BCA Concerned At Potential Reduction Of Competition In Bus Industry

The Bus and Coach Association is concerned about the proposed merger between NZ Bus and Kinetic (Go Bus), two of New Zealand’s largest bus companies, currently before the Commerce Commission.

“We have seen a trend in the industry in recent years of larger companies consuming smaller ones, leading to an increasingly small concentration of operators and less competitors in the market overall” says BCA Acting CEO Max Dickens.

“It’s particularly sad to see these companies moving from community-centric, kiwi-owned and family-run models, to being run by overseas conglomerates and the loss of local understanding that comes with that.” he says. “Many smaller companies have folded as a result of the pandemic and tender processes. Kinetic is the largest bus operator in Australia, and if this merger proceeds it will fast be on their way to dominance of the Australasian market.”

“Increased market power inevitably leads to a reduction in quality of services, something that is already an issue in an industry forced into a race to the bottom through a competitive tender process, where contracts are awarded to the lowest bidder regardless of their quality or working conditions. Allowing a critical service provider to become this large will give them the ability to reduce the quality of their services below competitive levels.”

The BCA hopes that the Commerce Commission carefully considers the impact that this merger could have on the New Zealand bus industry that has already been through the ringer the last few years.

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