Real rea­sons be­hind Grey­hound’s demise


When the tra­di­tional bus line in the Mar­itime provinces (Aca­dian) closed six years ago, there were bus­loads of sky-is-fall­ing pre­dic­tions, just as there are now in Western Canada over Grey­hound’s an­nounce­ment it is pulling out at the end of October.

Then a new car­rier, Mar­itime Bus, started up.

The new com­pany’s buses of­ten aren’t as large as Aca­dian’s — a large van or shut­tle ver­sus a high­way coach. They usu­ally don’t run as of­ten, es­pe­cially in off-peak sea­son when the com­pany tries to en­tice schools, sports teams and tour groups to rent them for char­ters.

Still the new ser­vice makes sense given the cus­tomer de­mand in the re­gion.

Be­fore any­one in the West starts de­mand­ing a tax­payer-sub­si­dized “so­lu­tion” to the loss of Grey­hound, con­sider the ex­am­ple of Mar­itime Bus.

Much has been made of Grey­hound’s dras­tic loss in rider­ship, and rightly so.

Since 2010, the com­pany claims pas­sen­ger busi­ness is off 41%. That is Prob­lem No. 1.

But it is far from the only rea­son “the Dawg” is pick­ing up its bone and trundling off.

In some provinces (in­clud­ing Al­berta un­til dereg­u­la­tion in 2011), the govern­ment granted Grey­hound mo­nop­oly routes but with the stip­u­la­tion the com­pany use only large buses and sched­ule buses at reg­u­lar in­ter­vals, whether or not there were enough rid­ers.

For in­stance, a govern­ment might de­cree that there had to be a full-sized bus leave Town A at least once a day headed for Big City B. Didn’t mat­ter whether there was enough busi­ness to turn a profit on that route. The govern­ment felt there was a valid pub­lic-pol­icy rea­son for the ser­vice, so it com­manded Grey­hound to do so.

The com­pany was ham­strung. It couldn’t cut back many of its routes or it risked los­ing its in­ter­city car­rier per­mit.

The price of fuel, which is an­other fac­tor at least partly un­der govern­ment con­trol (car­bon and ex­cise taxes make up to 40% of fuel charges), also ate into Grey­hound’s prof­its.

And dis­count air­lines such as Flair and Swoop have de­pressed bus busi­ness. Why take 14 to 16 hours to get to Win­nipeg by bus when for roughly twice the fare it is pos­si­ble to fly there in two?

The de­cline in bus rider­ship is a clear sign that even low-in­come con­sumers are weigh­ing cost ver­sus con­ve­nience, and choos­ing con­ve­nience as the price gap between bus and plane shrinks.

Ve­hi­cle own­er­ship is up, too. Fewer peo­ple are trav­el­ling by bus be­cause fewer peo­ple are car­less.

None of the rea­sons for Grey­hound’s demise require a tax­funded so­lu­tion. Yet that is what fed­eral NDP Leader Jag­meet Singh is call­ing for — mil­lions taken from tax­pay­ers and given to Grey­hound to keep op­er­at­ing, es­pe­cially to North­ern and In­dige­nous com­mu­ni­ties.

There must be a “fed­eral fund­ing plan,” Singh wrote to Prime Min­is­ter Justin Trudeau on Wed­nes­day. And that plan must mean “there is no in­ter­rup­tion or re­duc­tion in bus ser­vice, so no com­mu­nity is left stranded.”

But in­stead of yet an­other govern­ment hand­out to a strug­gling cor­po­ra­tion (any­body want to buy a pipe­line?), the Western provinces need to get to­gether to dereg­u­late in­ter­city bus ser­vice.

There is al­ready too much govern­ment in the way. More govern­ment is not the an­swer.

Gov­ern­ments need to let what­ever com­pany or com­pa­nies pick up Grey­hound’s slack de­cide on their own what ser­vices to pro­vide based on de­mand, rather than on some “so­cial good” cho­sen by the govern­ment.

There should be no cross-sub­si­diza­tion of routes whereby bus com­pa­nies are re­quired to use money made on prof­itable routes to cover their losses on fail­ing routes.

It should be pos­si­ble (as it was in the Mar­itimes in 2011) to find a suc­ces­sor to Grey­hound with­out a lot of govern­ment in­volve­ment.

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