Reading transport : The right route
Published : May 2008
James Freeman, chief executive officer, and James Carney, finance director of Reading Transport ltd talked to Jayne Flannery about a business model that offers the potential to transform the future of the city of Reading
Reading Transport ltd is better known simply as Reading Buses, which is the major part of the business. Each year, a team of 500 people are responsible for providing 10 million kilometres of road travel using over 200 buses.
The company is wholly owned by Reading Borough Council. This, say its directors, is what makes it special.
“Ownership is a key difference from our point of view,” stated James Freeman, chief executive officer. “We are one of very few bus companies that belong to the municipality in which they operate.
Fifty years ago, this was quite normal. Now there are just 13 such companies left across the country.
Those which remain are, like Reading Buses, almost entirely subsidy free and self-sufficient.”
The business is run as a solid commercial proposition, but has primarily social objectives. “The Borough Council expects two types of dividend,” explained James Carney, finance director.
“Firstly, there is a modest cash dividend, which is returned to the people of Reading. Then there is the social dividend in the form of an outstanding public transport system that people want to use more frequently. Our first priority is patronage, the second is profit. It is a very different business model from that employed by private sector owners who simply seek to maximise profits, which can then be passed on to shareholders.”
If Britain’s towns are to avoid gridlock and a descent into urban chaos, then an alternative to travel by car has to be found. Most people now recognise that public transport is a more environmentally friendly choice. But they will not make the switch unless there is a convenient, efficient and comfortable alternative, which is also affordable.
This is the service that Reading Buses has tasked itself with providing. “Our aim is to bring together the lowest levels of fares with the highest level of investment to provide the best possible travel experience,” he added. “We have a strategic plan to position bus travel not only as an alternative to car usage, but as a better alternative,” continued Carney. “We have set out to remove the barriers and rational reasons why anyone in Reading would want to avoid using the bus. The first question is typically, `which bus should I use?´ Our response has been to paint our buses in one of 12 vivid colours, each identified with a particular route. The second question is `what does it cost?´ All our fares are a standard £1.50.
Then everyone needs to know when the next bus is due, so all our bus stops display real time information on waiting times.”
Reading Transport is already set apart by the modernity of its fleet. One hundred per cent of buses already conform to new accessibility legislation which will take effect in 2015. Both directors feel this element of inclusivity is very important. There has also been a big investment in ethanol powered buses and there is a strong interest in other cheaper, cleaner energy forms. Currently the company is engaged on a programme of research with Reading University to firstly measure and then reduce its emissions. “When our customers start making lifestyle choices we want to be able to offer the most carbon frugal buses. We are also very aware of the threat of peak oil,” said Carney.
James Freeman joined the company last summer. What excited him was the opportunity to achieve real and lasting change. “It is not just a pipe dream. We can make a real difference to the quality of people’s lives and the environment. Reading is a city where buses can be a feasible solution to sustaining a town that is a pleasant and civilised place to live,” he said.
He believes that the support of the Borough Council has contributed to the company’s success in many ways. “For example, over the years, the Council has worked hard to allocate space to bus lanes so we can be more reliable.
We would still like to see more, but the existing provision is an incredible bonus in enabling us to operate city centre routes within a dependable timeframe that our customers can rely on,” he explained. In return, he believes that the company has a major role to play in enabling the Council to balance pressures on existing roads with the demand for new development. “A superior bus service enables development to take place without gridlock.
Politically, it also means that the public are less likely to turn on politicians for being denied the freedom to use their cars in some parts of the town, because there is a highly efficient alternative,” he said. Politicians of all colours now have a service they can be proud of. In turn, he believes that this has secured the company’s future, safeguarding it from any possibility of a sell-off. “The Conservative party has traditionally opposed public sector ownership of transport, but even if they come to power locally, they have stated that they will retain it within the ownership of the municipality.”
The local community has demonstrated its appreciation in many ways. One of the most obvious manifestations of good-will is the hundreds of applications for every advertised vacancy. “We have positioned the company as one that people want to work for and we are determined to reverse the perception that driving a bus is a marginal occupation.
Bus drivers are essential public servants doing a vital job. They are single-handedly responsible for the safety of hundreds of people each day and deserve our respect,” said Freeman.
At present, bus travel is growing by two per cent per annum, but he believes the best is yet to come. “We recognise that we have made many achievements, but the conversion of motorists to public transport is still at an embryonic stage. If you ring us in a few years time, we hope to see passenger figures climbing by 10 per cent,” he added.
