Competitors’ price rises disappointing
19 December 2006
Nakedbus.com brands competitors’ price rises disappointing
A popular new city to city bus service has branded its competitors’ price rises as disappointing.
Nakedbus.com services more than 60 North Island centres with its no frills approach to domestic travel boasting bus fares as low as $1.70.
Managing Director Hamish Nuttall says the Auckland Regional Transport Authority’s price hike could prove counter-productive.
He agrees with Auckland Regional Council chairman Mike Lee’s criticisms that the price rises come at a bad time for workers and students.
“The increased fares for buses and trains seem to indicate a lack of competitive pressure. There seems to be little competition for passengers which means that operators aren’t forced to be price competitive. We recognise that we are competing against the private car and even airlines as well as high cost bus services so we have to be extremely sharp with our pricing,” says Nuttall.
Nuttall says competitors’ claims that fuel and operating costs has forced them to push up their prices are questionable.
”Some costs are increasing though not as much as other bus company prices are. The biggest cost is however carrying empty seats. Nakedbus.com’s business model is to fill those empty seats which make our low fares viable.”
Based on hugely successful British transport models like Easyjet, Nakedbus.com cuts the overhead costs from the ticketing process by providing ‘internet only’ ticketing (www.nakedbus.com) instead of expensive salespeople.
While consumers use the online ticketing option resulting savings are passed onto the travellers allowing each bus trip to offer dramatically reduced fares.
Nuttall is also concerned about the effect negative publicity surrounding the price rises will have on the industry as a whole.
”It would be a real shame to see this have the consumer turn off public transport when it has such potential to reduce reliance on imported fossil fuels, reduce pollution and increase accessibility. Some people will revert to car use and those that have no alternative will be forced to pay the higher cost.”
Nuttall says not only will the consumers suffer but the region as a whole will now find it difficult to promote public transport to a cynical public.