EUROPEAN COMMISSION

Brussels,8.11.2017

SWD(2017) 358 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT

Accompanying the document

Proposal for a Regulation of the European Parliament and of the Council

amending Regulation (EC) No 1073/2009 on common rules for access to the international market for coach and bus services

{COM(2017) 647 final}

{SWD(2017) 359 final}

Table of Contents

Glossary of definitions, acronyms and abbreviations Glossary of definitions, acronyms and abbreviations

1. 1. Introduction

2. 2. What is the problem and why is it a problem?

2.1. 2.1. Policy Context

2.2. 2.2. Market Context

2.3. 2.3. Evalu ation of the Regulation

2.4. 2.4. Problem definition

2.5. 2.5. What are the problem drivers?

2.5.1. 2.5.1. Problem driver 1: Restricted access to national inter-urban markets

2.5.2. 2.5.2. Problem driver 2: Excessive administrative costs of entry

2.5.3. 2.5.3. Problem d river 3: Restricted access to key infrastructure

2.6. 2.6. Who is affected by the problem, in what ways, and to what extent?

2.7. 2.7. What is the EU dimension of the problem?

2.8. 2.8. How would the problem evolve, all things being equal?

3. 3. Why should the EU act?

3.1. 3.1. Legal Basis

3.2. 3.2. Subsidiarity

3.2.1. 3.2.1. Nec essity test

3.2.2. 3.2.2. EU added value test

4. 4. What should be achieved?

4.1. 4.1. General policy objective

4.2. 4.2. Specific objectives

5. 5. What are the various options to achieve the objectives?

5.1. 5.1. Retained policy measures

5.2. 5.2. Identification of possible policy packages

5.3. 5.3. Identification of a list of market access policy options

5.4. 5.4. Identification of a list of terminal access policy options

6. 6. What are the impacts of the different policy options and who will be affected?

6.1. 6.1. Impacts of policy options to address excessive administration costs of entry and market access problems

6.1.1. 6.1.1. Economic impacts

6.1.2. 6.1.2. Environmental impacts

6.1.3. 6.1.3. Social impacts

6.2. 6.2. I mpacts of policy options to address terminal access problems

6.2.1. 6.2.1. Economic impacts

6.2.2. 6.2.2. Environmental impacts

6.2.3. 6.2.3. Social impacts

7. 7. How do the options compare?

7.1. 7.1. Effectiveness and efficiency

7.2. 7.2. Coherence

7.3. 7.3. Proportionality of the preferred option

7.4. 7.4. Conclusion of the comparison of options and combined effects

8. 8. How would actual impacts be monitored and evaluated?

Annex 1: Procedural information concerning the process to prepare the impact assessment report and the related initiative. Annex 1: Procedural information concerning the process to prepare the impact assessment report and the related initiative. 80

Annex 2: Stakeholder consultation synopsis report. Annex 2: Stakeholder consultation synopsis report. 89

Annex 3: Who is affected by the initiative and how? Annex 3: Who is affected by the initiative and how? 101

Annex 4: Analytical model used in preparing the impact assessment Annex 4: Analytical mode l used in preparing the impact assessment 102

  Scenario design, consultation process and quality assurance 105

  Main assumptions of the Baseline scenario 106

Annex 5: Description of the road initiatives – The ‘Big Picture’. Annex 5: Description of the road initiatives – The ‘Big Picture’. 122

Annex 6: Discarded policy measures Annex 6: Dis carded policy measures 128

Annex 7: Impacts of liberalisation on PSOs Annex 7: Impacts of liberalisation on PSOs 135

Annex 8: CASE STUDIES Annex 8: CASE STUDIES 137

Glossary of definitions, acronyms and abbreviations

1.Introduction

This impact assessment (IA) accompanies a legislative proposal that revises Regulation (EC) No 1073/2009 of the European Parliament and of the Council on common rules for access to the international market for coach services, and amending Regulation (EC) No 561/2006 1  (hereinafter “the Regulation”).

The Regulation forms part of a common EU legal framework for efficient, fair and sustainable road transport. Within the framework the Regulation is closely related to the legislation on access to the occupation of road transport operator 2 and social rules for road transport operators (the Driving Time Regulation 3 , Road Transport Working Time Directive 4 , the Enforcement Directive 5 , and the Tachograph Regulation 6 ) which together set the legal framework for road passenger transport operators to operate in the EU.

This initiative is part of a broader review of the existing legislation applying to road transport. The objective of the review is to update and improve the existing legislation so that it continues to achieve its objectives without undue burdens. Together, these initiatives consider a range of different options, with mutually reinforcing measures, which ultimately should improve the efficiency, fairness and sustainability of road transport. For road passenger transport operations the interaction of this initiative and initiatives on access to the occupation, social rules and the Eurovignette 7 are closely linked. This package is further described in Annex 5.

This impact assessment concerns a new REFIT initiative (regulatory fitness and performance revision) of current law 8 that aims to simplify and reduce regulatory costs while maintaining benefits.

2.What is the problem and why is it a problem?

2.1.Policy Context

This initiative is closely linked with the Communication of the Commission of 31 May, 'Europe on the Move' 9 , which aims to make transport cleaner, more connected and competitive. Bus and coach services have the possibility of contributing to all these objectives by providing better services to citizens

The internal market is not yet complete and barriers remain, notably in the area of services. The integration of the European Union (EU) transport market remains low in comparison to other parts of the economy and a genuine EU-wide internal market exists only in air transport, while other transport modes, including road, suffer from different degrees of fragmentation along national borders.

The White Paper 10 on transport policy adopted on 28 March 2011 (hereinafter “the 2011 White Paper”) sets out the Commission’s vision for a competitive and sustainable transport system and reiterates the continuing importance of our ultimate aim, to pursue a single European transport area and remove competitive distortions. This will help the EU transport policy remains the creation of a single European transport area, to help the EU stay competitive by optimising the performance of the entire transport sector for the benefit of all while safeguarding safety, security and the environment. It acknowledges that curbing mobility is not an option and that new transport patterns must emerge, according to which greater numbers of travellers are carried jointly to their destination by the most efficient (combination of) modes.

In the 1990s, the internal market for bus and coach services was created by two separate pieces of legislation, namely Council Regulation (EEC) No 684/92 on common rules for the international carriage of passengers by coach and bus 11 and Council Regulation (EC) No 12/98 laying down the conditions under which non-resident carriers may operate national road passenger transport services within a Member State 12 . These Regulations were consolidated by the Regulation which provides the conditions for the international carriage of passengers by coach and bus services within the EU by carriers for hire and reward.

The Regulation was adopted as a part of a legislative package with Regulation (EC) No 1071/2009 establishing common rules concerning the conditions to be complied with to pursue the occupation of road transport operator 13 and Regulation (EC) No 1072/2009 on common rules for access to the international road haulage market 14 . Together, these three regulations establish the conditions for accessing the profession and for accessing the markets for transport of goods and people by road and aim to support the completion of the internal market in road transport, its efficiency and competitiveness.

The scope of the Regulation covers the international carriage of passengers by coach and bus within the EU by carriers for hire and reward in possession of a Community licence or by own-account carriers established in a Member State.

The regulation provides for the opening of the markets for the following services:

Table 21: International carriage of passengers

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

The Regulation lays down the provisions to be complied with by undertakings that wish to operate on the international road passenger transport market and on national markets other than their own (known as cabotage operations).

Table 22: Cabotage Operations

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

It includes provisions related to the documents to be issued to such carriers by the Member State of registration (Community licence) and by the authorising authority (Authorisation for a regular service). It sets down provisions regarding the sanctioning of infringements and cooperation between Member States in that context.

The Regulation has the following general objectives:

·To promote coach transport as a sustainable alternative to individual car transport.

·To open the market for international services and for cabotage operations without undermining public service obligations;

·To prevent discrimination on grounds of nationality or place of establishment; and

·To limit the administrative burden to the extent possible

No rules have been adopted so far at EU level as regards access to the national markets for regular services by coach and bus (except cabotage operations which are part of an international service) and therefore the operation of national services is otherwise subject to the laws, regulations or administrative provisions of the Member States.

This initiative should be seen as complementary to several parallel initiatives in the review of road transport legislation as part of the mobility package. Market and social issues in the road passenger transport sector are likely to become more interdependent because market opening tends to increase competitive pressure on operators and their mobile workers. Addressing these issues requires a holistic approach whereby the social, internal market and posting of workers' rules are considered together to ensure both fair working conditions for drivers and fair competition between operators. It is also closely linked with the road charging initiatives which propose to include coaches in the Eurovignette Directive and contribute to a level playing field in particular with rail. Therefore, this initiative on access to the coach market is part of a co-ordinated response to both the social and market challenges faced.

This initiative is in particular complementary to the on-going revision of the Posting of Workers Directive 96/71/EC 15 (PWD), which aims to clarify and update the provisions adopted more than twenty years ago and to ensure that the Directive still strikes the right balance between the need to promote the freedom to provide services and the need to protect the rights of posted workers. The PWD revision deals with general issues, such as broader set of remuneration rules or maximum periods of posting to be applied to all sectors. This initiative is also complementary to the specific rules proposed by the Commission on 31 May 2017 16 for the application of posting rules to workers in road transport. This proposal addresses the risks of inadequate working conditions for drivers, including terms and conditions of employment, and at the same time mitigating the excessive regulatory burdens on operators and preventing distortions of competition. The overarching goal is to ensure a balance between adequate working conditions for drivers and freedom to provide cross-border services for operators.

2.2.    Market Context

The international and national markets for inter-urban regular coach services play an important role in passenger transport. Coach is an economical, efficient and sustainable 17 mode of transport which can contribute to reducing emissions from transport and to improving accessibility for citizens on low income or living in isolated and low population density regions with no rail services.

In 2014, the bus and coach transport activity (expressed in passenger-kilometre) represented 8.0% of passenger transport and 8.8% of land passenger transport within the EU 18 .

Table 23: Modal split of passenger transport 2014 19

Source: Statistical Pocketbook 2016 EU Transport in figures

Although the sector’s share of the land passenger transport market has grown by 0.4% since 2009, these high level statistics do not accurately describe the different types of coach and bus services within the scope of the Regulation. The scope, quality and availability of data vary widely across Member States. There are inconsistencies across Member States in the definition of services (regular, international regular, special regular and occasional) and the distinction between bus (usually urban) and coach services (usually inter-urban). Vehicle-kilometres and passenger-kilometres (pkm) are reported in different and mutually inconsistent ways by different Member States. The statistics available at the European and Member State levels frequently refer to all bus and coach services together. While some statistics are available at an aggregate level (and usually conflate both bus and coach operations) there are few statistics available for sub-sections of the market, e.g. medium or long distance coach services.

As shown in table 2-4, 14 Member States have some competition on the market for regular services accounting for an estimated 278 billion pkm. However, these Member States often still restrict the scope of inter-urban coach services by reference to a geographical market definition or a distance threshold; or by withholding permission to operate following an analysis of the impact of the proposed service on established operators; or by requiring operators to establish locally; or in some cases they rely on services provided under public service contracts 20 (PSC) to supplement commerically operated networks and protect these PSCs from competition. These will be described further in section 2.5.1. Moreover, as desbribed in section 2.3, restrictions in a broader sense can be exacerbated by discrimination in access to bus and coach terminals (see section 2.3).

There are a further 7 Member States with periodic tendering of concessions (competition for the market) accounting for 71 billion pkm and 7 Member States continue to limit competition considerably representing 30 billion pkm.

Table 24: National market size and market liberalisation in the EU

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave.

The international market for regular services is small compared to the domestic market but it appears to be growing. It is estimated that international regular service passenger numbers grew by 40-60% and international coach pkm 21 grew by between 0-40%, between 2009 and 2014 22 . The domestic market in 2014 is broadly similar, and possibly slightly larger, than the market in 2009. The data suggests that the average international coach trip is getting shorter. It is estimated that there are several tens of millions of passengers per year travelling, on average several hundred kilometres each. This stronger growth in international markets relative to the overall market suggests that operators have responded to opportunities provided by international liberalisation.

In 2013 there were 43,352 enterprises operating bus and coach services in both national and international markets (not including urban or suburban services) with 497,800 employees 23 .

Many coach brands are a marketing alliance or partnership, managed by one operator and operated by several companies or by subcontractors. Many coach companies are domestic subsidiaries of foreign owning groups, and the ultimate ownership of individual coach operators may depend on mergers and acquisitions activity among a more limited number of parent companies including rail companies (e.g. Deutsche Bahn AG and SNCF) and major transport groups (e.g. Arriva and National Express).

Coach operators can add and remove routes relatively easily, allowing them to enter markets on a trial basis, or to modify services rapidly as markets change. The provision of the services, and their relative success, will generally depend on the characteristics of the competing modes. International coach services and networks are dynamic, with competition sometimes leading to price wars and subsequent withdrawal of one or more operators.

2.3.    Evaluation of the Regulation

The ex-post evaluation of the Regulation which was carried out from 2015 to 2017 24 concluded that the Regulation has contributed to the establishment of a more coherent framework for international services by coach and bus, including cabotage operations. The opening of the international market for regular services has resulted in improvements in the level of service with growth in the number of operators, numbers of passengers and the number of services in the EU. There was substantial growth in certain Member States, notably Czech Republic, Estonia and Poland, over the period 2009-2014 and the only Member State with data available that reported a decrease over this period was Slovenia. However, it has proved difficult to find evidence that directly links increase in activity to the introduction of the Regulation and some of the evidence is largely anecdotal and insufficient to demonstrate a causal relationship. There is conclusive evidence that the liberalisation of national markets by MSs in combination with the liberalisation of international services by the Regulation created a favourable environment for the expansion of coach services at national and international level. The opening of national markets for regular services in countries such as Italy, Germany and France that followed the liberalisation of international services triggered the expansion of some transport operators and enhanced the provision of new international services. It appears that once a national market for regular service is established, operators tend to exploit their national position through offering services to neighbouring countries.

The available evidence indicates that the Regulation has not had any discernible effect on the volume of employment. No conclusion could be drawn regarding the evolution of the working conditions of drivers.

Despite its achievements, the inter-urban coach and bus sector has failed to grow at a rate comparable to that of other transport modes and its modal share has continued to decline over an extended period. There are different explanations to this but very importantly, as described below; it appears that international services, without competitive inter-urban services, constitute less appealing service offerings to users.

The evaluation has shown that the intended modal shift from passenger car to coach and bus services didn’t materialise to the anticipated extent. The anticipated impact was a more sustainable modal mix in passenger transport. The aim was to promote passenger transport sustainability by shifting traffic volumes away from car. These expectations were largely based on an over-optimistic assumption that the promotion of bus alone would change passengers' modal choices. In fact, the coach sector has failed to grow at a rate comparable to that of passenger cars and its passenger transport share continued to decline over an extended period. However, the problems of pollution, congestion and road safety that should have been addressed by the original objective of promoting coach and bus services as a sustainable alternative to individual car transport) still exist and remain valid. Furthermore, the evaluation identified the lack of an attractive mix of affordable alternative transport modes for citizens as a new and – at least - equally urgent challenge.

The original Regulation did not aim at integrating national markets for regular services. However, the latter are recognised in the evaluation as a critical factor in the provision of international services. The evolution of the market, in terms of different and divergent rules on access to national markets in Member States, is a problem that was not previously apparent or considered when the intervention was designed. This patchwork of regulatory systems in the EU makes it difficult for carriers to exploit the full potential of operating in an Internal Market, impedes integration and undermines the efficiency of coach and bus services.

The scope of the objectives of the original Regulation did not cover the problem of discrimination in access to terminals. Yet, without non-discriminatory access to terminals, bus and coach operators are forced to stop at the road-side, which diminishes the quality of service provided to users. Moreover, terminals serve a vital role acting as a hub in a network enabling passengers to change coach or acting as a multimodal hub enabling passengers to transfer to another collective mode of transport. The evaluation found evidence of discriminatory access to terminals in Austria, Czech Republic, France, Croatia and the UK which distorts service patterns and limits the possibility of operators to adapt services to passenger demand. The accessibility to terminals as well as the extent to which the terminals are linked to other modes of transport is particularly important for international regular services.

2.4.Problem definition

Following the ex-post evaluation, further Commission work and stakeholder consultations, two main problems were identified. The main problems are:

·operators are facing obstacles in national markets to develop inter-urban coach services, and

·the low modal share of sustainable transport modes 25 .

The effects of these problems for citizens are described in figure 2-1. In non-liberalised markets this contributes to the transport disadvantage of certain groups of citizens. Furthermore citizens in general are faced with a lack of connectivity and non–integrated services. In particular, the ability of citizens in disadvantaged regions that are more sensitive to the price of transport, and to purchase end-to-end tickets from a competitive pan-European operator could substantially improve their access to employment, education and leisure opportunities.

The evaluation concluded that operators are faced with a wide range of restrictions on access to national inter-urban markets even in Member States that have introduced different forms of market liberalisation. The date of most recent liberalisation relating to national markets for regular services varies widely, from 1980 in the UK to 2015 in France. Partly as a consequence, both the type of services which have been liberalised and the extent of the liberalisation vary widely between Member States. For example:

·Some create a number of regional concessions competitively, with exclusive rights to operate services (e.g. Spain).

·Some permit commercial operations, subject to rules designed to protect PSC’s (e.g. France)

·Some permit commercial operations carrying passengers beyond a minimum distance (e.g. United Kingdom).

·Some delegate responsibility to regional, county or municipal authorities (e.g. Germany).

 Figure 21: Problem Tree

In these liberalised national markets, restrictions therefore include inter alia the prohibition of services below a certain distance threshold or prohibition of cabotage services or withholding permission to operate due to negative impacts on established operators. Operators encounter additional problems due to the excessive time taken to grant or refuse an authorisation following a procedure with little or no transparency. Some Member States continue to require that operators establish locally forcing them to adopt different business models to overcome this restriction.

In the 14 Member States with non-liberalised markets (see table 2-4) there are a wide range of restrictions on access to markets for inter-urban services. These restrictions originated from a variety of different sources including Member States protecting rail, protecting incumbent operators, protecting PSC’s, or putting in place market access arrangements that are considered to better reflect the local circumstances. This means that barriers to market entry exist at a number of levels, ranging from tight national control of services, through regional awards of concessions with exclusive rights (whether directly awarded or competitively tendered), to local requirements for, or prohibitions on, stopping in particular locations.

The number and diversity of regulatory frameworks and authorising procedures across the EU imposes excessive administrative costs on operators seeking to provide regular services in more than one domestic market. Furthermore the range of authorising procedures deters coach operators from providing international services as in reality national and international are interlinked and in turn integrated with other modes of transport.

Discrimination in access to terminals is a common problem across the EU. A review of a number of cases investigated by competition authorities in different Member States provided information on whether the actions of particular transport and terminal operators were anti-competitive 26 . These cases demonstrate the variety of different problems and their impacts on the services provided by competing coach operators including:

·Refusal to grant access to competitive terms can prevent a competitor from introducing a new service on a given route;

·A decision by a terminal owner to also access to a single preferred supplier can have the effect of displacing even an established competitor;

·A decision by incumbent coach operator to vacate a terminal in favour of a new facility can have the effect of undermining the services of competitors who remain.

They also demonstrate that reaching a decision in a case involving abuse of a dominant position and anti-competitive behaviour can take several years.

Coach services have the potential to provide transport opportunities that match the needs of these disadvantaged groups of citizens, typically without passenger cars, as it can offer low fares and a large network of services.

In 2014 passenger cars accounted for 83.4 % of inland passenger transport whilst the more sustainable collective modes of transport (train, coach, bus, metro and tram) accounted for only 16.7%. Over the period 2004 to 2014 the relative importance of the use of passenger cars was quite stable, with its share always within the range of 83% to 83.7%. This indicates that the more sustainable collective transport modes have not been able to reduce the relative importance of the use of passenger cars.

The decline in the modal share of coach services has to be seen in the context of the very wide potential for such services. The potential for the development of the network of coach services is linked to the density of the road network in the EU. The greater density of the road network should enable coach operators to develop more extensive and complex networks, to provide services to more cities, and to provide more services to rural areas that are not served by, or accessible to rail, air or maritime transport. Figure 2-2 illustrates that the road density in each MS is much greater than that of the rail network.

Figure 22: Density of the total road (km road/km2 land area) and rail (km rail/km2 land area) networks 27

Source: Adapted from Statistical Pocketbook 2016 EU Transport in figures

Expansion of the network of coach services could improve the connectivity of disadvantaged regions and supplement existing bus and rail networks. Figure 2-3 shows the GDP (Gross Domestic Product) per capita (measured by purchasing power rates) in NUTS-2 28 regions across the EU, with locations served by Flixbus’s network overlaid. Since commencing the expansion of its network beyond its home Member State (Germany) in 2015 Flixbus has developed one of Europe’s largest long-distance coach and bus networks. The figure shows that the expansion has been heavily concentrated in recently liberalised markets (France and Italy) that served as the stepping stone for the uptake of bus and coach services both at national and international level. It also clearly shows that network expansion has been constrained significantly, in countries such as Greece and Spain where national markets are still closed despite the presence of well-established industries in tourism expected to generate significant levels of coach traffic.

However it also shows that currently, there are relatively few locations in disadvantaged NUTS-2 regions with GDP per capita of less than €20,000 (e.g. in Poland, the Slovak Republic, Hungary, Romania and Bulgaria) covered by the network of coach services. This suggests that an expansion of the network to the east could improve the connectivity of several more disadvantages NUTS-2 regions and supplement existing bus and rail networks even in Member States with liberalised markets (e.g. in Poland, the Slovak Republic, Romania and Bulgaria). As described above, better and more integrated service offerings to users from disadvantaged regions via the possibility to purchase end-to-end tickets could substantially improve their access to employment, education and leisure opportunities.

Figure 23 GDP per capita by NUTS-2 region and the Flixbus network

Source: Comprehensive study on passenger transport by coach, Steer Davies Gleave, April 2016.

The Special Eurobarometer Report on Coach Services 29 (hereinafter “the Eurobarometer Report”) survey indicates that the pricing of coach services is an important factor in the mode-choice of both non-users and economically disadvantaged users. More specifically, the socio-demographic breakdown shows a notable difference between the average non-user and non-users from disadvantaged groups. For example, on average 26% of respondents would be more likely to use coach services if fares were lower. This increases to 35% of people with difficulty paying bills most of the time, 31% who have difficulty paying bills from time to time, 36% of respondents still studying and 34% of respondents aged 15-24.

Restrictions to the provision of inter-urban coach services in national markets seem to lead to low service quality and higher fares. Table 2-5 describes the impacts on inter-urban coach services in Member States that have recently liberalised their markets to promote travel by coach. The results demonstrate that fares can be as much as 20% more expensive on routes where the provision of coach services is restricted than on routes where there is competition. It also demonstrates that service quality was lower, the number and frequency of services was lower, the size of the route network was smaller (with less accessibility), and less on-board services were provided e.g. less provision of Wi-Fi.

Table 25: Impact of liberalisation on fares and service quality

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

In principle, the benefits of opening access described above serve to demonstrate the benefits foregone in Member States in which there is little or no competition between operators. The evidence on the effects of competition to date, coupled with the demonstrable restrictions on market access in many Member States, suggest there is considerable scope for improving the competitiveness of the sector from the perspective of passengers. Greater competition within national markets would result in lower and more innovative fares, more efficient promotion of coach and bus regular services.

The 2011 White Paper calls for greater integration of modal networks to provide passengers with better modal choice. Passengers are less likely to use coach services if they do not connect with other coach services or sustainable modes of transport or if the connections provided are not convenient. The range of facilities (such as well-signed interchanges, and relevant and accessible passenger information) and onward connectivity which the majority of coach terminals provide makes them particularly attractive, and important, for passengers.

Consequences of problems

Situations of transport disadvantage, or low levels of accessibility, occur when there is little or no access to public transport or other transport modes, which restricts mobility and access to employment, education and leisure opportunities. This, in addition, disproportionately impacts on certain disadvantaged groups 35 of citizens.

Similarly to inter-urban services, there is evidence that the accessibility to long distance services is associated with income levels 36 . In other words, citizens with high levels of income generally have access to much improved mobility services.

The lack of inter-urban mobility for economically disadvantaged groups is a problem because these citizens may not be able to participate in key activities such as education, job, visiting family and friends, healthcare and in general suffer social exclusion.

2.5.What are the problem drivers?

As indicated in the problem tree, figure 2.1, there are three underlying problem drivers affecting the two main problems of operators’ facing obstacles in national markets to develop inter-urban coach services, and a persistent low modal share of sustainable passenger transport modes.

2.5.1.Problem driver 1: Restricted access to national inter-urban markets

The regulatory frameworks for national coach services vary widely between the Member States. In some cases access to markets is directly restricted through the award of contracts to monopoly service providers. This both eliminates the scope for competition on individual routes and substantially hinders the development of international commercial services and networks. For example, in Greece contracts are awarded directly to operators within KTEL, a jointly funded group of companies and in Spain contracts are competitively tendered, with operators only periodically being subjected to competitive discipline. Restrictions may also stem from interactions with rail services, which Member States in certain cases protect as these are considered to be more environmental friendly.

As shown in table 2-4 above, there are 14 Member States who limit competition on their markets accounting for in excess of 100 billion pkm. These Member States can exclude operators entirely from potential markets or award PSCs which favour incumbent operators and prevent potential new entrants from competing on equal terms (e.g. Austria, Belgium, Greece and Spain). By definition, the award of monopoly contracts effectively eliminates the scope for competition on individual routes. It can also substantially constrain the development of international networks. Even where contracts are subject to competitive procurement, the cost and uncertainty of mounting a bid to operate an entire route network will discourage potential market entrants who would otherwise have tested commercial opportunities through more limited market entry. The length of concession contracts also limits the opportunities for new entry.

As mentioned above restrictions also occur on liberalised national markets including: a prohibition of services below a certain distance threshold (e.g. France and Germany); withholding permission to operate following an analysis of the impact of the proposed service on an established operator (e.g. Ireland and Estonia); and prohibitions on certain types of services, for example cabotage operations, in Latvia. The application of these different approaches to protect PSCs makes it difficult for operators to plan new services.

Restrictions on market entry can be exacerbated through the process of awarding PSC’s, which may favour incumbent operators and prevent potential new entrants from competing on equal terms.

Limiting the number of bidders in this way may mean that new operators are prevented from extending their networks even where they are prepared to operate services under PSC and meet contractual requirements defined by regional and local authorities.

Member States that have liberalised national regular services always continue to require that operators establish locally and have not taken the opportunity to decide that the Community licence shall be valid for national transport operations under the provisions of Regulation 1073/2009. This forces operators to adopt different business models to overcome this restriction. The business models include contracting services to local operators and establishing subsidiaries. Operators have confirmed that the costs of circumventing local establishment requirements can be significant, even for large operators. The biggest perceived negative impact of the requirement to establish locally is the associated administrative costs for the carrier. 81% of the 36 carriers that responded to the open public consultation (OPC) identified these costs as having a negative impact.

Public Service Contracts

Some public passenger transport services that society needs as part of its general interest cannot be run commercially, so the competent national, regional or local EU authorities must be able to make certain they are provided. Competent authorities can do this:

·by awarding exclusive rights to operators running public services, compensating them financially. This usually takes the form of bundling profitable and non-profitable routes together so that the profitable routes cross-subsidise the non-profitable routes, and also

·by defining rules (i.e. public service obligations) for how public transport should be operated. For instance, public subsidies can be granted for the provision of transportation services, particularly for low-density routes, usually connecting rural areas. Such subsidies can be granted both to railway and coach services. As a reference, the total amount of subsidies granted for the compensation of railways PSOs in the European Union in 2015 amounted to EUR 20 billion.

Article 14 of the Treaty on the Functioning of the European Union (TFEU) and Protocol No 26 on services of general interest annexed to the TFEU sets out the general principles of how Member States define and provide services of general economic interest. The EU has developed legislation to avoid disparities between Member States in the procedures and conditions they apply to the execution of public service obligations.

Evidence from a previous study 37 indicates that there is little consistency across Member States in terms of the size of the area of competence of the competent authorities which organise public transport and PSCs. In smaller or island Member States the authorities tend to be national, whilst in many Member State there can be a large number of authorities. Some states have authorities in charge of transport at a regional level, including Belgium, Germany, Czech Republic, Denmark, Croatia, Italy, Spain, Slovakia and Sweden. There is nothing to prevent authorities of national competence to manage many distinct contracts. However, in the case of Ireland, Cyprus and Malta, there are only a limited number of public service contracts in use.

The opening of access to the national market for regular services would enable operators to provide new services which, if attractive, will both:

·provide welfare benefits to new passengers who would not otherwise have travelled; and

·take passengers from existing services, reducing the revenues of existing operators and incentivising them, where possible, to improve quality and lower fares, reduce costs, or cut services.

Where new services effect existing services provided under a PSC, Member States and competent authorities are likely to be concerned if the first effect “generation” (of revenues through newly generated demand for bus and coach services) is small compared to the second effect “abstraction” (of revenues from existing operators).

Currently there are a number of different approaches to protecting PSC’s based on restricting or limiting new entry. These are:

·Regulation 1073/2009 requires that international coach services be authorised except on the basis of detailed analysis of their effect on one or more PSC’s.

·Regulation 1370/2009 permits exclusive rights to protect any PSO provided by in particular any land transport mode.

·Directive 2012/34 as amended Directive 2016/2370 requires that international and domestic rail services may be limited to protect the economic equilibrium of a PSC applicable to the same or an alternative route.

Each of the options described in section 5 dealing with PSCs will continue to provide Member States with the capability to protect PSCs whilst also providing carriers with transparency together with clear, simple and rapid procedures to address demand.

2.5.2.Problem driver 2: Excessive administrative costs of entry

We have identified extensive evidence that administrative costs incurred by operators can be material and that administrative processes can delay entry. It is also clear that the requirements for the authorisation of national and international regular services can vary significantly by Member State.

Operators face excessive costs of entry in national and international markets due to national and local authorisation procedures and requirements including in the case of applications to operate international services under the Regulation.

Coach operators who carry out international occasional services, such as group tours to holiday destinations, require a journey form. The journey form holds information about the type of transport on the one hand and about destination, route and passengers on the other hand. The journey form generates an unnecessary administrative burden for operators.

The estimated administrative burden of market entry for authorisation and journey form are provided in the table below:

Table 26: Estimates of the administrative costs of market entry

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

Some Member States have taken action to reduce the administrative burden. For example, the abolition of the use of journey forms in Nordic Member States. Operators or national authorities do not record the administrative cost systematically but there is extensive evidence that the costs incurred can be material and that administrative processes can delay entry for operators.

2.5.3.Problem driver 3: Restricted access to key infrastructure 

Terminals provide connectivity to the network of coach services and serve as a place of interchange between coach services. They also act as an interface between the network of coach services and urban, rail, air or maritime networks. The provision of terminals in the EU is variable. Some Member States appear to expect or require the competent national, regional or local authorities to provide terminals whilst others have no systematic provision of terminals. There are several models of terminal ownership across the EU including ownership by national, regional and local government, by operators, by the railway infrastructure manager, by airports, privately and by other parties. In some Member States the terminal ownership is irrelevant, because the coach market is highly restricted or regulated and new coach services are not allowed to compete with existing services or operators are not permitted to operate domestic regular services.

The success of inter-urban services depends largely on the extent to which they connect with other modes of transport and the convenience of the connections provided. Access to terminals is a factor that limits competition in the market. There is evidence (collected during two 2016 studies 39 , 40 ) that carriers face restrictions in access to key infrastructure are common and widespread with instances identified in 14 Member States 41 . The issue of equal access to terminals was investigated further during the targeted consultation exercise as there is a particular risk that access to terminals may be a barrier to entry if the company that manages the terminal is vertically integrated with one of the coach operators. Where the terminal operator is independent of the coach operator, it is more likely that they will treat operators equally, although this is not guaranteed and they may still face incentives to protect the largest operator. The evidence indicates that restrictions on terminal access are widespread and that they can materially impact on services.

Due to the decline in the coach market over an extended period the amount of terminal capacity has increased particularly in central and eastern European States, where rapidly increasing car ownership has reduced the demand for long distance coach travel.

However, there are still issues with access to terminals in other Member States. Experience in Germany, following liberalisation of the market for regular services, suggests that terminal access may become a problem after market opening when a rapid expansion of services puts pressure on available resources. A key issue is, where there are capacity restrictions, how is it decided to distribute slots between operators. This is not always transparent, and coach operators have been refused access to terminals on the basis of capacity restrictions which were very unclear. The following table provides a summary of some of the issues raised by stakeholders including operators, regulators and ministries:

Table 27: Examples of restrictions on terminal access

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

There is considerable evidence 42 that discrimination is a common problem in the EU and occurs where terminal facilities are both privately and publicly owned. Discriminatory behaviour in relation to privately owned terminals is more difficult to challenge from a policy perspective, since the business case underpinning private sector investment may depend on a single operator having exclusive use of the available capacity. Regulations having the effect of providing a right of access to third parties whether set at the European Union or national level could therefore have the effect of discouraging such investment. For this reason, concerns about discrimination relating to privately owned terminals are arguably better addressed through competition policy, whereby the relevant authorities can assess the merits of particular actions on the part of terminal owners’ case-by-case.

By contrast, discriminatory behaviour by the operators of publicly owned terminals is more difficult to justify, since the underlying investment is more usually driven by recognition of the importance of providing appropriate facilities to support good quality public transport services within a country, region or city. Moreover, public terminal facilities are often provided to ensure that passengers can interchange between transport modes, an important consideration in the planning of many coach services.

The cases above, amongst others, demonstrate a variety of impacts that discriminatory behaviour can have on carriers including: refusal to grant access on competitive terms can prevent a competitor from introducing a new service on a given route; a decision by a terminal owner to allow access to a single preferred supplier can have the effect of displacing even an established competitor; and a decision by an incumbent bus and coach operator to vacate a terminal in favour of a new facility can have the effect of undermining the services of competitors who remain. They also demonstrate that in the absence of applicable rules the time taken to reach a decision on cases involving abuse of a dominant position and anti-competitive behaviour can take a number of years, particularly if challenged in court.

In addition to the evidence gathered during the targeted consultation indicating that the restrictions are widespread and that they have a material impact on the services provided to operators and passengers, operators also reported that the various different structures of ownership and the regulation of terminals across Member States make it difficult for them and cause an unnecessary administrative burden. They find it difficult determine who to contact, how capacity will be allocated, and how they will be charged by the terminal operators across Member States.

Finally, there are two other root causes to the driver of restricted access to key transport infrastructure: constrained terminal capacity; and restrictions on access to city centre locations. At this stage, the Commission is not proposing to address these issues as the question to what extent it is competent to do so first needs to be clarified. Transport is a shared competence between the Union and the Member States and subsidiarity considerations may come to play here. The Commission has launched a study on urban vehicle access restrictions (which should be available in autumn 2017) and, based on its results, it will assess whether it is necessary to propose measures in this area or not.

2.6.Who is affected by the problem, in what ways, and to what extent? 

The excessive administrative costs, restricted access to national inter-urban markets and restricted access to key transport infrastructure have a direct or indirect impact on the following stakeholders:    

Citizens / passengers: face an inferior offer of services in terms of availability, cost, quality and reliability. Regular services are not always adapted to meet passenger demand. They are not fully benefiting from the affordable mobility offered by inter-urban bus and coach services; in particular those who suffer transport disadvantage suffer disproportionately and are more likely to experience reduced mobility. They are unable to purchase end-to-end tickets to improve their access to employment, education and leisure opportunities across the EU. Where coach and bus services are not available citizens are also affected by worse air quality due to the on average higher emissions from other inter-city passenger transport modes (except electric rail) and in particular from car.

Road passenger transport operators: new entrants face a patchwork of regulatory requirements including restrictions or prohibitions on market entry and lose business opportunities. Incumbent operators remain protected and gain business opportunities with little or no incentive to innovate.

Terminal operators: may continue to provide specific carriers with discriminatory access giving them a competitive advantage on certain services, preventing effective competition between carriers and constraining the development of an integrated coach network.

Road passenger transport workers: have a key interest in working conditions, pay and employment conditions, health and safety in the workplace, training and professional careers.

Public authorities – the problems affect the manner in which national competent authorities interact with road passenger transport undertakings and terminal operators. The problems also affect how public authorities provide for inter-urban passenger transport e.g. commercially or in the general economic interest through PSCs.

2.7.What is the EU dimension of the problem? 

One of the Europeans Unions main transport policy objectives is to improve travel possibilities across Europe and ensuring high-quality transport services for its citizens. In that context one of the primary objectives of Regulation 1073/2009 is to increase the level of performance of international coach and bus services. There is evidence 43 that the opening of national markets for regular services by coach and bus has created a critical mass of operators who also introduce international services, resulting in a greater impact on the number of international routes and service frequencies than pan-European legislation alone. This suggests that further opening of national markets would strengthen the development of the international market for regular services, quite apart from any benefits for passengers making national journeys.

The problem drivers mentioned in the previous section are mainly due to the possibility of Member States to adopt their own rules and restrictions with regard to access to their national market for regular services. The different national approaches and the restrictions in access to terminals constitute a barrier to the free movement of services in the field of transport which is one of the goals of the Common Transport Policy. This affects the effectiveness of the Internal Market in the field of passenger transport by road.

Carriers have been unable to compete fully in national inter-urban transport markets. This has limited the sectors ability to grow market share relative to other modes. It has prevented the development of a fully integrated market for inter-urban travel by bus and coach, resulting in poor connectivity from some citizens, particularly those with limited access to a private car or rail services. EU citizens have access to a poorer (in terms of accessibility, frequency, price, comfort) than optimal mobility offer which affects the free movement of persons in the EU. Indeed, while national restrictions on paper only affect domestic transport, in reality domestic and cross-border connections are interlinked and in turn integrated with other modes of transport to collectively constitute the available passenger mobility offer inside the EU. Hence restrictions on domestic coach services and access to terminals have far reaching consequences on the functioning of the passenger transport sector in the whole EU and across all transport modes.

In the absence of harmonised rules at EU level, carriers operating in the EU regular services are faced with excessive administrative costs of entry, a patchwork of access rules and in discrimination in access to terminals. Simplifying administrative procedures, removing restrictions on access to inter-urban markets through a harmonised legal framework across the EU and preventing discriminatory access to public terminals would contribute to solving the issues identified and facilitate inter-urban mobility for all citizens by promoting coach travel.

2.8.How would the problem evolve, all things being equal? 

This section analyses how the problem would evolve, assuming the continuation of existing policies and the implementation of already planned policy reforms. There is no indication that Member States will introduce changes to existing provisions. However, Member States will have witnessed the increase in passengers carried, total passenger km, employment levels and the density of the network of coach services along with lower fare prices in recently liberalised markets for national regular services (e.g. France, Germany, Italy and Poland). In the absence of EU action some Member States may be prompted to liberalise their markets according to different principles to improve efficiency.

In the absence of further EU action, Member States may continue to maintain restrictions on market and route access or excessive requirements e.g. the requirement of local establishment. All things being equal and in the absence of any further liberalisation measures at the EU or national level, it is estimated that by 2035, around 26% of the market (equivalent to 108 billion pkm) will be subject to restricted access due to reliance on concessions or direct restrictions on market access. There will also be restrictions to market access for new entrants in the remaining 74% of the market that has to some extent liberalised but continue to impose various restrictions, for example in order to protect public services operated under PSCs.

The network of coach services will not expand and develop as operators will continue failing to penetrate into restricted markets. There will continue to be a clear distinction between international regular services and national regular services for inter-urban travel.

In restricted markets service frequencies are likely to continue to be low and passengers will continue to have a poor choice of combinations of fares and service quality. Citizens who are sensitive to the price of transport or who live in areas where restricted markets have blocked the penetration of the network of coach services will suffer disproportionately. They are more likely to experience reduced mobility; this is especially the case for those with little or no access to other modes. The reduction in mobility hampers their access to employment, education and leisure opportunities.

There are other potential developments described in table 2-8 which could have significant implications for coach travel. It is difficult to quantify the impacts of these developments on the bus and coach sector with any confidence, since their effect depends on a wide range of uncertain factors such as economic conditions across Europe, the extent of cost changes driven by new technology, changing attitudes to the application of technology among both the travelling public and transport employees, and policy responses at the local, regional, national and European level. The table below provides commentary on possible implications for bus and coach services should the technological development be implemented.

Table 28 - Possible impacts of new technology on the bus and coach sector

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

The developments under current trends and adopted policies (i.e. baseline scenario) in inter-urban coach transport activity, energy use and CO2 emissions, as well as revenues and employment in the sector by 2030 are shown in the table below, assuming the continuation of existing policies. The development of the baseline scenario 44 is described in detail in Annex 4 "Analytical models used in preparing the impact assessment", together with the underlying assumptions.

Table 29: Baseline projections for inter-urban coach transport to 2030

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

It is estimated that continued discriminatory behaviour in relation to terminal access could unduly constrain terminal capacity supporting some 1.5 billion vehicle kilometres and could result in the suppression of around 400 million vehicle kilometres.

As mention in Section 2.5.2, the administrative costs incurred by operators can be material and administrative processes can delay entry. It is clear that even the requirements for authorisation of international services vary significantly by Member State and nothing indicates this will change. It is estimated that the total administrative costs on the coach sector is €884 million in 2015 (with 2/3 falling on operators and 1/3 falling on government and/or regulatory bodies), rising to €1,288 million in 2030 45 .

3.Why should the EU act?

3.1.Legal Basis

The right of the EU to act in the field of transport is set out in the TFEU (Treaty on the functioning of the European Union). According to Article 4 TFEU, transport is one of the principal areas where shared competence between the Union and the Member States applies.

The competence for this initiative derives from Title VI (Transport) of the TFEU, in particular Article 91 which states, inter alia, that the European Parliament and the Council shall lay down common rules applicable to international transport to or from the territory of a Member State, or passing across the territory of one or more Member States, as well as the conditions under which non-resident carriers may operate transport services within a Member State. The applicability of Title VI to road transport is stipulated in Article 100 TFEU.

As far as public service contracts are concerned, the measures considered under different PSC options in this IA are geared towards providing flexibility to Member States. Article 14 and Protocol 26 of the Treaty confirm the place occupied by services of general economic interest in the shared values of the Union. Under Article 106(2) of the Treaty on the Functioning of the European Union (TFEU), companies that provide services that are of general economic interest are subject to the rules of the Treaties, in particular to the rules governing competition. But unlike other economic sectors, this Article does not apply when compensation is paid for public service obligations in land transport. Instead, this type of compensation is covered by Article 93 TFEU as a 'lex specialis' and is applied according to the rules of Regulation 1370/2007 on public passenger transport services by rail and by road 46 . It is not proposed to make any amendment to Regulation 1370/2007 and Member States can continue to act to ensure that services of general economic interest continue to be provided. In this respect, the initiative presented will not go further than allowed by the Treaty and will not impinge upon Member States' right to specify public service obligations underlying to PSCs.

3.2.Subsidiarity

In accordance with Article 5(3) of the Treaty on European Union (TEU) any EU action should respect the principle of subsidiarity. This involves assessing two aspects.

3.2.1.Necessity test

The necessity test assesses if the objectives of the proposed action can be sufficiently achieved by Member States. The legitimate rights of Member States to take actions which reflect their local, regional or national specificities, must not unduly restrict the proper functioning of the internal transport market.

EU transport policy has always focused on overcoming obstacles between Member States and creating a single European transport area with fair competition conditions for and between the different forms of transport. This means not only dismantling cross-border barriers but also integrating national markets in order to complete the internal market for transport.

Across the EU there is a patchwork of rules for access to national markets for coach and bus services. Carriers are required to comply with different rules in each Member State in which they operate. These rules include restrictions on access to national inter-urban markets which constrains carriers’ ability to develop services into pan-European coach networks and denies them the possibility to offer integration with other coach services and transport modes.

The past has shown that Member States action at the national or lower level (Article 25 of the Regulation enables Member States to agree bilaterally or multilaterally to further liberalise services) has not been sufficient to tackle the identified problems. Furthermore, Member States acting alone cannot introduce or ensure the coherence and coordination of uniform market access rules needed for the emergence of a genuine internal market for road passenger transport. It is therefore necessary to provide rules at the EU level.

3.2.2.EU added value test

The EU added value test assesses if the objectives of the proposed action can be better achieved at Union level.

Since the 1980s, the EU has elaborated a framework of common rules and procedures intended to open the European road transport market to competition. The approach has been consistent with the objective of developing Europe’s transport sector and the EU is best-placed to lay down common rules for the road passenger transport market that guarantees carriers access to operate throughout the EU without discrimination. The envisaged revision of the regulatory framework will streamline the national differences in market access rules and provide carriers with predictable business conditions throughout the EU, therefore removing distortions of competition and barriers to market access as well as providing the ground to strengthen the internal market.

The envisaged revision should have an immediate and strong positive impact on the level of accessibility for EU citizens some of whom will have access to an affordable mobility offer for the first time. Additionally, but over the longer term, it will have a positive impact on the external costs of transport due to the expected modal shift. The beneficial effects of the modal shift from car and air together are greater than the negative environmental impact associated with the generation of new traffic and the substitution of some rail use in favour of coach travel. The performance of coach and rail combined is improved leading to an increase in the modal share of sustainable transport modes.

The envisaged revision should lead to an increase in inter-urban travel with the benefit of not having any adverse impact on the environment. It will facilitate the mobility of citizens who otherwise could not afford to travel. It will reduce the negative externalities of inter-urban passenger transport, such as emissions, accidents and fatalities, road congestion as well as to improve the efficiency of use of transport resources.

Furthermore, the introduction of measures to ensure a level playing field in the allocation of terminal capacity should lead to an uplift in capacity that is unduly suppressed by discriminatrory behaviour in access to terminals.

The EU is by far the best placed to act to achieve an accessible and competitive inter-urban coach passenger sector and a true internal market for road passenger transport as these cannot be better achieved at national level. The proposal does not aim at total liberalisation of domestic services and Member States may still limit the right of access to national markets for regular services if a commercial service would compromise the economic equilibrium of a public service contract.

4.What should be achieved?

4.1.General policy objective

The proposed revision of Regulation 1073/2009 aims to resolve the problems of operators facing obstacles in national markets to develop inter-urban coach services and the low share of sustainable transport modes. The initiative aims at a proportionate response to national obstacles to market entry whilst avoiding excessive intrusion into the national markets.

Therefore the 2 general objectives (GOs) of the proposed revision have been defined as follows:

The GOs cover both national and international regular services, reflecting the potential for operators to provide both kinds of services as part of an integrated European route network.

It is in line with the political priority of the Commission for the period 2014-2019 to create a fairer and deeper internal market and strengthened industrial base.

It is also in line with the 2011 White Paper which foresees an efficient single transport area for multimodal intercity travel and transport, and recognises the need for the greater use of bus and coaches and the requirement to link the modal networks so they provide better modal choices for passengers.

4.2.Specific objectives

To achieve the GO the following 3 specific objectives (SO) have been developed. The SOs align with the three problem drivers defined in section 2.5.

SO1: Simplify administrative procedures 

This SO aims to address the problem of excessive administrative costs of entry, defined in section 2.5.2, by clarifying and simplifying administrative procedures including the procedure for authorising regular services.

SO2: Remove restrictions on access to inter-urban markets

This SO aims to address the problem of restricted access to national inter-urban markets, defined in section 2.5.1, by removing legal barriers to market access and stimulating competition in the national inter-urban markets.

SO3: Prevent discriminatory access to public terminal facilities

The SO aims to address the problem of restricted access to key infrastructure, defined in section 2.5.3, by requiring Member States to grant operators access rights to public terminal infrastructure on fair and non-discriminatory basis for the purpose of operating regular services. 

The SOs should be mutually reinforcing, such that interventions designed to ensure that they are met can be expected to improve the competitiveness of the sector through a series of interacting impacts. For example, removing restrictions on access to inter-urban markets could be expected to reduce the administrative costs of entry by simplifying procedures as well as removing direct restrictions on market access.

5.What are the various options to achieve the objectives?

The stakeholder consultation, the expert meetings, independent research and the Commission's own analysis have allowed the Commission to identify different policy measures, which served as a basis for the identification of a wide set of policy options. These options have been considered in order to address the problem drivers and the three specific objectives. Although the three problem drivers contribute to the overall problem, one problem driver will be treated separately from the other two 47 .

The assessment leading to the choice of an overall policy option addressing the main problems has be broken down into two assessments leading to the choice of two sets of policy options:

·the first set of policy options on market access addressing SO1 and SO2; and

·the second set of policy options on terminal access addressing SO3.

Then a separate assessment and comparison of the two different sets of policy options is performed and a preferred policy option from each set of options is selected. Finally, an assessment of cumulative effects for the combined two preferred policy options is performed.

The following process was applied for establishing the policy options:

·identify an extensive list of policy measures addressing the problems (considered policy measures);

·as a result of this initial screening, a number of policy measures were discarded from the initial analysis (see Annex 6 for the list of measures and the underlying justification).

·consider policy measures which are retained after a preliminary assessment; and

·identification of possible policy packages.

5.1.Retained policy measures 

Driver 1 – Excessive administrative costs of entry

Driver 2 – Restricted access to national inter-urban markets

Driver 3 – Restricted access to key transport infrastructure

5.2.Identification of possible policy packages

The policy packages have been defined so as to reflect an increasing level of regulatory intervention and entailing an increasing level of expected impacts. They are cumulative, in the sense that all measures in PO1 are also part of PO2, which itself includes further measures, and so on. This is intended to facilitate and structure the analysis of the impacts, given the large number of measures which must be assessed. They have been defined in a way to show the expected outcomes of increasing levels of regulatory intervention.

5.3.Identification of a list of market access policy options

The retained market access policy options to address SO1 and SO2 are:

The three ways in which the needs for authorisations are proposed to be reduced further along with the protection of PSC are set out in the following figure.

Figure 51: Approaches to reducing the requirement for authorisations and the protection of PSC's

5.4.Identification of a list of terminal access policy options

The retained terminal access policy options to address SO3 are: 

6.What are the impacts of the different policy options and who will be affected?

The analysis of impacts covers all policy options. The key impacts are captured quantitatively at a level of detail consistent with the available data, otherwise they are treated qualitatively. Based on a set of assumptions, an IA tool was developed by the external consultant to assess the development of the baseline and the effects of various policy measures within a 20 year timespan (from 2015 to 2035) to align with related impact assessments in the mobility package. The development of the baseline scenario is based primarily on input assumptions from an update of the EU Reference Scenario 2016 50 but additionally covers the implementation of the reform of the national regulatory frameworks for buses and coaches in Germany, France, Italy and Poland. The key output variables which result from the overarching modelling framework include: 1) changes to the level of transport activity; 2) fares for users; 3) connectivity of different social groups; 4) environmental costs and 5) regulatory costs for different groups. Some of the other important impacts (e.g. working conditions) are estimated based on the desk and field research. All costs and benefits are summarised over the 20-year period 2015-2035 and presented as a 2017 Net Present Values using a discount rate of 4%. Impacts on transport activity and employment are presented for 2030, relative to the Baseline. The sensitivity and robustness of the results were tested; the relative impacts of each policy option were not significantly affected by the low and high cases used in the sensitivity analysis, as described in Annex 4. Each policy option presented below is compared against the results of the baseline scenario, unless stated otherwise.

Each policy option has been analysed in terms of its economic, environmental and social impacts. Where possible, quantitative estimates are given, in other cases however, because of the non-availability of statistics, this was not possible. In these cases, a qualitative assessment is provided and where relevant strengthened by the opinion of stakeholders.

The impacts are likely to vary between Member States depending on the existing market access rules and the economics of individual routes. However, as noted in table 2-4, 14 Member States have already liberalised including 6 of the largest 7 national markets. In this IA the quantification of the problem of obstacles in national markets that hinder the development of inter-urban bus services focuses on the 14 Member States that have not liberalised their inter-urban regular coach and bus services. The estimated impact of market opening in these Member States is based on evidence from previous domestic coach market opening initiatives. The levels of secondary impacts are driven by changes to the level of transport activity. It is assumed that the non-liberalised Member States will experience a rate of transport activity growth between that of Germany and the UK in the first five years following market opening. The assumption is adjusted depending on the ability of each Member State to restrict market access under each option.

A schematic diagram of the segments of coach and bus markets is shown in figure 6-1 below.

Figure 61: Segments of the market for regular coach and bus services

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave 

The red dotted line divides the services that require subsidy (below the line) or services that can be operated commercially (above the line).

The horizontal axis of the figure indicates the distance over which a passenger is carried, ranging from short services on the left to long services on the right, and then international services which are the focus of Regulation 1073/2009. The vertical axis of the figure indicates the number of services.

The ellipses on the figure illustrate a number of market segments. First, and bottom left, are short-distance regular services, a large proportion of which, particularly on urban and suburban routes, are not commercially viable and hence require a public service contract as provided for under Regulation 1370/2007.

Second, and top left, are short-distance regular services in Member States in which all services are liberalised, and fares are either unregulated or set at levels which can be commercially viable.

Third, and bottom right, are longer-distance regular services in Member States where a mix of profitable and unprofitable services are operated as a package, as in the regional concessions in Spain and under the contracts awarded to KTEL companies in Greece.

Fourth, and top right, are longer-distance services in Member States which have liberalised regular domestic services, such as Germany (2013), Italy (2014) and France (2015) where, subject to the restrictions described above, new entrants have typically first entered the market on the most profitable routes. However, as indicated with the ellipse with the question mark (“?”), these services will in principle continue to expand until all profitable opportunities have been exploited, in theory including all services above the dotted red line.

This shows that opening access to commercial services and protecting public service contracts are not mutually exclusive. Opening access with the adequate protection of PSCs provides opportunities for carriers to respond to demand and provide new services. However, it also introduces the risk of carriers cherry-picking the most profitable services. It is therefore necessary for the authorisation procedure and the economic equilibrium test to strike a balance between the benefits of opening market access with the potential impact on the economic equilibrium of PSC’s. The retained policy options provide different combinations of protection for PSCs and market opening to assess the impact of each combination. The experience from liberalised and transition Member States (see table 2-4) has shown that PSC’s can be protected and co-exist with a thriving open inter-urban domestic transport market. The approach taken to opening market access in each of the liberalised Member States was different but in all cases it has been perceived to have been a success.

6.1.Impacts of policy options to address excessive administration costs of entry and market access problems

6.1.1.Economic impacts

Transport Activity: The impact of the policy options on transport activity is focused on the 14 non-liberalised Member States (including those awarding concessions through competitive tendering). Impacts on other Member States, which are already liberalised, are expected to be positive due to an increasing alignment of national market access rules, which will reduce the administrative burden on operators seeking to provide regular services in more than one domestic market. Furthermore the alignment of rules is expected to encourage some coach operators to provide international services.

Figure 6-2 shows the increase in inter-urban coach traffic under the market opening options by Member State in 2030 relative to the Baseline. While all options lead to substantial increases of coach traffic in Member States, Option 2 and Option 3 deliver the same increase (displayed as one column in figure 6-2) which is considerably larger than the increase under Option 1. Under Option 1 the economic test can be used to assess if the new service would compromise the economic equilibrium of the PSC. The test would examine the balance of the effects of a proposed new service between generation of new revenue (by creating new demand) and abstraction of revenue from existing rail or coach services operated under a PSC. The test allows the positive effect of authorising a new service (e.g. lower fares with more services, better connectivity and rail operators can enter into coach market or benefit from integrating with coach and picking up its passengers) to be considered and balanced against the negative effect of abstraction.

This inclusion of the measure setting common requirements for the protection of PSCs meeting the needs of an urban area, which will simplify the authorisation procedure and remove discretion to restrict market access unduly. The effect varies considerably between Member States and the increases in Belgium, Hungary and Greece are particularly large when compared to Spain, which has a well-developed coach market.

Figure 62: Impact of options by MS (increase in inter-urban coach traffic in 2030 relative to the Baseline, in billion passenger-kilometres)

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

The average growth rate by Member State by 2030 are shown in figure 6.3 below. The growth rates in Spain & the Netherlands, which have well-developed coach markets, are low even after the adjustment for the effect of liberalisation, and the additional traffic generated is therefore correspondingly low despite the volume of traffic in the baseline. By contrast, Hungary experiences a higher rate of growth in the baseline than Spain, reflecting the economic conditions taken into account in the baseline and the adjusted growth rate and increment in traffic is correspondingly large.

Figure 63: Average annual growth rate by 2030 by MS under each option

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

Under options 2 and 3 new services carrying passengers over distances of 100km or more cannot be prevented solely to protect an existing PSC. This introduces the risk that the new service may erode some form of PSCs such as a service to a remote area via inter-urban bus services or alternatively it may result in the requirement for an increase in subsidies. However, no evidence is available to indicate that the opening of the national market for regular coach and bus services has had either of these effects. In cases where profitable and non-profitable services are bundled together, passengers on the profitable routes are “subsidising” through increased fares the passengers on non-profitable routes. This inflates the fares on profitable routes, makes these services less attractive for citizens and promotes private use of cars. As described in table 2-4, 14 Member States have already opened their markets accounting for 73% of the total passenger kilometres for the EU. The impact of market opening in these Member States has been widely studied and we have not found any evidence that the market opening has eroded PSCs serving rural areas or that the negative impact of abstraction has been larger than the positive impact of generation. There are very few PSCs in place that cover services beyond 100km so the overall impact on PSCs of opening the market in this segment is likely to be very small. The national policies and frameworks towards the provision of regular services varies across the non-liberalised Member States however this was also the case for the 14 Member States that have already liberalised. Furthermore, stakeholders have been widely consulted and no stakeholder has indicated that market opening has resulted in these issues.

The evidence in the Impact Assessment support study suggests that Member States are more concerned with their urban PSCs and have chosen regulatory distances broadly consistent with permitting no journey wholly within their largest suburban system, and by implication any other suburban system. The current precedents include 100 km in France and 50km in Germany, and past precedents include 100 km in Sweden and 48km in the UK.

Table 6-1 below provides further information of incremental traffic under each policy option in 2030 relative to the Baseline. The Baseline projection of coach traffic is 589 billion pkm in 2030. The change relative to the Baseline under Option 2 and Option 3 is around 66.5 billion pkm in 2030, representing an increase of 11.3% in coach traffic. The change relative to the baseline for journeys is roughly 430 million and the number of services increases by about 510 in 2030.

Table 61: Estimated impact of options on coach traffic levels

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

When estimating the impacts it was not possible to differentiate between national and international regular services from the available data. The estimated volume of international traffic rises in line with the total traffic which is broadly consistent with the recent experiences when domestic liberalisation has been seen to stimulate the introduction of new international services as well as the development of national networks. It is also assumed that vehicle kilometres operated increase in line with demand and the average load factor will not change materially between options.

Revenue: The projected impacts on coach revenue reflect the underlying traffic activity impacts described above. Option 1 generates in the region of €27 billion in additional coach sector revenue in net present value (NPV) terms over the timescale of the impact assessment (2015-2035). Again, Options 2 and 3 perform particularly well, generating roughly €62 billion in additional coach sector revenue reflecting the inclusion of the measure setting common requirements for the protection of PSCs meeting the needs of an urban area, which would simplify the authorisation procedure and remove discretion to restrict market access unduly.

Fares for users and service quality: Given the lack of data from liberalised Member States on the effects of coach market liberalisation the impact on fares for users and service quality has been assessed in qualitative terms. Fares for users and service quality have been assessed together rather than in isolation to demonstrate the overall impact on customer service.

The evidence indicates that most coach services are cheaper, on a fare per kilometre basis, than the equivalent rail service. This may be because rail often offers faster journeys and can therefore act as a market ‘price-maker’. However, this is not always the case and coach fares have been found between two and three times greater than the equivalent rail fare, despite average speeds being similar between modes. In this case it is likely that there are additional factors such as service frequency and quality which permit coach operators to charge a much higher fare. Where one mode offers more frequent and faster services, the other may have the characteristics of an “inferior good 51 ” and have to accept lower fares. At long distances, where air services are available, coach services can attract passengers by not charging for heavy baggage, and may be viable when rail services are not.

In cases where rail services are slower and less frequent than coach services, rail may be an “inferior good” and coach may charge a fare many times the rail fare. This is particularly the case on the routes in the EU13 and is not dependent on the state of market opening.

Over the longer term the evidence suggests that after market opening, strong consolidation takes place. The competent authorities have the role of ensuring that there is no decline in competition in the supply of bus services after the removal of market restrictions due to the abuse of a dominant position by one player.

The following figure shows changes in National Express average real fares and service departures from Victoria Coach Station in London (the latter is an indication of two different dimensions of service quality, namely the range of routes served and the service frequency offered). It indicates that in the five years following full market liberalisation in 1980, average fares fell by more than 20%, while the number of departures increased by more than 100%, representing a substantial improvement in the service offer. Note, however, that by 1991 average fares were more than 10% higher than in 1980 while departures had fallen back to 120% of their pre-liberalisation level, reflecting the consolidation of the market and the strengthening of National Express’s dominant position from 1984.

Figure 64: Trends following domestic liberalisation in the UK

Source: Peter White, reported by ECMT, Steer Davies Gleave analysis in Annex F of support study

Whether the resulting price-service quality offer represented an improvement on the position in 1980 is difficult to determine on this evidence alone, although the increase in departures was clearly a benefit to passengers. In any event, the figure demonstrates the difficulties of sustaining any initial, substantial improvement in the value of the service offer, particularly if competition in the market is not preserved.

More recent evidence from Germany supports the view that that the immediate effect of liberalisation is to improve the price-service quality ratio and that competition is recognised an important determinant of fare levels 52 . A previously cited study by Dürr and Hüschelrath (2015) reported that there are significant reductions in fares on routes where there is competition between two or more operators. It also suggests, as illustrated in the figure 6-4 below, that liberalisation resulted in a wide range of price-service quality combinations within the first year of the new market access arrangements taking effect.

Figure 65: price-service quality offer of German coach operators in 2014

Source: Dürr and Hüschelrath (2015)

This can be interpreted as a measure of customer perceptions of the overall value for money offered by the different operators. As shown, operators offering higher value for money include both FlixBus (with lower fare and lower service quality rating) and DeinBus.de (with a higher fare and higher service quality rating). Those apparently offering lower value for money, based on customer perceptions, include operators such as Berlin Linen Bus and Eurolines Germany, both of which charged relatively high fares but whose service quality offering was broadly comparable with that of FlixBus. Note that both these operators were established before liberalisation, and could therefore be considered to represent the price-service quality offering in the absence of competition.

As part of the 2016 study on passenger transport by coach in Europe a number of fares for interurban services were sampled across 19 Member States as illustrated in the figure below. The fares include both peak and off-peak return fares and recorded data for booking one day, one week and one month ahead for a single point-to-point journey. From the available data, it appears that the fare per kilometre averages at €0.06 in liberalised markets, compared to €0.11 in restricted markets. This significant difference indicates that liberalisation usually leads to a reduction in prices with positive impacts for the passengers.

Figure 66: Sample of fares for national inter-urban services

Source: Adapted from Support Study for the IA for the Revision of Regulation 1073/2009

Over the long term it is more difficult to predict because the fares depend on the extent to which competition on the individual route is sustained. If competition is not preserved, the efficiency gains resulting from the removal of market restrictions can be outweighed by the negative consequences through the abuse of a dominant position by one player, leading to higher fares. However, any abuse of market power is susceptible to intervention by supervisory authorities; also the specific dynamics of this market will counter this: as fixed investment required for market entry is typically very low (no infrastructure investment, availability of leased bus capacity), any excessive price rises by mono- or oligopolists will immediately provoke new entry. These markets will therefore clearly remain contestable after the elimination of national regulatory barriers.

Based on this analysis, it can be expected that under Option 1, market opening will initially lead to a reduction in fares and more innovative pricing strategies in the short term. The studies mentioned above have identified significant reductions in fares on routes where there is competition between two or more operators.

However, the impact on fares over the long term is more difficult to predict, because it depends on the extent to which competition on individual routes is sustained. There is clear evidence that the market in Germany has become concentrated and emerging evidence that consolidation among operators is taking place in France and Italy. The UK market continues to be dominated by National Express despite more than 35 years of liberalisation.

Against this background, it seems that the impact on fares over the long term will to a great extent depend on the willingness of competent authorities to take action to preserve competition.

We have not identified any evidence from the Eurobarometer survey suggesting that passengers using services in liberalised markets perceive service quality to be materially higher than in other markets. However, some studies suggest that market liberalisation leads to a more innovative use of sales channels, the adoption of yield management and faster introduction of on-board services such as Wi-Fi. In addition, there is clear evidence from independent studies that the number of services offered increases substantially in liberalised markets.

Option 2 and Option 3 will have the same impact on fares as Option 1 but as they will stimulate more rapid market growth more aggressive price competition in the short term under both these options is expected.

Options 1, 2 and 3 all include measures that will simplify the market access procedures and open the inter-urban market to competition. As described in the impacts on transport activity section above, each option has a positive impact on the number of services as a result of newcomers entering the markets with extensive networks including coach lines in areas where coach services were previously barely present. There is also evidence (see table 2-5 above), from recently liberalised markets, that service frequency increases with the number of competitors on the route and that liberalisation has provided passengers with a greater choice of combinations of price and service quality.

Each of the three options has a positive impact on safety which is driven by the significant reduction in car traffic. External costs of accidents fall under Option 1 by about €1.2 billion, expressed as present value over 2015-2035. They fall more substantially under option 2 and 3 generating in the order of €2.8 billion in savings over the same period. This is discussed in more detail in the section 6.1.3. on social impacts.

Market opening has led to the use of more innovative use of sales channels and platforms, the adoption of yield management and faster introduction of on-board services such as Wi-Fi. This is particularly important to younger passengers who are the most interested in coach services. There is no evidence of any difference across the 3 options.

Level of performance of other modes of transport: Increases in the level of coach transport activity are likely to lead to decreases in the level of transport activity on competing transport modes. Competition from long distance coaches encourages rail transport to lower its prices and set up low cost services to retain its customers. Also, rail operators have the capability to enter the coach market to regain some of the passengers lost to rail such as in France where Ouibus (a 95% subsidiary of SNCF) holds 30% of the intercity coach market. To calculate the decrease in traffic for each competing transport mode, the traffic diversion factors derived from experience in Germany have been applied. These factors are: 4% for air transport, 40% for passenger car transport, 46% for rail transport and 10% for generated coach transport. The formula used to calculate the change in share is described in Annex 4, in the section “Assessment of secondary impacts”.

One factor that provides coach an advantage compared to rail is that operators make no payment for the use of infrastructure beyond an annual licence, while rail operators maybe required to pay not only the cost that is directly incurred as a result of operating the train service but also mark-ups on the basis of efficient, transparent and non-discriminatory principles which are permitted to obtain full recovery of the costs incurred by the infrastructure manager. Thus, while the directly variable costs of coach may be lower than those of rail, the effect of mark-ups, the effect of mark-ups may be the average costs of rail are higher than those of coach. In practice many of the costs of both rail and coach operations, including the provision of vehicle and crew, are time-based, so an important factor may often be the relative average speeds achievable by rail and coach, determined both by the rail and road infrastructure and the number of stops made on route. This initiative on access to the coach market should be seen as part of a co-ordinated response to, amongst other things, market challenges faced. As part of this package buses and coaches will be included within the scope of the Eurovignette Directive. The inclusion of buses and coaches will help to diminish distortions of competition in the internal market for passenger transport caused by according preferential treatment (i.e. exemption from paying for the use of infrastructure) to these vehicles, vis-à-vis rail transport, which is already subject to such charging.

A second factor providing coach with an advantage compared to rail is that the unit of capacity, a coach, is much smaller than a typical train. In practice, an interurban-service with a number of intermediate stops may generate only sufficient demand to justify a train every hour or every two hours. The demand between the two cities alone, however, may be sufficient to support a half hourly coach service operating non-stop between them on a direct motorway, in some cases with a comparable or shorter overall journey time.

The impact of each policy option on traffic carried by mode in 2030 relative to the Baseline is shown in figure 6-3 below. Under Option 1 there is a limited impact on rail of about 2% (about 13 billion pkm) and a 4.8% (about 28 billion pkm) increase in coach total pkm. Under Options 2 and 3 there is a larger but still limited impact on rail of 4.8% (about 30 billion pkm) with a significant increase in coach transport activity of 11.3% (about 66 billion pkm). The modal share of rail in under Options 2 and 3 is decreasing by 0.4 percentage points in 2030 relative to the Baseline (from 8.4% to 8%)

Figure 67: Estimated impact of market opening options on other modes (% change to the Baseline in 2030)

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

Our analysis, based on the experience of Member States that have liberalised their coach markets, indicates that the liberalisation of national markets can only be expected to have a limited impact in terms of passenger shift from rail. This could be explained somewhat by the targeting of coach operators of services at different groups of passengers. In the targeted consultation, coach operators confirm that they target specific groups such as those without access to a car, younger and older passengers and passengers who could be considered more finically disadvantaged.

The decrease in passenger car transport activity for the 3 options appears small at under 0.5% (27 billion passenger-kilometres) relative to the Baseline in 2030 but given the dominance of car travel in the EU passenger transport, even the small percentage reduction in car traffic achieved under each option has important implications for traffic congestion and emissions as discussed below.

As a result of the changes in the allocation of traffic across modes under Options 1, 2 and 3, the modal share of coach services increases. Under Option 1 the sector’s modal share increases by 0.4 percentage points in 2030 relative to the Baseline. Under Options 2 and 3, which generate more substantial additional coach traffic, the sector’s modal share increases by 0.9 percentage points. Against the background of the long term decline in modal share described in Section 2.2 this would represent an improvement in the competitiveness of the sector and facilitate inter-urban mobility for all citizens and in particular for groups with limited access to other modes.

The increase in coach traffic generated by each of the options results in a diversion away from other modes. The beneficial effects of the modal shift from car and air together with the generation of new traffic are greater than the abstraction from rail. The performance of coach and rail combined is improved by all three options so increase the modal share of sustainable transport modes.

The modal shift also reduces the revenues earned by other forms of public transport, particularly rail transport. However, similar to the net beneficial effect of the modal shift under each option there is a net increase in revenues due to the expansion of the market towards new passengers as described in figure 6-8 below.

Figure 68: Revenue of coach and other modes relative to the Baseline over 2015-2035 (expressed as present value)

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

To assess the impact of the policy options on the performance of other transport modes, the lost revenue arising from the decrease in the level of transport activity was estimated based on the demand reduction rates provided in in the first paragraph of this section. Under Option 1 rail revenues decrease by about 0.6% (€20 billion) relative to the Baseline and there is a net increase in revenues of around €5 billion (expressed as present value). Under Options 2 & 3 the estimated reduction in revenues is about 1.4% (€46 billion) and there is a net increase in revenues of around €10.7 billion relative to the Baseline (expressed as present value). However, the estimates of revenue loss are based on diversion factors derived from experience in Germany, which in some respects has introduced a greater degree of liberalisation than is implied in the policy options which provided more protection to existing services than is the case in Germany so the estimates of rail revenue loss shown in the figure below may overstate the impact.

Administrative Burden: The reductions in administrative burdens are estimated using the costs associated with authorisations and journey forms as previously described in table 2-6 53 .

The saving from the measure abolishing the journey form for occasional services is estimated at €4 million over the period 2015-2035 (expressed as present value) relative to the Baseline under all three options and is the only reduction in administrative burden under option 1.

Under Option 2 the same savings are generated from abolishing the journey form. It is assumed that revenue is foregone due to delays in the authorisation procedures and therefore savings are generated by the reduction in time to complete authorisation process from four months to two months. This saving is estimated at €1,450 million over the period 2015-2035 (expressed as present value) relative to the Baseline.

Under Option 3 the same reductions from getting rid of the journey form are generated as Option 2 with a reduction of around €240 million over the period 2015-2035 relative to the Baseline due to the elimination of the authorisation procedure and €3,230 million cost savings generated by the reduction in time to complete the authorisation process.

Impact on market structure in the coach and bus sector: Under Option 1, it is expected that the liberalisation of the market would lead to a more competitive market structure, at least in Member States where the market is currently dominated by a limited number of incumbents. Competitors are likely to focus on specific routes rather than trying to replicate or establish national route networks. Over the longer term the evidence suggests that after market opening, strong consolidation takes place. The competent competition authorities have the role of ensuring that the efficiency gains resulting from the removal of market restrictions are not unduly appropriated through the abuse of a dominant position by one player, leading to higher fares. The inclusion of the measure abolishing journey forms will also reduce costs of entry for the providers of occasional services.

Option 2 will have the same impact on the market structure as under Option 1 but it is likely that there will be more rapid growth which may lead to greater fragmentation of the market in the early years of liberalisation followed by consolidation. As mentioned above, the competent competition authorities have the role of ensuring that the efficiency gains resulting from the removal of market restrictions are not unduly appropriated through the abuse of a dominant position by one player.

Option 3 will have the same impact on the market structure as under Option 2, but the inclusion of the measure abolishing of the authorisation procedure is likely to make it more difficult to track market developments. If the European Commission does not have at its disposal comparable, reliable, synchronised, regular and comprehensive statistical data on the market it makes it difficult for the European Commission to carry out the tasks entrusted to it in the context of the common transport policy.

Potential relocation of businesses: The inclusion of a measure requiring Member States to grant access to national markets for regular services without discrimination in Options 1, 2 and 3 will enable operators to operate in markets that were otherwise closed to them without having to establish subsidiaries. However, in practice, operators may continue to establish subsidiaries in different Member States for a variety of strategic and operational reasons regardless of the regulatory environment.

We would not expect any of the options to have a material effect in the distribution of coach companies across the EU, although there may be some migration over the long term away from Member States whose markets are currently closed to operators established elsewhere.

Integration of ticketing and price competition: Under Option 1 the more fragmented market over the short term may result in less integrated ticketing since, for example, inter-modal ticketing arrangements will be more difficult to coordinate. Consolidation of the market could be expected to make such coordination easier. Over the longer term, competition could lead to the creation of a wide range of multi-modal products introduced through partnerships between coach companies and airlines as well as rail operators.

The more effective protection of public service contracts under Options 2 and 3 due to the inclusion of the measure to set common requirements for the protection of PSCs meeting the needs of an urban area will help preserve integrated ticketing arrangements in conurbations.

Level of infringements of rules on access to the market: Under Option 1 the rules governing access to national markets will be streamlined and it is expected that there will be fewer opportunities for operators to infringe them and hence fewer recorded infringements. However, it is possible that a greater level of market activity could result in some remaining rules, for example those protecting PSCs, to be infringed more frequently.

Option 2 should also result in fewer infringements due to the streamlining of market access rules, including those protecting PSCs.

The inclusion of the measure abolishing the authorising procedure in Option 3 would appear to increase the risk of infringements. The operator opening a new route would no longer be checked immediately before commencing the route. Enforcement would have to focus on access to the profession and the Community licence. The Member State of establishment would have a vital role in encouraging carriers to comply with the regulations.

Level of congestion: the changes to the level of transport activity, for both coach transport and competing modes, imply changes to the level of externalities produced by each transport mode. The net change in the level of congestion is based on changes to transport activity and the demand extraction rates and is further explained in Annex 4.

The absolute reduction in car traffic as a result of the options is significant, and since car traffic makes a major contribution to congestion the impact of the options on congestion costs are correspondingly large. Option 1 delivers a reduction in congestion costs of in the region of €6 billion over the timescale of the impact assessment (expressed as present value). Options 2 and 3 deliver a significantly greater reduction of about €15 billion in such costs over the same period.

There is no evidence that any of the three options would lead to greater congestion in urban areas. Urban congestion is more likely to be a result of terminals not being able to adequately accommodate all coaches in stands or if terminals no longer have the scope to expand to cater for further frequency increases in coach traffic.

Economic effects for SME’s: Under Option 1 liberalisation would provide new opportunities for SMEs, notwithstanding the risk of consolidation over the long term. If some new business models were to become widespread, national operators seeking to expand their networks would provide opportunities for sub-contracting and offer benefits that could be of considerable value to the SMEs. However these effects could be offset by a general trend towards greater market consolidation, especially if dominant operators emerge that prefer to manage operations in-house rather than out sourcing.

Under Option 2 the greater market stimulation would be expected to generate more opportunities for SMEs. As the measure abolishing authorisations in Option 3 would significantly reduce the regulatory costs faced by SMEs it would be expected to generate even more opportunities and encourage new businesses to enter the market, either as a sub-contractor or primary operators.

Just fewer than 60% of respondents to the public consultation have the view that abolishing restrictions on access to national markets for regular services will have a positive effect on the economic situation of SMEs.

Impact on public service contracts: In rail passenger transport competition takes the form of

·competition for the market – via PSC or service concessions, giving an undertaking exclusive right to operate on a specific route or bundle of routes; or

·competition in the market – where two or more operators compete on the same route.

Ensuring the provision of public rail services usually implies the need for compensating undertakings. Suburban and regional trains are usually run through PSC, whereas long distance and high speed trains may be more frequently operated under competition in the market. In most countries providing data via Railway Information Measuring and Monitoring System (RIMMS), the PSC compensation per train-km is higher than EUR 5 (with the notable exception of the UK). There does not appear to be any difference between the levels of PSC compensation per train-km between the group of Member States that have liberalised their coach market and the group of Member States that limit competition.

The portion of PSC services in total rail passenger traffic varies widely between the Member States. As shown in the figure below the portion of PSC services as % of total rail passenger services indicates that liberalisation of coach market appears to have little, if any impact on the portion of rail services operated under PSC in Member States.

Figure 69: PSC Services as % of total rail passenger services

Source: RIMMS, 2014 data except for IE and NL (2013) and EL and ES (2012). Domestic PSO for FR includes also train services TET, TER and Transilien (operated only by SNCF, and not RATP)

This indicates that the introduction of commercial coach services does not appear to have any significant impact on rail PSCs. However, in principle, it may result in a number of responses either by PSC operators, within any flexibility to do so provided in their contracts, or by the competent authorities. Responses might include changes to fares, vehicle quality, service frequency, length of service day (from first service to last service), off-peak and weekend provision, stopping pattern and, potentially, withdrawal. The mechanisms by which liberalisation may result in changes to PSC services are set out in table 6-2 below.

Table 62: Mechanisms by which liberalisation may result in changes to PSO services

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

In summary, competent authorities specifying PSC services, prima facie:

·may not bear revenue risks, in the case of net cost contracts; However, operators may stop operating under PSC if operations turn out to be financially unsustainable.

·may continue to provide services on social grounds irrespective of losses if politically acceptable; and/or

·may set fares much lower than costs, so that large revenue losses have relatively little effect on subsidy; and/or

·may make no change until the next contract is awarded, which may be up to 15 years away.

Under option 1 all PSCs remain protected so there is no impact. Under options 2 and 3 PSCs would be affected as follows:

·liberalised services required to carry passengers 100 kilometres more would only affect a small proportion of public service contracts, because many routes operated in accordance with public service obligations are under 100 kilometres long and passenger journeys on them are implicitly shorter;

·where cost-recovery is low, revenue loss has limited impact on overall subsidy; and

·publicly contracted services affected by liberalisation may not change until contracts are renewed.

Where coach markets have been liberalised, we have found no evidence of competent authorities awarding public service contracts or public service operators citing it as a major cause of reductions in the services provided or closing of lines. Member States such as FR, DE, IT, and SE who have already liberalised their markets have not reported during the consultation that there has been a requirement to increase subsidies or that there has been any loss of public service contract revenues. The opening of market access also provides the opportunity for competent authorities to reorganise existing PSC after their which may result in significant cost savings and/or also reduce travel times by taking advantage of the best of coach and rail.

There is specific evidence from France, Spain and Sweden an EU-wide study on PSO night trains that provides detailed information on the financing of PSCs. A summary of the findings are in the table below, and more detailed information are in Annex 7.

Table 63: Summary of evidence of impacts of liberalisation on PSOs

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

The intervention of the Member States would only be required under circumstances where commercial services serving remote areas fall below the limits acceptable to the competent authorities. Member States will continue to be free to organise PSO’s that are required in such a way as to ensure bus connectivity of remote urban centres under all options. The usual model of PSO to ensure coach connectivity with remote urban areas is the granting of public subsidies for the provision of these transportation services. Member States have flexibility to better organise the balance between commercial and non-commercial services and target the mobility needs of citizens. The distance threshold should not create many distortions for PSO operators serving rural areas as in some of the Member States that have not yet liberalised. It is estimated that less than 5% of bus and coach revenue from PSCs relates to routes over 100km. Given that such services seem likely to include intermediate stops rather than serving only end-to-end flows, it is estimated that less than 2.5% of revenue relates to passenger journeys over 100 kilometres. As not all such journeys would be replaced by a commercial service, less than 1.25% of bus and coach PSC revenue would be lost to commercial services. The introduction of competition on these routes is likely to result in decreased revenues from PSO passenger fares which may require an increase in public subsidies to maintain the same level of service under all options but the increase is relatively small. This would indicate that under all options the sustainability of public service contracts serving remote urban areas would not be undermined.

Under PO1, a significant part of the long distance coach and bus market would not be opened for commercial operators to address demand. The impact on PSOs is less than under other options as all PSOs can be protected but this option also limits the effectiveness of the market opening considerably as operators do not have the flexibility to address demand where it is needed.

Under PO2 and PO3 the impact on PSO’s is increased as more of the national markets for regular services are liberalised and new services carrying passengers over distances of greater than 100km cannot be refused on the grounds that the service could compromise a PSO. The distance threshold is set at a level to minimise distortions to PSO’s whilst maximising the impact of opening market access. Increasing the level of the distance threshold will reduce the impact on PSOs but will also reduce the effectiveness of the market opening.

Notwithstanding the overall abstraction of passengers from the rail sector, we estimate the associated loss in rail revenues to be around 1.4% relative to the baseline over the horizon of the impact assessment (expressed as present value). We therefore conclude that the primary effect of new coach services on the railways is likely to be a requirement for a relatively small increase in subsidy by the competent authority.

6.1.2.Environmental impacts

The changes to the level of transport activity, for both coach transport and competing modes, imply changes to the level of externalities produced by transport modes. The formula used to calculate the net changes is defined in Annex 4. In this section the impacts of the options on carbon emissions, air pollution and energy use are described. In all cases the environmental impacts of Option 2 and Option 3 are equal as the level of transport activity was the same in each case.

Level of carbon dioxide emissions: The savings in CO2 emission costs are substantial. They reflect the absolute reduction in car traffic achieved under each of the options. Under Option 1 CO2 emission costs are reduced by around €80 million relative to the Baseline over the timescale of the impact assessment. Options 2 and 3 deliver significantly greater savings with CO2 emission costs reduced by around €183 million in NPV terms.

As an illustration, 2 case studies were carried out looking at the connections between Paris and Lille and between London and Birmingham to assess the CO2 emissions in two different markets, respectively a recently opened market and a more mature market. In both cases, as explained in Annex 8, the CO2 emission impacts were important.

Passenger cars are by far the largest emitters of CO2 serving the connection between Paris - Lille and are responsible for in excess of 65% of all CO2 emissions. Coaches, together with electric trains, transporting passengers collectively are the lowest emitters of CO2.

A typical rail fare would be roughly €40 with a transit time of 1 hour compared to a typical coach fare of roughly €15 with a transit time of 3 hours. These differences illustrate the fact that users of rail and coach have very different preferences and that the coach customer group are more price conscious and place less value of time.

Based on available travel statistics and CO2 emissions per person by mode of transport, it can be calculated that the introduction of the coach connection between Paris and Lille has reduced transport CO2 emissions by about 10,000 tonnes of CO2 per annum. Moreover, it has resulted in around 250,000 less car journeys between the cities, thereby reducing also congestion as well as air and noise pollution.

It should be noted that this CO2 reduction was calculated based on one of the busiest interregional connections in Europe with the presence of a high number of parallel rail services. Considering that rail lines are relatively limited in the EU (200,000 km) compared to roads (5 million km), the scope for coach services – without any parallel rail services – is very important, and such new services would have an even more positive net CO2 effect, as travellers in these cases only have cars as an alternative option.

Energy use: The reduction in net energy use is also substantial. Again, it reflects the absolute reduction in car traffic achieved under each of the options. Under Option 1 net energy use is reduced by about 3.6 million tonnes of oil equivalent over the timescale of the impact assessment relative to the baseline. Reflecting the increased transport activity, Options 2 and 3 deliver significantly greater savings with a reduction of about 8.4 million tonnes of oil equivalent relative to the baseline.

Level of air pollution: Again, the savings in net air pollution costs are substantial and reflect the absolute reduction in car traffic achieved under each of the options. Under Option 1 air pollution costs are reduced by around €250 million relative to the Baseline over the timescale of the impact assessment (expressed as present value). Options 2 and 3 deliver significantly greater savings with air pollution costs reduced by about €590 million.

6.1.3.Social impacts

Working conditions and job quality: This initiative on rules on access to the coach market should be seen as part of a co-ordinated response to the social and market challenges faced. As part of this package market and social issues in the road passenger transport sector will become more interdependent. A holistic approach has been adopted with the social, internal market and posting of workers' rules working better together to ensure both fair working conditions for drivers and fair competition between operators.

The concerns of the stakeholders have been addressed by the different interlinked initiatives in this package: (i) internal market rules governing access to occupation of road transport operator and access to passenger and freight markets, (ii) social rules applicable to road transport sector, (iii) rules implementing the user and polluter pays principle in the context of road charging and (iv) the rules on interoperable tolling services through digital technologies. All together these initiatives jointly contribute to fair, efficient, environmentally and socially sustainable road transport sector. In particular, the links between the social and the internal market provisions are most prominent. The abuse of internal market rules by applying illegal business practices, such as: illegal cabotage, fake establishment in low-cost countries, have adverse effects on drivers' working conditions and often deprive them from their social protection rights. In the same vein, the misapplication of the social rules in road transport by non-respecting the driving, working or resting time requirements or applying the terms and conditions of employment of the low-wage country to drivers working most of the time in high-wage countries disrupts fair competition between operators by unfair cost gains. Therefore, solving the social challenges in the sector must go hand in hand with addressing the internal market problematic issues. Enforcement is a cross-cutting element affecting the effectiveness of both: the social and the internal market legislation. By strengthening enforcement and administrative cooperation between Member States in the social rules and access to the occupation initiatives should contribute to ensuring fair working and business conditions, which will enable a balance between the freedom to provide road transport services and adequate working conditions and social protection of road transport workers.

The on-going revision of the Posting of Workers Directive will ensure the right balance between the need to promote the freedom to provide services and the need to protect the rights of posted workers.

Although there is likely to be increased competitive pressure the holistic and co-ordinated response means that other initiatives will seek to alleviate the pressure on working conditions from the policy options on market access. These initiatives will address any potential erosion of labour market standards that is likely to occur over time and there does not appear to be a requirement for any further labour market policies to address these problems.

Employment: In the calculation of the estimate of employment it is assumed that employment grows in line with transport activity throughout the assessment period but the estimates assume no increases in productivity. There is also strong evidence from recently liberalised MSs such as France, Italy and Germany of the positive impact market opening has had on employment. Market opening at the EU level is estimated to result in an increase in employment in the coach sector. Under Option 1, it will result in about 34,000 additional employees by 2025, rising to about 37,000 by 2030.

Options 2 and 3 deliver significantly more employment with about 82,000 additional employees by 2025, rising to about 85,000 by 2030.

We would expect that emerging technological developments in section 2.8, including the introduction of driverless vehicles, will have an impact on the employment sector but it is not possible to forecast these with confidence at present.

Road Safety: The impact on road safety is positive for all options. The absolute reduction in car traffic drives savings in accident costs relative to the Baseline. Under Option 1, savings of around €1.2 billion will be generated by 2035 relative to the Baseline (expressed as present value). With Options 2 and 3 the savings generated increase to around €2.8 billion relative to the Baseline over the time scale of the impact assessment (expressed as present value).

Accessibility for people with reduced mobility, rights of the elderly and integration of persons with disabilities: The EDF has received complaints from members who are concerned that market opening will disadvantage people with restricted mobility. In its view, the needs of people with reduced mobility are generally not taken into consideration when operators are purchasing new coaches, and terminals are also poorly equipped. However, no evidence was found indicating that market opening has resulted in the provision of a poorer service to PRMs, affected the rights of the elderly, or the integration of persons with disabilities more than regulated ones.

Connectivity of different social groups: To determine whether the impact of liberalisation can be expected to be adverse or favourable overall, the following was considered:

·the extent to which publicly contracted services, and existing commercial services, are cut back in a way which disadvantages citizens with limited access to other modes; and

·the extent to which liberalised services create new opportunities for citizens with limited access to other modes.

On the first point, the impact is unpredictable, as it depends on many decision-makers dealing with routes with different levels of exposure to liberalised services, different levels of materiality to subsidy levels, different policies and different constraints.

On the second point, those introducing new services in liberalised markets are unlikely to have data on, and hence be able to target, citizens with limited access to other modes. They may enter the market using at least two business models:

·identifying a new connection, in a new market, which can be operated commercially: this may benefit citizens who did not have private transport; and

·identifying an existing connection, in a proven market, from which they can abstract passengers (given that the typical market positioning of coach relative to rail and air is that it is slower but cheaper, this may benefit citizens (or non-citizens) who could not afford access to other modes).

Evidence from the German market provides some insight into this issue, since it enables analysis of the origins of passengers on liberalised coach services 54 . It suggests that only around 10% of passengers had no access to other modes, but many of the others might have had “limited” access, such as a car which was not always available to them. We also note that more than twice as many coach passengers (30%) had come from long-distance trains as from local or regional trains (14%).

Data from a FlixBus coach users indicates that around 70% of coach stops could have been reached via the public transport or rail network, even if the coach journey itself was not well-served by public transport 55 .

Liberalised services may serve points which did not previously have public transport, particularly if they impose only a small time penalty or would be necessary in any case for rest or a crew change. One example of the former is on the frequent Oxford Tube coach service between Oxford and London in Great Britain, which includes a stop at the small village of Lewknor (population around 600), 20 kilometres from Oxford and 60 kilometres from London. However, we note that Member States would not be obliged to authorise such a stop in Options 2 and 3, as no passengers from Lewknor could be carried more than 100 kilometres.

Figure 6 10 Error! Reference source not found. compares coach and rail fares on journeys over 300 kilometres and plots rail fare on the horizontal axis and coach fare on the vertical axis.

Figure 610: comparison of coach and rail fares

Source: Comprehensive study on passenger transport by coach, Steer Davies Gleave, February 2016.

Coach fares are lower than rail fares (points low right on the chart) in many liberalised markets, and most notably in the UK, suggesting that in these markets, coach may be an inferior mode that tends to charge lower prices. This is also the case with all four of the transition Member States although coach fares may fall by around 20% in the first four years after liberalisation before rising to previous levels (see UK case study in Annex F of IA Support Study).

In practice, the outcome of liberalisation on coach fares depends on at least two factors:

In the first few years after liberalisation, coach fares may fall, as new entrants try to attract passengers and build market share.

In the longer term after liberalisation, coach fares determined in the market place may either be lower or higher than rail fares, depending on the relative quality, and particularly average speeds, of coach and rail services.

Of the Member States shown in figure 6-9, only Spain has a significantly lower average coach speed than rail speed 56 . This suggests that, all other things being equal, average coach fares in Spain may fall after liberalisation, but provides little indication of what may happen in other Member States.

The estimate of the proportion of additional traffic accounted for by passengers living in remote regions, passengers facing difficulty paying bills and elderly passengers (65 and over) under each option is derived using the data from the Eurobarometer Report.

The results of the assessment show that these disadvantaged or vulnerable social groups would benefit significantly from all three market opening options. Passengers living in remote regions would account for around 162 billion pkm by coach in the Baseline by 2030. Relative to the Baseline, under Option 1 the pkm by this group will increase by about 10 billion pkm in 2030. Under Option 2 and 3 the increase will be slightly over 2 billion pkm in 2030 relative to the Baseline.

Passengers facing difficulties paying bills would account for around 50 billion pkm by coach in 2030 in the Baseline. Relative to the baseline, under Option 1 the pkm by this group will increase by about 4 billion pkm in 2030. Under Option 2 and 3 the increase will be about 10 billion pkm relative to the Baseline in 2030.

Elderly passengers (65 and over) would account for about 145 billion pkm by coach in the Baseline in 2030. Relative to the Baseline, under Option 1 the pkm by this group will increase by around 7 billion pkm in 2030. Under Option 2 and 3 the increase will be around 15 billion pkm.

In practice, it is expected that passengers facing difficulties paying bills to benefit disproportionately, since their travel decisions are typically constrained by fares on offer and lack of access to a car.

Table 64: Synthesis of Economic, environmental and social impacts

6.2.Impacts of policy options to address terminal access problems

6.2.1.Economic impacts

Transport Activity: Section 2.8 described the calculation of the terminal capacity that might be unduly suppressed because of discriminatory behaviour. It suggested that an additional 400 million vehicle kilometres might be accommodated if publicly owned capacity were available on a non-discriminatory basis and managed effectively. This has been used as a basis for estimating the effects of a one-off and sustained uplift in capacity as a result of introducing measures to ensure a level playing field in the allocation of terminal capacity.

The effects of the options for improving terminal access are small in comparison to the effects from the market access policy options. The effect under Option 4 is due to the measure encouraging terminal operators to provide non-discriminatory access that delivers an estimated increase of 0.9% in coach transport activity in 2030 relative to the Baseline. Under Option 5 the effect is due to the requirement for Member States to grant non-discriminatory access, leading to 1.7% increase in coach transport activity (around 10 billion pkm) relative to the Baseline in 2030. It is important to note that this increase is instead of, as opposed to in addition to, the uplift under market access policy options.

Table 65: Estimated impact of options on coach traffic levels

Source: Support Study for Impact Assessment 2016 Steer Davies Gleave

Revenue: The revenue impacts reflect the underlying traffic impacts. Option 4 generates roughly €6 billion in additional coach sector revenue over the timescale of the impact assessment relative to the Baseline (expressed as present value) but the additional revenue generated by Option 5 is more significant at an estimated €12.5 billion.

Level of performance of other modes of transport: The impact of each policy option on traffic carried by mode is shown in the figure below. The effects of Options 4 and 5 on modal share of coaches are limited. The small reduction in car transport represents an absolute reduction which is more substantial under Option 5. Option 5 also delivers twice as much of an increase in coach pkm as Option 4. Under Option 4 about 0.4% (2 billion pkm) is diverted from rail in 2030 relative to the Baseline and under Option 5 it is about 0.7% (5 billion pkm). In both cases this is a very small portion of the traffic diverted from rail.

Figure 611: Impact of terminal options on other modes (% change in transport activity in 2030 relative to the Baseline)

Source: Adapted from Support Study for Impact Assessment 2016 Steer Davies Gleave

As the change in allocation of traffic across modes under terminal access options is small, the increase in the modal share of coach services is also small at an estimated 0.1 percentage points for both options relative to the Baseline in 2030.

The increase in coach traffic generated by the two options reduces the revenues earned by other forms of public transport. Under Option 4 rail revenues decrease by around 0.1% (€5 billion) during the timescale of the impact assessment relative to the Baseline. Under Options 5 the estimated reduction in revenues is about 0.3% (€9 billion) relative to the Baseline.

Quality of service: There is no evidence that Options 4 or 5 providing greater access to public terminals will have any effect on the quality of service. However improved access to terminals could encourage investment in new facilities.

Impact on market structure in the coach and bus sector: It is expected that Option 4 would support new entry and a more competitive market structure but under soft regulation the effect is likely to be marginal. The inclusion of the report provides the Commission with the opportunity to identify any remaining barriers but this would not encourage new entry unless followed up by further action.

The expected effect of Option 5 on market structure is greater than under Option 4 as where competition authorities have taken action to address discriminatory behaviour competing operators have been able to establish new services.

Potential relocation of businesses: Providing greater access to public terminals is not expected to have any material effect in the distribution of coach companies across the EU.

Fares for users: Given the estimated impact on traffic levels, it is not expected that the release of terminal capacity under Options 4 or 5 would have a material impact on fares other than on specific routes affected by discriminatory behaviour. Improved access to terminals could encourage investment in new facilities by new entrants and there is a risk that terminal facilities might be removed to exclude facilities from the scope of the Regulation if a prescriptive definition of a terminal is introduced.

Integration of ticketing and price competition: Option 4 could lead to more ticketing facilities at terminals under the measure encouraging non-discriminatory access, although the effect is likely to be marginal. A report by the Finnish Competition and Consumer Authority in 2016 reveals how discriminatory behaviour can impact on integration of ticketing and price competition. In summary it finds that the major bus companies formed a cartel with the aim of preventing market entry. In particular, by refusing access to certain services so competitors were unable to include their routes within published timetables, or sell their tickets through established service points.

The provision of ticketing facilities under Option 5 could be greater than under Option 4 as the terminal capacity released under a non-discrimination requirement could be expected to increase further. However, the effect is still likely to be limited.

Administrative Burden: The total level of administrative activity performed by operators and authorities decreases under both options relative to the baseline. Under Option 4 the administrative costs have limited or no impact. Under Option 5 there is a saving of about €110 million as improved terminal access results in reduced delay to the introduction of new services, enabling operators to secure incremental revenue more quickly (one year’s delay under the baseline is eliminated).

Level of infringements of rules on access to the market: The assessment indicates that Options 4 and 5 would not have any material effect on level of infringements of rules on access to the market.

Level of congestion: There is an absolute reduction in car traffic as a result of the options, and since car traffic makes a major contribution to congestion the impact of the options on congestion costs is of a corresponding magnitude. The estimates indicate that Options 4 delivers a reduction of about €1.7 billion in congestion costs relative to the Baseline and Option 5 delivers an estimated reduction of nearly €3.4 billion over the timescale of the impact assessment, expressed as present value.

The removal of restriction in access to terminals located in urban areas may reduce urban congestion in the immediate vicinity of the terminal as coaches would have access to stands within the terminal and would not require to park at on street stopping points.

Economic effects for SME’s: Under Option 4 new entry of SMEs could be supported. However, under soft regulation the effect is likely to be marginal.

Under Option 5 increased entry of SMEs is expected as the evidence indicates that where competition authorities have taken action to address discriminatory behaviour, competing operators have been able to establish new services. However, the overall effect is still expected to be limited.

Impact on public service contracts: Providing greater access to public terminals is not expected to have any material effect on public service contracts.

6.2.2.Environmental impacts

The changes to the level of transport activity, for both coach transport and competing modes, imply changes to the level of externalities produced by transport modes. The changes are smaller in the terminal access options compared to the market access options. In this section the impacts of the terminal access options on carbon emissions, air pollution and energy use are described.

Level of carbon dioxide emissions: The net cumulative savings in CO2 emissions costs relative to the Baseline are relatively small and reflect the absolute reduction in car traffic achieved under each of the options. Under Option 4 CO2 emission costs are reduced by about €20 million over the timescale of the impact assessment, expressed as present value. Options 5 delivers double the savings with net cumulative CO2 costs being reduced by about €40 million (expressed as present value).

Energy use: The net reduction in cumulative energy use relative to the Baseline is also relatively small. Under Option 4 energy use is reduced by 850 thousand tonnes of oil equivalent relative to the Baseline over the timescale of the impact assessment. Option 5 delivers twice as much savings with a reduction of 1.7 million tonnes of oil equivalent relative to the Baseline.

Level of air pollution: Finally, the net cumulative savings in air pollution costs are also relatively small. Under Option 4 air pollution costs are reduced by about €70 million relative to the Baseline over the timescale of the impact assessment, expressed as present value. Under Options 5 savings in air pollution costs of about €135 million are achieved.

6.2.3.Social impacts

Working conditions and job quality: The assessment indicates that Options 4 and 5 would not have any material effect on working conditions and job quality.

Employment: In the calculation of the estimate of employment it is assumed that employment grows in line with transport activity throughout the assessment period. The two options result in an increase in employment in the coach sector. Under Option 4, there are just about 9,000 additional employees by 2030. Option 5 delivers more employment, with almost 18,000 additional employees by 2030.

We would expect that emerging technological developments in section 2.8, including the introduction of driverless vehicles, will have an impact on employment but it is not possible to project this with confidence at present.

Road Safety: The impact on road safety is positive for both options. The absolute reduction in car traffic drives savings in external costs of accidents relative to the Baseline over the timescale of the impact assessment. Under Option 4, savings of around €260 million would be generated relative to the Baseline, expressed as present value over the timescale of the impact assessment. With Option 5 the savings generated increase to around €520 million.

Accessibility for people with reduced mobility, rights of the elderly and integration of persons with disabilities: The assessment indicates that Options 4 and 5 would not have any material effect on accessibility for people with reduced mobility, the rights of the elderly or integration of persons with disabilities.

Connectivity of different social groups: The estimate of the proportion of additional traffic accounted for by passengers living in remote regions, passengers facing difficulty paying bills and elderly passengers (65 and over) under each option is derived using the data from the Eurobarometer Report.

The results of the assessment show that these disadvantaged or vulnerable social groups would benefit significantly from all both options. Passengers living in remote regions account for around 28% of coach pkm. Relative to the Baseline, under Option 4 the pkm by this group will increase by about one billion pkm in 2030. Under Option 5 the increase will be about 3 billion pkm in 2030.

Passengers facing difficulties paying bills account for 8.5% of coach pkm. Relative to the Baseline, under Option 4 the pkm by this group will increase by almost 500 thousand pkm in 2030. Under Option 5 the increase will be almost one billion pkm in 2030 relative to the Baseline.

Elderly passengers account for 25% of coach pkm. Relative to the Baseline, under Option 4 the pkm by this group will increase by around one billion pkm in 2030. Under Option 5 the increase will be about 2 billion pkm in 2030 relative to the Baseline. In practice, it is expected that passengers facing difficulties paying bills will benefit disproportionately, since their travel decisions are typically constrained by fares on offer and lack of access to a car.

Table 66: Synthesis of Economic, Environmental and Social Impacts

7.How do the options compare?

7.1.Effectiveness and efficiency

The effectiveness and efficiency of the policy options for market access and terminal access are assessed separately against the policy objectives described in section 4. Considering that the regulatory costs are part of the policy objectives, the efficiency of the policy options is considered at the same time.

The effectiveness of the options depends on their ability to deliver the specific objectives set for this initiative. The effectiveness of PO1 is positive but limited. It will introduce more uniform market access rules and remove some restrictions on market access but Member States will still be able to restrict access to national inter-urban markets. In terms of cost effectiveness it rates the lowest with only a limited reduction in costs for operators and national authorities.

PO2 rates very effective in terms of delivering reduced fares and improved quality of services. It simplifies the authorisation procedure for operators providing them with greater transparency. It generates significant savings in environmental costs and an increase in modal share. It rates highly in terms of efficiency with significant reduction in costs for operators and authorities as a result of the simplification of the authorisation procedure and the introduction of a 100km threshold. There is a limited effect on PSC’s and other transport modes.

PO3 brings additional gains in terms of effectiveness due to the abolition of the authorisation procedure for services carrying passengers over 100 km. There remains a limited effect on PSC’s and other transport modes.

Table 71: Effectiveness of market access policy options

Efficiency shows the relation of achieved results and the necessary costs to do so. There are no major compliance or enforcement costs associated with any of the 3 market access policy options for either businesses or national authorities, and the administrative costs are reduced in comparison to the baseline. PO1 is positive in that it delivers the objectives at very limited cost and a small reduction in administrative burden of €4 million over 2015-2035 expressed as present value. However PO2 and PO3 have greater efficiency gains in that the deliver stronger results with limited costs and a substantial reduction in administrative burden of €1.4 billion and €3.5 billion 2015-2035 respectively. PO3 will require changes to enforcement and control. The abolishing of the authorisation procedure means that enforcement and control will now have to focus and access to the profession rules, the Community licence and road safety rules. Member States of establishment would have a much increased supervisory role. There would have to be increased cooperation between Member States to ensure the correct application of the Regulation. The only investigations that would take place would be in the Member State of establishment. Host Member States would rely on Member States of establishment would rely on Member States of establishment to carry out controls.

Table 72: Efficiency of market access policy options

For the terminal access policy options, the effectiveness of PO4 is very limited. There are some small positive impacts in terms of environmental costs, modal share and increases in transport activity and connectivity for disadvantaged social groups. The efficiency is weakly positive with small savings in compliance and administrative costs from the abolition of the journey form.

The effectiveness of PO5 is positive but limited with a greater increase in coach transport activity. There is also a positive impact on connectivity for disadvantaged social groups.

Table 73: Effectiveness of terminal access policy options

PO4 whilst addressing the problem of restricted access to key infrastructure includes voluntary measures to encourage coach terminal operators to provide access. This may not be adopted by all Member States and accordingly may only partly address some of the problems identified in practice. The efficiency gain of PO4 is therefore limited as although there is no major costs for businesses or national authorities there are also limited benefits associated with this option. PO5 is expected to deliver positive benefits in terms of facilitating inter-urban mobility at minor, if any, regulatory costs.

Table 74: Efficiency of terminal access policy options

7.2.Coherence

In terms of the coherence with EU policy, the following aspects have to be examined:

•    Internal coherence among the policy measures under consideration;

•    Coherence with key EU policy objectives; and

•    Coherence with other relevant EU legislation, including access to the profession, social legislation and the Posting of Workers Directive.

The policy options are coherent with two key overarching EU strategies, the Agenda for Jobs, Growth, Fairness and Democratic Change of President Juncker 57 and the 2011 White Paper on transport policy 58 .

All options contribute positively to employment but the impacts of Option 2 and Option 3 are much greater than the other options. The opening of national markets by Options 1, 2 and 3 and the requirement to grant non-discriminatory access to terminals in Option 5 contribute positively to a fairer and deeper internal market. Option 4, which encourages terminal operators to provide access, is neutral.

The general aim of EU transport policy is to reduce the adverse effects connected with mobility which above all means the promotion of co-modality i.e. optimally combining various modes of transport within the same transport chain. The objectives of this initiative are coherent with the 2011 White Paper as described in section 2.1 in that they both aim to make greater use of bus and coach as part of the core network for multimodal intercity travel. Under all 5 options the amount of traffic generated by the combination of rail and coach increases. The aim of and this initiative is complimentary to the aims of rail as they both have the objective of increasing the modal share of the more sustainable transport modes and improving performance vis-à-vis car.

The Commission's Roadmap for moving to a competitive low carbon economy in 2050 and the White Paper, transport as a whole has to reduce its CO2 emissions by 2050 of about 60% vs their 1990 level. The average CO2 emissions of bus and coach per passenger transported are best in class (with e-train) for long distance transport and as such these services can play a significant role in decarbonisation of transport. The revision is coherent with this strategy as the aim of sustainability is shared and the aim of increasing the modal share of sustainable transport modes is complementary to the aims of emission reduction, low-carbon, and a climate-friendly economy. All 5 options deliver savings in environmental costs of energy use, carbon and air pollution and contribute positively to the objective of cutting transport emissions in the Energy Union and the 2011 Transport White Paper.

The absolute reduction in car traffic results in a fall in accident costs under all options is positive for road safety. The market opening options will deliver a higher share of collective transport (coach and rail combined) increasing the density and frequency of service, thereby generating a virtuous circle for public transport modes. The aim of the Eurovignette directive 59 is to improve the functioning of the road transport internal market by reducing the differences in the levels and systems of tolls and vignettes applicable in Member States and to take better account of the principles of fair and efficient pricing by providing for greater differentiation of tolls and vignettes in line with costs associated with the road use. The inclusion of buses and coaches will help to diminish distortions of competition in the internal market for passenger transport by according preferential treatment (i.e. exemption from paying for the use of infrastructure) to these vehicles vis-à-vis rail transport, which is subject to such charging. Requiring non-discriminatory access to terminals promotes the greater integration of the modal networks providing citizens with a better modal choice.

Table 75: Coherence of market access policy options with overarching EU Strategies

Table 76: Coherence or terminal access policy options with overarching EU Strategies

Market opening may increase the competitive pressure on operators and their workers in non-liberalised markets. In this context there is an interaction with the legislation on access to the profession, social legislation and the Posting of Workers Directive. The strengthening of criteria of establishment and better cooperation between Member States in the legislation on access to the profession together with the clarifications of the posting rules applicable to road transport provided in the recent legislative proposals have been considered. While there are interactions due to the impact of these changes, overall the revisions make little difference to the assessment of impacts of the options and do not change the preference ordering of the policy options.

No significant coherence issues have been established regarding the interaction between the different policy packages and the Tachograph Regulation.

7.3.Proportionality of the preferred option

The preferred option does not exceed what is necessary to solve the problems and meet the objectives of the initiative. The problems identified can be best addressed at EU-level in the context of an amendment to the Regulation. The scope of the Regulation includes the international carriage of passengers by coach and bus within the territory of the EU as well as the conditions under which non-resident carriers may operate national transport services within a Member State. For a policy intervention in the internal market, and more importantly for international transport, it is necessary to have uniform implementation across all Member States and to ensure the homogeneous application of the rules and provide for fair competition. Under these conditions regulations are the most appropriate instrument as they provide clarity and they do not need to be mediated into national law by means of implementing measures.

Figure 71: Preferred Option Intervention Logic

7.4.Conclusion of the comparison of options and combined effects

Based on the analysis above, the preferred policy option to simplifying administrative procedures and remove restrictions on access to inter-urban markets rules is PO2 ‘Open access to the inter-urban market for regular services with the possibility to refuse authorisation if the economic equilibrium of an urban PSC is compromised’. It provides the same positive impacts as PO3 in terms of increasing the mobility of citizens with little or no access to other modes of transport and increasing the provision of inter-urban regular services. The competent competition authorities would have a role of ensuring that the efficiency gains resulting from the removal of market restrictions are not unduly appropriated through the abuse of a dominant position by one player, leading to higher fares. The inclusion of the measure abolishing journey forms will also reduce costs of entry for the providers of occasional services. PO3 has the largest reduction in administrative burden which is as a result of the abolition of the authorisation procedure for regular services. PO3 significantly alters the enforcement and control possibilities. Host Member States would rely on Member States of establishment to carry out controls and would be deprived of direct enforcement possibilities.

On the other hand, PO2 benefits from a new simplified authorisation procedure that provides for effective monitoring of market developments and ensuring that services are operated safely.

The preferred policy option to simplifying administrative procedures and providing for greater terminal access is PO5 ‘Equal access rules’. It provides the most positive impacts in terms of increasing the availability of existing public terminal capacity, increasing the modal share of interurban coach services and increasing the number of low income citizens and regions connected by coach services.

As previously described in section 5.2 the sets of market access policy options and terminal access policy options have been considered separately as they are not interlinked and the geographical scope of the effect is different in each case. The outstanding question is in how far the envisaged options would have impacts that are not captured by simple aggregation of those already reported. It is considered that PO5 would reinforce the impact of PO2 and have important synergy effects as follows:

1.Terminal capacity must be used as efficiently as possible to maximise the benefits of liberalisation. The growth in the number of services following market opening can quickly absorb available terminal capacity and the ability to investigate the allocation of capacity within individual terminals independently can results in a significant uplift and allow new services to be accommodated.

2.The presumption in favour of non-discrimination would help to ensure a more favourable business environment for new and smaller operators, allowing them to plan services with greater confidence.

3.The presumption in favour of fair and non-discriminatory access could reduce the number of allegations of discriminatory behaviour (through a deterrence effect) and the costs of investigating them (by providing legal clarity). If so, there would be a reduction in the administrative burden for all affected stakeholders.

4.New public terminal facilities would be subject to new legislative provisions governing access, preventing dominant operators establishing rights to capacity that might become entrenched.

5.New rules to ensure fair and non-discriminatory access to public terminals would be in line with broader EU competition law and policy, as well as legislation governing other sectors. It would help to reinforce the expectations of operators and policy makers about the direction of travel of the coach industry.

It would limit the ability of stakeholders to frustrate liberalisation through control of access to terminals.

One of the key objectives of this REFIT initiative is to reduce the administrative burden for private operators. The following table summarises the expected impacts of the preferred option on business costs.

Table 77: “REFIT” balance of the preferred option (Figures provided represent Net Present Values for the period 2015-2035 in million Euros)

The main impact of the preferred option is the standardisation and simplification of the authorisation procedure which is expected to save €1,450 million for the period 2015-2035 relative to the Baseline, expressed as present value. This saving results primarily from speeding up the authorisation procedure. The opening of a new coach line can only be refused for a number of defined grounds. The opening of a new coach line that carries passengers more than 100km cannot be refused to protect PSCs or because the principal purpose of the service is not to carry passengers between stops located in different Member States. This makes the authorisation regime simpler, more transparent and effectively lowers the barrier for new entrants. Operators benefit because fewer refusal grounds provides them with more certainty when they are assessing the viability of a new line.

Competent authorities also benefit from a reduction in administrative costs associated with national authorisation procedures and possibly because fewer disputes about negative decisions. There will no longer be a requirement for authorising authorities to seek the agreement of the competent authority of all Member States in whose territories passengers are picked up or set down for services carrying passengers over 100km. The time taken for an authorising authority to take a decision on the applications for these services can be reduced from 4 months to 2 months.

Savings of €110 million NPV over the period 2015-2035 relative to the Baseline are expected as a result of improved terminal access. This will reduce the delay for undertakings gaining access to terminals and enable them to commence the new coach line earlier securing incremental revenue more quickly.

The final saving on administrative burden is expected from the abolition of the journey form for occasional services. This is expected to save €4 million over the period 2015-2035 relative to the Baseline, expressed as present value. These savings result from undertakings having less administrative work to complete the forms and national authorities having less administrative costs from producing, distributing, collecting and monitoring the books of journey forms.

8.How would actual impacts be monitored and evaluated?

The Regulation does not contain satisfactory monitoring and reporting arrangements so the quality and availability of data and statistics pertaining to aspects of the Regulation is often limited. Although the information required to be reported under Article 28(1) & (2) of the Regulation is clear, the start and finish dates of the reporting period are not provided and no deadline for the submission of the report is mentioned. This has resulted in inconsistent reporting periods being used and reported by Member States. Even if good and reliable data were available on the number of passengers and the amount of pkms concerning cabotage operations, there are few statistics available for sub-sections of the market (e.g. medium or long distance coach services) to put the cabotage data into context.

The European Commission will monitor and evaluate the implementation and effectiveness of the legislation. The functioning of the Regulation should be observed to determine to what extent its provisions have contributed to a better functioning road passenger transport market. Thus the reporting obligation in the Regulation needs to be strengthened in order to allow a systematic analysis of the market. The Regulation needs to make clear what data (definition) needs to be gathered and reported as well as what kind of analysis/report is produced by the European Commission. The relevant data should be available from Member States.

The Regulation should have a provision which foresees a review and the evaluation of the new rules some five years after they apply. The evaluation could amongst others assess to what extent the revision of the Regulation has contributed to reaching its objective of simplifying administrative procedures, remove restrictions on access to inter-urban markets and preventing discriminatory access to public terminal facilities.

Lead DG

The lead DG for this initiative is DG MOVE. This impact assessment report concerns the initiative with Agenda planning reference 2016/MOVE/002 - "Better functioning of the market for bus and coach transport - Reg 1073/2009".

Foreseen adoption date: 4th Quarter 2017.

Organisation and timing

The initiative was validated in December 2016 and the impact assessment work started immediately afterwards. It lasted until August 2017.

The Inter-service Steering Group was chaired by the Secretariat-General with the close involvement of DG MOVE. All consultations of the associated DGs were closely coordinated between the two services.

The following DGs participated in the Inter-service Steering Group: DG COMP, DG RTD, and DG EMPL.

Inter-service Steering Group meetings were held on 25 October 2016 and 13 June 2017.

Consultation of the Regulatory Scrutiny Board

The Regulatory Scrutiny Board received the draft version of the present impact assessment report on 28 June 2017 and following the Board meeting on 19 July 2017 issued a negative opinion on 24 July 2017. The Board made several recommendations. Those were addressed in the revised IA report as follows:

The Regulatory Scrutiny Board received the revised version of the impact assessment report on 29 August 2017 and issued in written procedure a positive opinion with recommendations on 13 September 2017. The Board made further recommendations which were addressed in the revised IA report as follows:

Data used in impact assessment and external expertise

The Commission sought external expertise in the economic field through a contract for a support study with Steer Davies Gleave. In the course of the support study, a wide range of stakeholders were consulted to confirm the scope and the magnitude of the problems and to provide their views on the potential solutions to these problems 60 . This IA support study itself followed on from the ex-post evaluation of Regulation (EC) No 1073/2009 61 and a fact-finding study 62 . In parallel to these studies, the Commission services sought further expertise and input from stakeholders by means of dedicated meetings throughout the impact assessment, an open public consultation 63 .

Other sources of data used included:

– Study on Passenger Transport by Coach in Europe Final Report, July 2009;

– Impact Assessment accompanying the proposal for a Regulation of the European Parliament and of the Council on common rules for access to the market in coach and bus services (recast) , SEC(2007) 635 of May 2007;

– Member State reports on the activities of the competent authorities delivered to the Commission under Article 26 of Regulation (EC) No 1071/2009;

–Member State reports on the activities of the competent authorities delivered to the Commission under Article 28 of Regulation (EC) No 1073/2009 (unpublished).

This stakeholder consultation synopsis report provides a summary of the outcomes of the stakeholder consultation activities which were carried out as part of the review of the legislation on access to the international market for coach and bus services. It provides a basic analysis of the responses of stakeholder groups involved in the consultation process and a summary of the main issues which they raised. Five separate consultation activities were undertaken, namely:

·an open public consultation organised by the Commission services which was launched on 14/12/2016 and lasted until 15/03/2017 (13 weeks);

·a targeted stakeholder consultation organised by Steer Davies Gleave which was launched on 27 January 2017 and remained open until 24 March 2017 (9 weeks);

·18 interviews with a number of stakeholders, including industry representatives, trade unions, national authorities and operators, which took place during the period 9 March 2017 to 19 April 2017;

·a Special Eurobarometer organised by the Commission, based on interviews with 27,901 respondents at their homes across 28 Member States between 18 March 2017 and 27 March 2017; and

·stakeholder seminars and discussions at several different events.

The objectives of the consultation activities were to:

·provide the public and stakeholders with an opportunity to express their views on all elements relevant for the functioning of the internal market in road passenger transport, as well as to express their positions on the possible/desirable changes to the regulatory framework; and

·gather specialised input (data and factual information, expert views) on specific aspects of the legislation (e.g. national markets for regular services, terminals, etc.) from the enforcement community and from the industry, in order to prepare the impact assessment and the legislative proposal.

Open public consultation (OPC)

The objectives of the OPC were to help verify the problems faced by the sector, as identified in the ex-post evaluation, validate the objectives of the possible policy interventions and obtain the opinion of stakeholders on the appropriateness and expected impacts of the interventions. It was comprised of two questionnaires, one for the general public and a more specialised one for key stakeholders, which were made available online through the Commission’s EU Survey facility, ‘Your Voice in Europe’. The survey was open to all categories of respondents (individual citizens, representatives of business including individual firms or associations, public authorities and civil society organisations).

The general questionnaire was concerned with establishing how frequently respondents used coach services, their view on the importance of such services and their motivation for using them. A total of 18 responses were received: eight from consumers/citizens, seven from companies, two from non-governmental authorities and one other as shown in the table below.

Table A.2-1: Classification of stakeholders responding to the general questionnaire

Notes: “Other” is based on the respondents’ choice.

Respondents resided, or were based, in nine different Member States (Austria, Finland, Germany, Hungary, Lithuania, Slovenia, Spain, Sweden and the United Kingdom). The most responses were from Austria, Germany and Hungary, each accounting for three responses (17% of the total).

Six (33%) of the responses were from EU-13 Member States and 12 (67%) were from EU-15 Member States.

The specialised questionnaire was concerned with determining stakeholders’ views on the performance of the market and the possible impacts of potential changes to Regulation 1073/2009. There was a total of 153 complete or partial responses, including 68 companies involved in the transport chain, 28 non-governmental authorities and 17 road passenger transport workers, as shown in the table below.

Table A.2-2: Classification of stakeholders responding to the specialised questionnaire

Notes: “Other” is based on the respondents’ choice.

Respondents resided in, or were based in, 16 different Member States (Austria, Belgium, Czech Republic, Estonia, France, Finland, Germany, Hungary, Ireland, Italy, the Netherlands, Portugal, Romania, Spain, Sweden and the United Kingdom). Four respondents were from other European non-EU countries. 90 responses (59%) were from Germany.

Five (3%) of the responses were from EU-13 Member States and 144 (94%) were from EU-15 Member States.

Targeted stakeholder consultation

The targeted stakeholder consultation involved sending a detailed questionnaire to key stakeholders identified during the inception stage of the study. Four different questionnaires were produced, each tailored to the type of stakeholder.

A total of 31 responses were received, and a breakdown by stakeholder group is shown in the table below.

Table A.2-3: Targeted questionnaire responses

Table A.2-4: Responses to questionnaire

Interviews were conducted with the aim of gathering more detailed insights into stakeholder’s experiences as well as their views on the different measures under consideration. They also provided an opportunity to request quantitative data required for the impact assessment. In each case, we submitted specific questions in advance and/or sought clarification on information provided through the questionnaires. Interviews were held either face-to-face or by phone.

Table A.2-5: Summary of interview programme

Eurobarometer

A Eurobarometer public opinion survey is to be conducted amongst European citizens in the 28 Member States of the EU. The objective of this survey was to gather the opinion of the European citizens on a series of issues related to satisfaction with current coach services in their country and reasons for using/ not using such services.

Targeted stakeholder consultation

The consultant responsible for the support study consulted stakeholders through questionnaires. The questionnaires were targeted at each relevant stakeholder group and were adjusted to the needs of each particular group.

The survey investigated:

·how many Europeans use coach services and how regularly they do so;

·the extent of both domestic and international coach travel;

·the purposes for which coach services are used;

·how users rate coach services in general, and how they rate specific aspects of the service including feelings of safety, punctuality and reliability, fares, comfort and integrated ticketing;

·perceptions of service quality among non-users;

·the reasons why citizens choose to travel by coach; and

·what improvements in existing services, if any, would make them more likely to use coach services.

Conclusions and limitations

The objectives of the consultation activities have been largely achieved. All relevant stakeholder groups within all EU Member States have been consulted, and most provided their views to the policy measures under consideration.

It was difficult to engage stakeholders due to the level of consultation activity in 2017 in support of the study and that undertaken in 2016 as part of the evaluation. The feedback from most stakeholders we contacted was that they had already responded to the OPC and/or targeted stakeholder questionnaire and were too busy to engage further. Consulting via various methods on the same subject in a short period meant that there was only a limited response in some areas.

Although we requested that stakeholders send us any available data on the coach market, relatively little was received. This reflected the following:

·many Member States do not collect statistics for the coach market and are only concerned with the authorisations granted; and

·the operators we spoke to would not share data for reasons of confidentiality or because of their company policy.

Stakeholder input on problems with current legislation

Stakeholders provided significant input that helped to validate and elaborate the definition of the problem and identify potential changes to the current legislation. Input relating to the problem definition came primarily from the OPC and the targeted stakeholder questionnaires, and to a lesser extent from the interviews and Eurobarometer.

The sections below summarise the inputs provided and their implications for the following aspects of the problem:

I.restricted access to the market for domestic regular services;

II.the requirement for establishment in Member State;

III.different national approaches to liberalisation; discrimination in access to bus and coach terminals;

IV.and the role of coach services in improving connectivity and economic development.

Access to the market for domestic regular services is restricted

The Open Public Consultation Specialised (OPCS) stakeholders agreed that restrictions on access to the national market for regular coach and bus services constitutes a problem. 50 of the 153 (33%) respondents agreed that it is a major problem and 42 (27%) agreed that it is a minor problem. 30 of the 45 (67%) of companies engaged in the transport chain (“Companies”) indicated that the restrictions have a negative impact on the ability of undertakings to expand into new markets, and none expressed the view that they had a positive impact. A majority of stakeholders stated that establishing a common EU framework for access to national markets for regular services would reduce the cost of compliance with legislation relative to the costs under the present rules. However, such a framework was also considered to have a possible negative effect on incumbent coach operators by 22 of the 68 (32%) Companies, two of the three (67%) EU Governmental Authorities, 19 of the 28 (68%) NGOs and seven of the 17 (41%) Workers.

In an interview, National Express stated there was no discrimination in providing access to the UK market. They cited an example of a new entrant from the US gaining access and operating a service within six months of announcing its intention. However, two operators responding to the targeted stakeholder questionnaire noted that they had been refused access to the domestic market, given partial permission to operate or asked to modify their schedule because it was in competition with an existing public service.

The requirement for establishment in Member State

A majority of stakeholders responding to the OPCS stated that the specific requirement for local establishment is a concern, with 83 of 153 (54%) identifying it as either a minor or major problem. 39 of the 68 (57%) Companies who responded stated that it was a major or minor problem. However, two of three responses from EU Governmental Authorities, 14 of 28 (50%) from NGOs and four of seven (57%) from Regulatory Authorities indicated that the requirement was not a problem. The biggest perceived negative impact of this requirement among Companies was the associated administrative costs for carriers – 29 of the 36 (81%) identified these costs as a negative impact.

Moreover, a majority of stakeholders considered that assisting entry into national markets by carriers resident in other Member States would be beneficial. 38 of the 68 (56%) Companies and 11 of the 17 (65%) road passenger transport workers (“Workers”) stated that this would make a positive contribution to the market. At the same time, a majority of NGOs, 15 of the 28 (54%), and Regulatory Authorities, three of the seven (43%), stated that there would be no impact on the market.

Different national approaches to liberalisation

43 of the 68 Companies (63%) and 14 of the 17 Workers (59%) responded that the ‘patchwork’ approach to liberalisation across the EU was a problem. However, two of the three EU Governmental Authorities (67%), 16 of the 28 NGOs (57%), four of the seven Regulatory Authorities (57%) and two of the three Enforcement Authorities (67%) did not consider the differences between the levels of liberalisation in different Member States to be a concern. Again, the effect on the administrative costs for carriers was considered to be the greatest negative impact, with 32 of the 38 (84%) Companies, seven of the nine (78%) NGOs, two of the three (67%) Regulatory Authorities, six of the eight (75%) Workers and an Enforcement Authority respondent indicating that there would be a significant negative impact or negative impact.

This view was reinforced during interviews with operators. For example, National Express highlighted that consistency on market access rule is needed as some countries’ national rules have precedent over European rules, making it difficult to enter new markets. However, the European Trade Worker’s Federation (ETF) said that they disagreed with liberalisation as there are no consistent rules governing driver working conditions across the EU. They cited the freight industry as an example of how problems can arise in a mature liberalised market. This opinion was supported by other Pan-European organisations, including the EDF, which stated in interview that it would prefer a more regulated market, as in the rail sector.

Discrimination in access to bus and coach terminals

A majority of stakeholder groups responding to the OPCS stated that discrimination against new entrants in providing access to terminals was a problem. 39 of the 68 Companies (57%), two of the three EU Governmental Authorities (67%), 15 of the 28 NGOs (54%), four of the seven Regulatory Authorities (57%) and 10 of the 17 Workers (59%) indicated that discrimination was either a major or a minor problem. 26 of the 32 (81%) Companies stated that the resulting administrative costs for carriers constituted a negative impact. No stakeholder group considered that discriminatory access to terminals had a positive impact. Two of the three (67%) Enforcement Authorities that responded did not consider discrimination to be a problem however.

When asked about complaints from operators in regards to terminal access, the French Regulator gave an example of an ongoing dispute by a coach operator. The operator could not gain access to the coach terminal at Beauvais airport due to the non-publication of the terminal access rules. The case was dismissed after the rules were subsequently published, but it was decided at the end of December 2016 to open an infringement procedure to investigate possible breaches by the operator of its legal obligations. In the Regulator’s opinion, the rules were not objective, transparent and non-discriminatory in nature. The investigation is on-going.

The view that terminal access is discriminatory was supported by Megabus who told us that they had been denied access to the terminal in Birmingham which is privately owned by National Express, a rival operator, and have had difficulty obtaining departure slots at the public terminal in Leeds which is managed by National Express.

The role of coach services in improving connectivity and economic development

Six of the eight Consumers (75%) and six of the seven Companies (86%) participating in the Open Public Consultation General (OPCG) gave a positive response when asked if coach services were viewed as important for the economic development of the respondent’s region and jobs. A frequent comment in the free text section was that better connections and coordination between different modes of transport would encourage greater use of coach services. In general, respondents did not consider that the use of coach services was discouraged by excessive fares, with four of the seven (57%) Companies, 100% of NGOs and five of the eight (63%) consumers viewing fares positively.

However, these results must be qualified to some degree by the results of the Eurobarometer survey. Across the EU, some 35% of those surveyed made some use of coach services to travel within their own country, with 25% using them to travel to destinations in other countries. The majority of journeys are made for leisure purposes, although some passengers use coach services to connect with airports and rail stations as well as to make work-related trips. The primary reasons for travelling by coach are the availability of low fares, even among countries with more liberal market access rules, although lack of access to a car was also frequently cited a reason for choosing coach services.

Nevertheless, the Eurobarometer results also provide some evidence that fares continue to be a barrier to coach travel. Among non-users, the most frequent responses to the question ‘what would make you more likely to travel by coach?’ were lack of access to a car (37% of non-user responses) and lower prices (26% of non-user responses). The corresponding responses among economically disadvantaged non-users (facing difficulties paying bills most of the time) were similar (35% and 32% respectively). Moreover, among users of coach services in the same disadvantaged group, low prices accounted for 32% of responses to the question ‘why did you decide to travel by coach on the most recent trips?’ This suggests that lower income passengers are aware of the price competitiveness of coach travel but would make more trips if fares were even lower.

Stakeholder input on policy measures considered

Stakeholders provided input on the level of support and expected impacts of the policy measures under consideration. An analysis of the views expressed is presented below.

Extend the scope of the legislation to include all regular services (both international and national services)

The majority of respondents to the OPCS supported establishing a common framework in the EU for access to the national for markets for regular services. 44 of the 68 (65%) Companies, four of the seven (57%) Regulatory Authorities, all three (100%) Enforcement Authorities and 11 of the 17 (65%) Workers gave the opinion that the measure would improve the performance of the coach market. Two of the three (67%) EU Governmental Authorities and 15 of the 28 (54%) NGOs responding stated that this proposed measure would not contribute to the performance of the coach market.

The respondents to the targeted questionnaire expressed mixed opinions on the proposed extension of scope. Most Ministries/Regulators that offered an opinion (six out of eight) did not support the extension or considered that it should be limited and only applicable in certain circumstances. The reasons given ranged from concerns about unfavourable impacts on coach sector employees to the potential adverse impact on services operated as public service obligations. However, two of three operators, the two Pan-European organisations, and two of three operator associations offering an opinion were supportive. A number of these respondents cited the success of liberalisation in Germany and France, a reduction in bureaucracy caused by national regulations and prevention of unfair competition as reasons to extend the scope.

Abolish the authorisation procedure so that any undertaking established in a Member State would be free to operate new regular international and national services on any route whether it is already operated by one or more transport undertaking

15 of the 20 Ministries/Regulators (75%) that responded to the targeted stakeholder questionnaire supported keeping the authorisation procedure. In their opinion it was a useful tool to monitor the market and ensure safety standards were met. Only one Ministry/Regulator supported abolition of the authorisation procedure, stating that the current process was an unnecessary administrative burden. Four of the six operators who responded (67%) also supported keeping the authorisation procedure but highlighted that they would like to see the timescale reduced. There was mixed support among operator associations, with two arguing for abolition to increase transparency and two stating that it should be kept but standardised.

When interviewed, the Italian Regulator was in favour of keeping the authorisation procedure and establishing a framework that could be used to evaluate the economic and financial capabilities of applicants. The main reason authorisations are refused in Italy is because the applicant does not meet the minimal financial requirements to guarantee the service. This view was supported by National Express, who noted that the authorisation procedure was robust albeit time consuming. They suggested that the length of the process could be reduced from three to two months.

Set common requirements for the protection of PSCs so as to ensure that Member States are permitted to take action to protect public services contracts from competition

36 of the 68 Companies (53%) and eight of the 17 Workers (47%) responding to the OPCS stated that removing the protection of PSCs from competition would contribute to improving the performance of the market. The biggest negative impact was perceived to be the effect on incumbent coach operators.

The Italian Regulator suggested in an interview that removing the national limitation for PSOs would be beneficial. If a service in Italy crosses two regions it is regulated at the national level, and otherwise subject to regional regulation. Introducing a kilometre-based definition for the purposes of determining regional jurisdiction would simply the process.

The response to the targeted stakeholder questionnaire was more divided. Six out of 20 Ministries/Regulators (30%) supported a set of common requirements on the grounds that this would help to create a more level playing field, while five (25%) did not support the proposed measure.

Require that carriers from all Member States be guaranteed access to national regular services markets without discrimination on grounds of nationality or place of establishment

The responses to an OPCS question concerning abolition of restrictions on access to national markets for regular services were mixed. 42 of the 68 Companies (62%), four of the seven Regulatory Authorities (57%) and 10 of the 17 Workers (59%) stated that abolition would contribute to improving performance of the market. However, two of the three EU Governmental Authorities (67%), 17 of the 28 NGOs (61%) and two of the three Enforcement Authorities (67%) did not consider that the proposal would be beneficial.

9 of the 20 Ministries/Regulators (45%) that responded to the targeted stakeholder questionnaire did not support this proposal. They considered that the measure could lead to discriminatory conditions or have a negative impact on employment. The other respondents within this category either did not express an opinion or did not recognise the underlying concern. The only support for the measure came from the operator associations - 3 of the 6 respondents in this category (50%) considered that it would benefit customers and lead to a better quality of service.

Devise a definition of a coach terminal so that it can be differentiated from stopping points and on-street bus stops

The respondents to the targeted stakeholder questionnaire broadly supported this proposal. Two of the three operator associations (67%) that responded to the question believed it would be useful to have one transparent definition. Of the Ministries/Regulators that responded, 8 (40%) supported having a common definition while 5 (25%) did not see any merit in a definition and considered that it should be left to Member States.

When interviewed, the EDF highlighted their preference for terminals in defined locations to guarantee better access for disabled people. EDF added that this was particularly important for people with autism as it allowed them to plan their trips in advance.

Establishing minimum common requirements to ensure that coach terminals provide access to operators of regular services on fair and non-discriminatory terms

A majority of respondents to the OPCS considered that facilitating a level playing field in access to terminals would help to improve the performance of the market. 46 of the 68 Companies (68%), 15 of the 28 NGOs (54%), five of the seven Regulatory Authorities (71%) and 11 of the 17 Workers (65%) responded positively to this proposal, although two of the three (67%) Enforcement Authorities that responded considered that it would have a negative impact. 41 of the 68 Companies (60%) and 10 of the 17 Workers (59%) stated that the effect on service quality would be beneficial.

Moreover, the majority of Ministries/Regulators that responded to the targeted stakeholder questionnaire supported establishing common requirements to ensure that access to coach terminals is fair and non-discriminatory. Seven of those responding (35%) supported the proposal, although two considered that it should be left to best practice and four stated that there are sufficient measures already. All three Pan-European organisations and all three operator organisations that responded supported the proposed measure. Two operators indicated that establishing requirements was an essential measure.

In an interview, the operator association Confederation of Passenger Transport (CPT) stated that terminal access was a major concern. They suggested that there should be an EU-wide regulation requiring Member States to adopt appropriate measures to enhance and manage terminal capacity. CPT also indicated that the coach terminal at Heathrow in the UK was an example of good practice in the definition and transparency of schedules and tariffs.

Abolish the requirement for occasional services to require a journey form

There was a positive response to the OPCS on whether journey forms are useful. Three EU Governmental Authorities (100%), six of the seven Regulatory Authorities (86%) and two Enforcement Authorities (67%) supported this view. However, 49 of the 65 Companies (75%), 21 of the 27 NGOs (78%) and 15 of the 17 Workers (88%) considered that journey forms served no useful purpose.

Only one Ministry/Regulator responding to the targeted stakeholder questionnaire supported abolition of the requirement for a journey form. 13 of the 14 Ministries/Regulators (93%) that responded to the question wanted to keep the requirement as they regard it is a useful means of monitoring and regulating coach services. one operator, one Pan-European organisation and one operator association stated that journey forms should be retained. However, three of the operator associations that responded (75%) and one Pan-European organisation stated that journey forms should be abolished in the interests of reducing bureaucracy.

Clarify the definition of ‘international carriage’ to ensure that closed-door tours that visit other Member States are not excluded from the scope of the Regulations

The respondents to the targeted stakeholder questionnaire did not offer specific support on the clarification of the definition of ‘international carriage’, although only one Ministry and one operator explicitly stated that the meaning is currently clear and well-understood.

Similarly a majority of stakeholders responding to the OPCS considered that the definition was sufficiently clear. 40 of the 66 Companies (61%), two of the three EU Governmental Authorities (67%), 20 of the 26 NGOs (77%), six of the seven Regulatory Authorities (88%), 13 of the 16 Workers (81%) and all three Enforcement Authorities participating stated that further clarity was not needed.

Clarify the definition of “regular services” to ensure that there is no requirement to have stopping points along the route but if there is stopping points they must be known in advance

The respondents to the targeted stakeholder questionnaire did not offer any specific support for clarifying the definition of ‘regular services’, although only one Ministry and one operator explicitly stated that the meaning is currently clear and well-understood. One Ministry mentioned that it would support a clear definition of ‘special regular services’.

A majority of all stakeholder groups responding to the OPCS also stated the definition was sufficiently clear. 35 of the 65 Companies (54%), two of the three EU Governmental Authorities (67%), 20 of the 27 NGOs (74%), four of the seven Regulatory Authorities (57%), nine of the 16 Workers (56%) and all three Enforcement Authorities participating stated that clarity was not required.

Clarify that there is no requirement for an own-account operator to possess a community licence to be issued a certificate for own-account operations

Similarly, respondents to the targeted stakeholder questionnaire did not offer specific support for clarifying that there is no requirement for an own-account operator to possess a community licence if it is to be issued a certificate for own-account operations. Among the stakeholder groups responding to the OPCS, only two of the three EU Governmental Authorities (67%) indicated that the current provision is not sufficiently clear.

Clarify the meaning of “Cabotage operations shall be authorised…” in Article 15 to mean that cabotage operations are authorised rather than need to be authorised

10 of the 20 Ministries/Regulators (50%) that responded to the targeted stakeholder questionnaire specifically mentioned that they would support clarification of the meaning of this provision. This view was supported by the two Pan-European organisations that responded, and an operator noted that it was particularly important as interpretations vary by country. Moreover, only four Ministries/Regulators (20%) considered the meaning to be sufficient already.

The need for greater clarity was generally supported by the results of the OPCS. Two of the three EU Governmental Authorities (67%), four of the seven Regulatory Authorities (57%) and two of the three Enforcement Authorities (67%) indicated that the current cabotage rules are sufficiently clear. However, 26 of the 67 Companies (39%), 20 of the 27 NGOs (74%) and seven of the 15 Workers (47%) saw no value in further clarification. The biggest negative impact of not having clarification was perceived to be the enforcement costs for Member States.

The open public consultation was mostly used as a test of the validity of the Commission's understanding of the problems at stake and of the most adequate policy measures considered. The results confirmed the Commission's initial views and approach to the ex-post analysis and to the Impact Assessment.

The OPC and the targeted stakeholder questionnaires, and to a lesser extent from the interviews and Eurobarometer provided the information for the problem definition. It was not possible to get much more quantitative (data, statistics) information from the stakeholders during the consultation process. However, it was a rich source of qualitative (opinions, views and suggestions) information which helped close the Commission’s knowledge gap.

Citizens & passengers – are provided with an improved offer of passenger transport services in terms of availability, cost, quality and reliability across the EU. The promotion of coach travel facilitates mobility for all and in particular those who suffer from transport disadvantage. Where new coach and bus services operate citizens will benefit from less congestion, better air quality due to the on average lower emissions that all other inter-city passenger transport modes and in particular from car.

Road Passenger Transport Operators – benefit from the removal of legal barriers to market access and the introduction of uniform market rules. There is a reduction in the administrative burden and new entrants will have fair and non-discriminatory access to terminal infrastructure gain business opportunities. Incumbent operators lose protection but also benefit from new business opportunities and the incentive to innovate.

Terminal Operators – must provide all carriers with non-discriminatory access to terminals, promoting competition between carriers and the development of an integrated coach network. They will benefit from new business opportunities.

Road Passenger Transport workers – there will be an improvement in employment opportunities without any apparent adverse impact on working conditions, pay and employment conditions or health and safety in the workplace.

Public Authorities – Will benefit from a reduction in administrative burden from the introduction of a simplified authorisation procedure for regular services and the abolition of the journey form for occasional services. May affect how public authorities provide for inter-urban passenger transport e.g commercially or in the general economic interest through PSCs.

Structure of THE IA tool

An Excel-based IA tool was developed to evaluate impacts in each Member State across a 20-year assessment period from 2015 to 2035. An illustration of the structure of the IA tool is set out in the figure below.

Figure A.4-1: IA tool structure

The main elements within the tool are as follows:

·Estimating the baseline scenario: it provides projections under current trends and adopted policies, drawing on input and growth assumptions an updated EU Reference scenario 2016 64 .

·Estimating the impact of liberalisation: changes to the baseline scenario level of transport activity arising from the implementation of defined policy measures are estimated based on evidence from previous domestic coach market liberalisation initiatives. Impacts on regulatory costs are calculated separately.

·Assessing secondary impacts: deviations from the baseline scenario level of secondary impacts are driven by changes to the level of transport activity.

Each of these elements is explained in more detail in the following paragraphs.

Baseline scenario

The Baseline scenario builds on the EU Reference scenario 2016 but additionally includes some updates in the technology costs assumptions (i.e. for light duty vehicles) and few policy measures adopted after its cut-off date (end of 2014) like the Directive on Weights and Dimensions, the 4th Railways Package, the NAIADES II Package, the Ports Package, the replacement of the New European Driving Cycle (NEDC) test cycle by the new Worldwide harmonized Light-vehicles Test Procedure (WLTP) 65 , and the market liberalisation of buses and coaches market in France, Germany, Italy and Poland.

The Baseline scenario has been developed with the PRIMES-TREMOVE model (i.e. the same model used for the EU Reference scenario 2016) by ICCS-E3MLab. The impact of the market liberalisation of buses and coaches market in France, Germany, Italy and Poland has been evaluated directly with the Excel-based IA tool.

The Baseline scenario of the Excel-based IA tool, used as benchmark for comparing the Policy Options, is defined in terms of few metrics estimated for the whole of the assessment period (2015-2035):

·the level of coach transport activity (in terms of passenger kilometres, vehicle kilometres and journeys);

·the level of transport activity on competing modes (rail, car and air);

·the modal share for coach;

·fare levels;

·revenue (for coach and competing transport modes);

·levels of employment;

·congestion costs;

·accident costs;

·energy use (in tonnes of oil equivalent);

·CO2 emissions (in tonnes and monetised using the value of CO2);

·air pollution (in terms of the external costs of pollution); and

·regulatory costs.

The sources and assumptions used to estimate each of these metrics in the Excel-based IA tool, in each Member State, are shown in the table below.

Table A4-1: Baseline Scenario sources and assumptions

* Does not include number of services, international coach activity or cabotage. Source: Steer Davies Gleave

** The PRIMES-TREMOVE is a private model that has been developed and is maintained by E3MLab/ICCS of National Technical University of Athens, based on, but extending features of the open source TREMOVE model developed by the TREMOVE modelling community.

As shown in the table above, in most cases, the metrics have been sourced from the Baseline scenario developed with the PRIMES-TREMOVE model in the context of the Impact Assessment accompanying the Proposal for a Directive amending Directive 1999/62/EC on the charging of heavy goods vehicles for the use of certain infrastructures.

The PRIMES-TREMOVE transport model does not contain projections of employment levels and some measures of transport activity (the number of services and international coach activity) for the coach market. Therefore, the baseline level of these metrics has been estimated using alternative sources and assumptions.