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Privatisation 'On The Buses' - Battle Of The Buses: First Sight: The Stagecoach Takeover
Again we take a sideways step away from railways to look at buses.
In this edition of First Sight from 1994 reporter Paul Clifton takes a look at the privatisation of London Buses and how the franchise system works.
London's buses are famous around the world for being red and many people may think that they are all operated by a single company but they are not.
Welcome to the world of franchises.
Take note how just like the railways, the fares are not set by the individual company who runs the franchise but the overload authority, London Buses (now Tfl). The money collected from fares DOES NOT go to the individual company who runs the franchise.
This system is still in place today and individual companies bid an overall price to run each franchise for a nominated period which includes the amount of services it must run and the vehicles it must use. If any services get cancelled then a fine is imposed on the franchisee which will affect it's profit margin.
This system has proven successful for the big fish of bus companies who can afford to take a risk but the smaller independent bus companies who are dependent on the income raised through fares get swallowed up and end up going out of business.
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