CCS advises SSTA to take remedial action on its recommendation of a fuel surcharge

Media Statement Issued on 1 August 2008:

CCS has met with the SSTA on its recommendation of a fuel surcharge to its members. CCS has advised them to take appropriate remedial action. We understand from SSTA that it has since clarified its position with its members.

CCS has no objections to fare increases per se, as long as these are decided independently by the individual bus operators.

CCS holds the view that price recommendations or guidelines tend to restrict independent pricing decisions. The circulation of such recommended prices by a trade association, even if it is non-binding, is likely to prompt industry players to cluster their prices around, if not exactly matching, the recommended prices. This is not helpful to free competition.

It has been argued that price recommendations prevent over-charging by letting the customer know what the market rate is. However, in reality, price recommendations may not prevent any errant seller from over-charging. Rather than relying on a price issued by the association, it is better for the customer to find out about different rates before deciding on the best deal for himself.

CCS understands that the school bus operators are selected periodically by school committees based on several criteria including competitive bus fares. There is therefore a competitive process for the most efficient and responsive school bus operators to be selected. There is no necessity for any price guidelines to be issued.

CCS will continue to monitor the situation. If it has reasons to suspect that prices are being coordinated among school bus operators, it will commence investigations.