| The Office of Fair Trading said they were referring the industry to the commission over concerns local bus services tend to be dominated by a small number of large players — leading to higher fares.
Stagecoach and National Express Dundee — the main operators in Dundee and surrounding areas — today declined to comment on the claims.
Instead, both firms referred the Tele to a statement released by the Confederation for Passenger Transport on behalf of the industry as a whole.
John Major, CPT’s director of communications said, “Bus companies operate in highly competitive local markets and it is always in our interests to keep prices competitive to attract passengers out of their cars and on to our services.
“There is a great deal of competition between bus operators, large and small, but the biggest competitor for the bus industry is the car.”
Mr Major added that the OFT’s decision not to consider the impact of car travel in their deliberations was “disappointing”.
“To have excluded this key component from the investigation is, we believe, wrong and means the chance of something really positive or meaningful to passengers coming out of this exercise has been wasted,” he said.
“Obviously we will work with the commission and provide them with any assistance they need in bringing their deliberations to an early conclusion.
“But let us be clear that this referral does not alter the fact that the industry delivers one of the most comprehensive bus networks in Europe for one of the lowest levels of public subsidy.”
In August, the OFT published the results of its investigation into the Ł3.6 billion local bus sector in England, Scotland and Wales, excluding London.
It found evidence of limited competition that was forcing prices up, with passengers forking out an average 9% more for fares where there is only one major national player.
The OFT also warned of the “predatory behaviour” of certain firms that stifle competition and see off potential rivals.
Announcing the referral, Heather Clayton, a senior director at the OFT, said, “One of the concerns that we think the Competition Commission should take a look at is the tendency for local areas to become dominated by a single operator.
“This is certainly not about a return to ‘bus wars’ or unmanaged ‘head to head’ competition on every route, but we do think large bus operators should face a healthy level of competitive constraints.
“Given the size and importance of this industry, with at least Ł1.2 billion coming from the public purse every year, the OFT believes it is appropriate for the Competition Commission to investigate how, in its various forms, competition can be harnessed to deliver what passengers want and the best value for money for the tax payer.”
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