TGM Start Price War in Harlow

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TGM seem to be trying to undercut the competition with there service 1 which is charging a fare of only £0.50. This seems to be a deliberate predatory move to try to drive the competition out which has gained significant ground due to the high fares and poor services Arriva provided.

I can see the regulator making a move here as they are coming down much harder on operators using these tactics. It seems highly unlikely that a fare of £0.50 is economic and if it is why are they charging well over double on their other routes?

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I think its definatly trying to drive out the competition. The 1 is competing against SM Coaches service 1/31, which serve Katherines and Sumners. The 50p fare is also just an introductory offer as it says on the leaflet

To be fair, SM Coaches have significantly undecut Arriva on many Harlow routes before. Also, they pushed out Arriva from serving Sumners and Katherines a few years back, with Arriva just left with operating Essex CC evening contract service 1 (which they still operate).
Note: Network Harlow route 1 and SM Coaches route 1 are commercial, with Network Harlow's evening service on the 1 being an Essex CC contract.

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Sept 19, 2010 11:10:49 GMT @truffles1234 said:

I think its definatly trying to drive out the competition. The 1 is competing against SM Coaches service 1/31, which serve Katherines and Sumners. The 50p fare is also just an introductory offer as it says on the leaflet

To be fair, SM Coaches have significantly underut Arriva on many Harlow routes before. Also, they were responsible for pushing out Arriva from serving Sumners and Katherines a few years back, with Arriva just left with operating Essex CC evening contract service 1 (which they still operate).

Yes but SM Coaches operated on a commercial basis. The 50p fare is not a commercial fare it is loss making

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Sept 19, 2010 11:45:03 GMT bob said:

Sept 19, 2010 11:10:49 GMT @truffles1234 said:

I think its definatly trying to drive out the competition. The 1 is competing against SM Coaches service 1/31, which serve Katherines and Sumners. The 50p fare is also just an introductory offer as it says on the leaflet

To be fair, SM Coaches have significantly underut Arriva on many Harlow routes before. Also, they were responsible for pushing out Arriva from serving Sumners and Katherines a few years back, with Arriva just left with operating Essex CC evening contract service 1 (which they still operate).

Yes but SM Coaches operated on a commercial basis. The 50p fare is not a commercial fare it is loss making

How can you be sure SM didn't lose money when they undercut some of Arriva's routes?

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Sept 19, 2010 13:19:18 GMT @truffles1234 said:

How can you be sure SM didn't lose money when they undercut some of Arriva's routes?

There is a difference between undercutting someone as a loss-leader to gain ground or put out of business and simply being cheaper. SM never massively undercharged then put the price up after Arriva pulled out. They have continued to charge similar fares despite the lack of competition, so if they were losing money then they would have gone out of business a long time ago.

And it is not the first time Arriva pulled out of that route. They only returned to ensure a service following the collapse of Buzz, having previously decided competition was hurting both companies and withdrawing. It is possible they simply took the same view again.

Anyway, according to the timetable on www.harlowbus.com/ the new route will run every 10 minutes until midnight. I am guessing someone needs to tell them that is surely a misprint.

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I see your point.

SM have always been cheaper than Arriva when competing against them, but never as much as the 50p introductory fare TGM are offering on the 1 service. TGM have the advantage of being a big company who can afford loss-leader tactics whearas SM would find it more difficult.

Until recently, SM's 19 service from Epping to Harlow cost just £1.50 single, compared to an astonishing £4 single on Arriva's 500/501. This has changed now, and Arriva/TGM now offer the £2 Harlow Day Ticket which has recently included Epping in the zone. SM have got rid of the £1.50 fare and just sell their own £2 Harlow Day Ticket.

Also, that Network Harlow site is definatly still in the development stage. On the leaflet which is very similar to the web layout advertising the 1, it does say it operates every 30 mins up to midnight, but for some reason it wrongly says every 10 minutes on the site.

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Sept 19, 2010 14:45:41 GMT someone said:

Sept 19, 2010 13:19:18 GMT @truffles1234 said:

How can you be sure SM didn't lose money when they undercut some of Arriva's routes?

There is a difference between undercutting someone as a loss-leader to gain ground or put out of business and simply being cheaper. SM never massively undercharged then put the price up after Arriva pulled out. They have continued to charge similar fares despite the lack of competition, so if they were losing money then they would have gone out of business a long time ago.

And it is not the first time Arriva pulled out of that route. They only returned to ensure a service following the collapse of Buzz, having previously decided competition was hurting both companies and withdrawing. It is possible they simply took the same view again.

Anyway, according to the timetable on www.harlowbus.com/ the new route will run every 10 minutes until midnight. I am guessing someone needs to tell them that is surely a misprint.

Fairly typical of these big bus groups. There is no excuse for not ensuring information is accurate. Are they seriously saying this service will operate every 10 minutes upto midnight.?

It also states the fare is £0.50 on any journey anytime but then adds an * which says not on ECC journeys so the first statement is untrue.

The map shows evening journeys going to Harlow Town Rail Station but the timetable does not.

That level of basic areas is just not acceptable in my view and they cannot hide behind the standard cope out of disclaming it. The law no longer allows companies to wash there hands of everything and anything

It is not a good start for TGM

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Their logo looks like something made using Word Art in the early 90s. Maybe they should have resurrected their old TownLink logo from the same time which at least looked like something.

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Yes, TGM haven't really made a good start with all those mistakes, but I suppose its to be expected for a low cost operation.

And it seems Network Harlow's competition against other routes is already working. SM Coaches have deregistered routes 1/31 from 30th October 2010, so TGM have got the Katherines and Sumners estates all to themselves from that date. SM have operated on those estates for a good few years now, but I don't think there would be much more they could do to fight off TGM. If they have lower fares than TGM on that route, then they would certainly lose money.

Also on 30th October, SM have also deregistered service 5 (Harlow-Old Harlow via previously unserved roads of Howard Way and Edinburgh Way), as well as peak hour services 9 and 16 which operate between Bus Station, Town Station and the industrial areas of Harlow. They have also revised most of their timetables from the same date as well.
SM also face competition on their 524 route (Harlow-Hertford), with Centrebus starting another 524 which follows the exact same route. The Roadrunner operations of R3 also face more competition. Centrebus are introducing service C3X (alongside existing C3), which has a slightly more direct route between Harlow, Hoddesdon, Cheshunt and Waltham Cross.

Also, Arriva's Harlow routes 4 (Bus Stn-Latton Bush), 6 (Hospital-Latton Bush), 7 (Churchgate Street - Sumners Farm), 8 (Bus Stn-Old Harlow), 10 (Bus Stn-Church Langley) and market days service 522 (Bus Stn-North Weald Market) will be transferring to Network Harlow from 01/11/2010, following the 1 and 2/3 which are already network harlow routes.

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Sept 22, 2010 11:06:34 GMT @truffles1234 said:

Yes, TGM haven't really made a good start with all those mistakes, but I suppose its to be expected for a low cost operation.

And it seems Network Harlow's competition against other routes is already working. SM Coaches have deregistered routes 1/31 from 30th October 2010, so TGM have got the Katherines and Sumners estates all to themselves from that date. SM have operated on those estates for a good few years now, but I don't think there would be much more they could do to fight off TGM. If they have lower fares than TGM on that route, then they would certainly lose money.

Also on 30th October, SM have also deregistered service 5 (Harlow-Old Harlow via previously unserved roads of Howard Way and Edinburgh Way), as well as peak hour services 9 and 16 which operate between Bus Station, Town Station and the industrial areas of Harlow. They have also revised most of their timetables from the same date as well.
SM also face competition on their 524 route (Harlow-Hertford), with Centrebus starting another 524 which follows the exact same route. The Roadrunner operations of R3 also face more competition. Centrebus are introducing service C3X (alongside existing C3), which has a slightly more direct route between Harlow, Hoddesdon, Cheshunt and Waltham Cross.

Also, Arriva's Harlow routes 4 (Bus Stn-Latton Bush), 6 (Hospital-Latton Bush), 7 (Churchgate Street - Sumners Farm), 8 (Bus Stn-Old Harlow), 10 (Bus Stn-Church Langley) and market days service 522 (Bus Stn-North Weald Market) will be transferring to Network Harlow from 01/11/2010, following the 1 and 2/3 which are already network harlow routes.

This is clearly predatory behaviour by Arriva. Slash the fares well below the economic level and subsidies TGM's cost by sharing the garage at Harlow this enables them to load the garage costs onto Arriva whilst charging TGM next to nothing fo using the garage

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Probably old news, but while making plans for over Christmas I noticed that this price war has not amounted to anything.

SM Travel have simply replaced their 1/31 service by extending the 19/20 over it, so were not forced out by TGM, while the Network Harlow site now lists their single fares as being £1.60.

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SM are infact re-introducing a route 1 (under Roadrunner Coaches), and presumably getting rid of the 19/20 extension.

It does seem Arriva/TGM are starting to beat SM/Roadrunner/Olympian. Routes M2 (competing against TGM 2/3) and M4 (competing against TGM route 4) will be withdrawn in Jan 2011. TGM have also extended route 6 to Potter Street every 10 mins, where SM have been taking most passengers for a few years. SM now seem to be attempting more country routes, linking towns rather than estates, like with routes to Bishop's Stortford, Hertford, Hoddesdon, Nazeing, and from Jan next year, Brentwood.

TGM have increased the fares recently. Im not sure if SM have. Previously, SM beat Arriva by offering much cheaper prices (best example being on the Harlow-Epping corridor), so they could just do the same thing again.