Getting to Pearson

[ijmorlan]

If neither can operate at a profit, one will pull out, restoring an appropriate level of competition. So the argument about preventing over-competition is completely bogus. If it were valid, it would apply to everything — I shouldn’t be able to start a grocery store without Zehr’s having an opportunity to object, for example.

The legitimate regulation in the transportation industry has to do with transportation-specific considerations. For example, suppose there is an existing operator. Now I schedule buses to leave 30s before each of theirs, and scoop up most of their passengers. This leads to an unstable situation that isn’t good for anyone. So some regulation is needed. But the idea that a new entrant shouldn’t be able to enter freely by following the same standards as existing operators is wrong. Same applies to dairy, taxis, and who knows what else.

I don't see the need to prevent a new operator from scheduling their departure 30 seconds earlier.  I think that is more of an issue left to the station to settle.  Airlines schedules are essentially regulated by licensing the available slots and not by when a competitive airline's flight is scheduled.  If there is capacity, let the carrier (bus or plane) set their own schedule.   Regulations should relate to safety and consumer benefit and not competitive issues.  Helping carrier A vs carrier B should not be goal of regulation - focus on benefits to consumers.

Here’s the problem: new operator departs 30s before existing operator, takes most business. Old operator moves departures 1 minute earlier, takes back business. Repeat. Result: chaos. To be fair, since we’re talking about scheduled intercity service, this might not be as big a problem — if people buy their ticket ahead of time, they won’t even notice schedule games like this. But imagine local cash fare services, like what is now provided by public transit services. Riders will just get on the first bus to arrive.

So in at least some transportation markets, some sort of regulation in the public interest is required. The self-interest of the business owners will not give a good outcome. I’m not sure exactly what sort of regulation is right but the above sort of consideration is the sort of thing that needs to be taken into account.

Interesting point about the station, though. The buses need to pick up somewhere; what is the best way to do that? Auction off departure slots? Lease bays? Something else? I wonder if it could work to do all the regulation at the stations or stops, operating on the idea that a vehicle driving down a road is just traffic and isn’t the legitimate target of licensing by time/route/destination.