Undercutting the competition? 

Am I too suspicious?

Source: Undercutting the competition? – The Zimbabwean

Whenever something new is introduced with the support of top people, I tend to ask myself “Now how does he (or she) benefit from this?” So I wonder about their current enthusiasm for introducing 60-or-more-seater buses on urban routes. How do they benefit?

We, as passengers, know that we benefit every time we can get a seat in one of those buses but let’s look at the long term. The number of those buses is increasing, and the fares are subsidised, so who is paying for that? And how long can it last? The answer to the first question is that we pay the subsidy through our taxes. To answer the second question, we need to ask “How do they benefit?”

Do they perhaps own a lot of these buses? In that case, I ask if this scenario is likely:

Subsidised buses will increasingly replace the existing kombis because kombis aren’t subsidised so they could never go back to a dollar or $2 fare from, say Mbare to town. Maybe when the big buses provide all the transport on key routes, or maybe when they have secured a monopoly in Harare, the subsidy will be removed. After all, government have more important things to spend our money on, like equipping hospitals and schools. They can’t afford, and we can’t afford to keep paying the subsidies unless by some miracle having cheap bus travel starts an economic boom because we can now all afford to travel to work. Cheap transport would help, but it is not enough to encourage employers to reopen all Harare’s derelict factories. Our ever-resourceful Minister of Finance might have a secret master plan for the revival of industry; he might, but do you think it is likely?

More likely, it seems to me, is that when most, if not all, the kombis have been put out of business, the subsidy to “ZUPCO” stops. Then those buses will start charging fares that cover their costs and still give them a profit. Who gains from that?

The bus owners will have secured themselves a nice fat income from a captive market, so they gain and it’s a big gain because they have cheap fuel. We might gain something if the new fares are still lower, but compare them with the price of a bag of upfu or of sugar; remember that a bus fare of, say $6 bond replacing a kombi fare of 8, will have to increase to 8, then 10, then 15 and so on to keep up with inflation. So we can’t guarantee that the buses will be cheaper than the kombis we use now. We might lose time travelling, when we need to wait for 80 ot 100 people to fill the bus instead of the 22 who fill a kombi. We are unlikely to gain time because these buses do not move faster than the kombis.

So the bus owners are the only ones who gain. The kombi owners lose, unless they are rich enough to buy a fleet of buses. A few with police connections might be able to do that. A number of small fry cops among the kombi owners will lose their “side” income, which may well be their main one now. Is this the plan? That a new group within present ruling circles are not satisfied that they have clipped the wings of the cops thoroughly enough to remove any threat they might present to the bus owners’ group?

I’m only asking. Do readers have any answers? Or am I asking the wrong question; do these rivalries among those already on the gravy train help us at all?