before.

Yet France’s ambition is so great that it is quickly catching up.

There are several reasons. For example, long-distance bus operators in Germany must have every route approved, an arduous and time-consuming process. Operators in France register just once with Araf. If the agency’s technical inspection is passed, they can hit the road immediately.

Applications for long-distance routes are immediately posted on the agency’s website, but French regions can only exercise a veto on routes shorter than 100 kilometers (62 miles). In this way, Paris protects publicly subsidized local transportation.

Experts predict a robust long-distance bus boom in France, which has a potential sales value of €600 million ($658 million) annually outside the boundaries of Paris.

Meanwhile, the SNCF is looking to get in on the act. The company has purchased 80 buses and its iDBus brand is already up and running. But it faces stiff opposition.

The leading European coach travel company Eurolines, which is operated by French transport giant Transdev, has also opened new routes and, like iDBus, is already operating them despite the new law not coming into effect until mid-August. Starshipper, an association of independent bus operators, is hot on their tailgates.

France’s deregulation has also lured the German market leader, Meinfernbus Flixbus, which according to the consulting firm Iges has a 71 percent market share in Germany. “By the end of the year, we will have a national network of all of France’s major cities, connecting about 60 destinations several times daily,” chief executive Torben Greve told the weekly business news magazine WirtschaftsWoche. The company has already opened an office in Paris.

“We will create an additional 1,000 new jobs for us and our French partners,” Mr. Greve said, adding, “We want to become the market leader in France.”

 

This article originally appeared in the business magazine WirtschaftsWoche. To contact the authors: [email protected], [email protected]