subsidiary of Stagecoach Holdings, one the largest UK bus groups. Fife Scottish might have expected to recoup losses on both tendered and commercial services. A reputation for duplicating services lost to competitors in a tender might deter some operators from entering future tenders or add a risk premium to their tender bids. In addition, smaller operators often use subsidised services as a basis from which commercial services are developed. Therefore, Fife Scottish's actions might also reduce the degree of competition faced on non-subsidised services.

The investigation found that on each of the six routes in question, Fife Scottish incurred incremental losses, and activity losses on five of the six routes. It was concluded from the evidence that the company's actions were targeted against the tendered services of Moffatt and Williamson.

##### 3.3.6. Conclusions

The evidence points to considerable dis-benefits of deregulation in the bus industry. While some customers are getting a better service, for example in towns where frequency of service has increased, the downside has been a considerable increase in congestion and environmental pollution in cities. Moreover, the social costs of reductions in employment are not included in cost benefit calculations of gains and losses of deregulation. On the other hand, there are clear benefits to the legal profession arising from the number of cases concerning anti-competitive behaviour.

#### 3.4. Express coach deregulation

An ‘express service’ is that of a scheduled service carrying all of its passengers at least 30 miles (measured in a straight line). Under the 1985 Traffic Act, the dividing line was revised downwards to 15 miles. This market is effectively de-regulated except that Operator (O) licenses are subject to PSV operators licences, drivers hours, safety and environmental regulations. $ ^{1} $

The 1985 Act also removed previous distinctions between other types of service, such as 'excursions', 'tours' and 'contract'. In national statistics all services which are not local buses are described as 'other'. In 1993/4, this category represented about 1,440 million vehicle-km (compared to 2,580m 'local') and revenue of £960m (compared with £2,260m local) (DoT 1994b). However, the scheduled express element within this element was very small, figures for 1994 showed that passenger trips on services other than 'stage carriage' (known as 'local') totalled 587 million. Of these only 17 million were express scheduled, 30 million were excursion and tour, and the majority, 540 million, were 'private hire' and contract. The last category is that in which the entire vehicle is hired out, for example, to a club or society, or to a body such as an employer or education authority, who then provides free travel to a designated group of users.

An incentive exists for operators to register services as 'local' (i.e. to ensure that stops are provided at least every 15 miles), since most of the fuel duty is rebated on such services, but no rebate is available for 'express operation' as such (or any 'other' service category). This effectively halves the cost of fuel to the operator. Many commuter, regional, and cross-country services seen by users as 'express' are in fact registered as local services.