Competition and innovation in land transport - André SCHWÄMMLEIN - Flixbus - November 2016 OECD discussion
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This presentation by André SCHWÄMMLEIN, Founder and Global MD of Flixbus was made during the roundtable discussion on competition and innovation in land transport held during the 62nd meeting of the OECD Working Party No. 2 on Competition and Regulation on 28 November 2016. More papers and presentations on the topic can be found out at www.oecd.org/daf/competition/competition-and-innovation-in-land-transport.htm
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Competition and innovation in land transport - André SCHWÄMMLEIN - Flixbus - November 2016 OECD discussion
- 1. Bus deregulation in Europe November 2016
- 2. 1 Past Flixbus is Bringing Bus & Mobility Services to the 21st Century Today: FlixBus – The New Mobility Experience Bremen Amsterdam The Hague Brussels Paris Luxembourg Essen Dusseldorf Frankfurt Zurich Stuttgart Rome Barcelona Switzerland Hamburg Berlin Hannover Dortmund Cologne Nuremberg Dresden Prague Vienna Budapest Copenhagen Slovenia Romania Poland Ukraine Slovakia Austria Croatia London
- 3. 2 How FlixBus Works Customers 250+ Bus Partners >35 Mio. Happy customers >5.000 drivers >1.000 buses
- 4. 3 Busses compete primarily with cars and trains and are most attractive for easy, modern and cheap travel Busses offer a great alternative to people with lower income, students and older people Alternative means of transportation Major reasons to chose bus 9% 20% 18% 12% 15% 7% 10% 24% 10% 28% 17% 16% 16% 12% 12% 23% 35% 17% 26% 31% 9% 0% 20% 40% 60% 80% 100% Germany CEE France Italy I wouldn't have made this trip Car (own car or driven by …) Car sharing Another bus company Regional train Intercity rail Airplane 87% 41% 20% 17% 15% 13% 12% 9% 8% Attractive price Direct connection WiFi on board Nearby station Frequency Comfort Short travel time Environmentally friendly Safe
- 5. 4 Innovation in bus travel strengthens public transport Deregulation created higher demand in public transport… … along with better offer on rail • Attractive prices also offered by state railway • WiFi offering introduced after example from busses • Punctuality initiative and quality improvement • Network expansion announced after decades of decrease • Technology investments to improve customer experience (apps, booking, …) 100 110 120 130 140 150 160 170 180 2012 2013 2014 2015 2016 forecast MioPassengers Long distance rail Long distance bus
- 6. 5 European deregulation still with untapped potential Deregulated Protective regulation Not accessible Not an EU member state/ contingent accessibility State of deregulation • Some major countries pushed deregulation to foster economy • Further deregulation on hold besides Switzerland • Authorization processes in all countries time consuming and highly inefficient • European cross-border traffic deregulated but with most complex authorization process
- 7. 6 Many regulatory challenges even in deregulated markets Regulatory challenges destroy value for travelers, bus companies and tax payers Weak infrastructure in cities • Low share of cities with proper bus terminals • Wrong decisions on bus terminal location in young markets • Infrastructure monopolies threaten customer value Complex application processes • Lengthy discussions with authorities and formalities • Long process time destroys values for customer and companies • Low flexibility for changes Intense paperwork & border control • Huge amount of documentation in paper needed • Authorities on the street not knowledgeable on regulation • Boarder controls create huge delays State subsidies for competitors • State railways with aggressive attacks on private companies • Losses are compensated by subsidized rail business • State railways tries to change regulation against bus companies
- 8. 7 Innovation and deregulation in bus travel creates huge positive effect without costs for governments Public transport in bus and rail gets more attractive against cars Positive environmental impact from bus travel as the most efficient way to travel and save CO2 emissions Thousands of new permanent jobs and in many cases in economically weak regions Millions of tax from VAT and other taxes as well as social security payments Increased travel cross-border and higher cultural exchange across countries Totally free for governments