I strongly support the MTO's…

I strongly support the MTO's plan to remove regulatory barriers to entry in Ontario's intercity bus market.

Answers to proposal questions:

1. Market entry controls need to be removed. The current system of OHTB regulation is outrageous. See my comments last year in my blog post: https://www.cameronhuff.com/blog/ontario-good-luck-starting-a-bus-company/. Ontario needs to have a modern, competitive economy. The benefits to the public of market forces are clear and we don't need 1920's era regulation.

2. The benefits are cheaper service, more service, and service that aligns with customer demand. Every first year economics student knows that monopolies are bad for consumers and that regulatory barriers reduce competition. The current system only exists due to a lack of political power: rich people don't ride buses. MPPs don't ride buses. I doubt many MTO staff who work on regulating buses ride buses. If they did, the sector would have been modernized years ago. Most passengers are elderly people, students and people who can't afford cars.

The drawbacks of removing market controls will be that service will likely suffer in areas that are not economical although these places hardly have good bus service as it is.

3. Vehicle safety requirements and insurance levels should be set at a level that allows poorly capitalized entrepreneurs to start a service. It's already happening right now with illegal van services, Uber, and other unlicensed transportation schemes. If this proves to be an actual problem down the line then the system can be changed but the initial position should not be heavy-handed regulation based on speculation. Modern vehicles are quite safe. If anything the focus should be on the drivers and their licensing (e.g. complaint-driven investigations).

4. N/A

5. If transportation services were deregulated then municipalities and social/health organizations could purchase transportation services on a market basis. A competitive economy with multiple providers will lead to huge savings for government payors.

6. Low-cost providers like HolaBus on the eastern seaboard in the US are worth looking into. But the best systems to look at are those of less developed countries (with less regulation tilted to incumbents). I suggest looking at the Chilean bus system and the “tro tros” of Ghana: http://www.ssatp.org/sites/ssatp/files/publications/Presentations/UrbanTransportServices-Accra.pdf.

7. Other thoughts:

The proposal does not address access to bus terminals. Regulatory reform should address this issue. How can terminals be converted to competitive marketplaces?

Licensing of routes and companies should be eliminated. Anyone should be able to run a bus service in Ontario provided they meet a certain standard (and perhaps registration) but there shouldn't be a requirement for a special license. Licensing is a significant barrier to new entrants. Even a light touch licensing scheme would still discourage many entrepreneurs, especially recent immigrants who may find navigating the Ontario legal/bureaucratic system challenging.

Could this regulatory reform go further and include intra-city transportation? Uber is already operating UberHOP in Toronto.

The OHTB should be eliminated. Ontario doesn't need boards to regulate its economic actors. Board control of many other sectors of the economy has been eliminated over the last 75 years.

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My specific thoughts on the proposal have been published online here: https://www.cameronhuff.com/blog/thoughts-ontario-intercity-bus-reform/index.html

My general thoughts from May of 2015 on the issue of bus reform in Ontario (preceding this proposal) are here: https://www.cameronhuff.com/blog/ontario-good-luck-starting-a-bus-company/

[Original Comment ID: 194120]