Greyhound is about supply and demand
The provision of bus service in the B.C. Interior is a real challenge. The distances between settlements can be quite large and the population from which clientele can be expected is relatively modest. Therefore, operating such service profitably is extremely difficult.
The Greyhound bus company has tried to function in this hostile economic environment, but recently effectively threw in the towel and applied to the regulatory body to suspend or substantially reduce service on a large number of routes throughout the Interior.
In response, there followed a host of complaints and suggestions as to what should be done. A central theme of many of the comments was the need for the provincial and/or federal government to do something. This is usually code for sending money to solve the “problem.”
The “problem” illustrates the basic economic concepts of supply and demand. The demand for bus service in the Interior is largely limited to those who lack independent means of transportation (such as the young, the elderly, the physically handicapped or people of low income) but who need to move within or beyond the region.
Their reasons range from accessing specialized medical treatment to obtaining legal or financial assistance to visiting farflung family. These demands reflect one of the “costs” of living in small communities that are widely dispersed across a vast landscape
Offering specialized services in remote communities is often not practical. Take the example of medical specialists. Retinal surgeons, dermatologists, plastic surgeons and endocrinologists all require a large population base to support their practices and that is why they locate in major urban centres.
Patients living in remote areas have to go to them rather than vice versa. The same is true for other specialized services from legal advice to financial services.
People live in remote areas for any number of good reasons from personal preference to engaging in industries such as logging or mining or farming. They all have an interest in the provision of transportation services to their communities but operating such a service is challenging.
To do so successfully involves acquiring, operating and maintaining a fleet of vehicles, hiring and training operators and mechanics, developing a capacity to sell tickets and provide amenities along any of the routes. Those tasks are what Greyhound does and has been doing for decades.
Asking senior governments to determine what is required and how to provide it is unlikely to result in a durable solution to Greyhound’s termination of service. It is the local communities themselves who know the conditions that determine the demand within their regions for transportation services.
In major urban areas such as Victoria or the Lower Mainland and even in the Okanagan, civic governments have established corporations charged with providing transit services which they subsidize.
By doing so they are contributing to an improved operating efficiency of their communities while lessening congestion on the roads (which are, after all, limited in capacity).
So why would rural communities not band together to form a corporation that would bargain with Greyhound to determine for a given period, say five years at a time, the amount of funding (above and beyond passenger fares) that would be required to maintain a given level of service? The financial burden could be spread among the communities based upon population.
It will be greatly to their economic and social benefit if they can find a solution responsive to their needs. What is required is leadership in forming a bargaining authority and recognition by all the communities that nobody but themselves can solve the problem properly.
If there ever was a “local” problem, this is it and hoping that somehow either the provincial or federal government will step up and do it for them is just wishful thinking and a waste of time. So get on with it and demonstrate both community spirit and responsibility.
David Bond is a retired bank economist whose column appears Tuesdays.