Organizational responses to the deregulation of the bus industry in Britain

Abstract

The British bus industry, outside London, was deregulated in October 1986. For the first time since the 1930s bus operators were able to compete within local markets and experiment with service delivery. As a consequence, it was contended that deregulation would arrest the long term decline in bus patronage. This paper begins by documenting the key trends within the industry which have emerged since 1986. It then considers the implications of deregulation and privatization from an organizational perspective, at the level of the individual bus company. Findings from a study of nine British bus companies are presented and discussed. Their three principal strategic responses to the deregulated operating environment are identified and discussed. The evidence suggests that the ability of an individual bus company to innovate in ways which will guarantee its survival is heavily circumscribed. As a consequence, the capacity of an individual bus company to achieve the requisite level of internal stability to face...