I was on a bus in Cornwall today, and compared ticket prices with some of my fellow passengers. It was interesting how little extra it cost to go double the distance. £4 for an hour. £4.50 for two hours. One poor chap had to get back on the same bus because his connecting bus wasn’t running, so he ended up paying £8 for the same journey as me, and I paid £4.50.
What this tells me is that taking up a seat for about an hour on a Cornish bus costs only 50p! To get on and off the bus, and interact with the driver to buy your ticket costs a whopping £3.50. There are some possible explanations for this.
I have often wondered how much it costs bus companies to have those computerised ticket machines for a start. From time to time they upgrade the equipment on every bus. From time to time, they reprogram them all with new prices. Big companies have people whose job is devoted to pricing structure. Sometimes there is even a whole department allocated for it. This all costs money and has to be funded somehow.
Then there is the time taken for getting on and off the bus, which slows down the journey a bit. But what really slows things down is the buying of the tickets. Noone knows the price, not even the driver sometimes, partly because it keeps changing, partly because there are often so many special deals. Which is the same reason people don’t have the money ready or the right change. Sometimes it takes a while for the driver to work out where the passenger wants to go before he can determine the price. So a lot of the day, the bus is stopped at a stop and not actually moving people from A to B. A bus not moving is a bus not earning money. This loss has to be funded somehow.
It is as if the actual transaction itself has become the main cost. And this happens outside of the bus world too. Take a can of beans for example. A large can is twice the number of beans, but only costs a few pence more. Which means that the beans themselves cost very very little, a few pence per small can. What you are mostly paying for is something else, the transaction itself, the packaging, the handling, and the marketing. Each product is individually packed, tracked, and stacked, and that costs far more than the actual stuff inside the packaging which is what you really want.
And when the supermarkets offer you 2 for 1, it is not that generous really. It costs them very little extra to give you two. Any wholesale purchase is significantly cheaper, which shows how much markup is due to other things that are nothing to do with the product itself.
Suppose buses were free for everyone? They would be much much cheaper to run, because you wouldn’t have the cost of running the ticket and pricing systems. And they would be faster because they wouldn’t stop for so long. No ticket machines, no pricing departments, no threatening notices about going to prison for not having a valid ticket. Probably wouldn’t cost the government any more than reimbursing the bus companies for free tickets for pensioners.
(See earlier post: The Gift Economy)