International comparisons of bus licensing

Based upon a doctoral research programme which surveyed bus and coach licensing systems throughout the world, this article seeks to arrive at a taxonomy of licensing. It identifies the familiar principles of quality, quantity and price control, examines them against the British licensing system introduced in 1930, and concludes that quantity control forms a more or less permeable barrier to contestability in the market for public road passenger transport; where it is strong, it is a constraint upon the sustainability of the market. It defines the British and the many similar licensing systems as arbitrational, and contrasts this characteristic with systems which are overtly based upon the allocation of a franchise.

The central section of the paper analyses various systems in more detail, and warns against too great a dependence upon the letter of the law. Much depends upon the ways in which regulations can be interpreted, and cases exist where practice contradicts the statute. There is found to be a division between arbitrational and franchise systems that is broadly the same as the division between countries with a Common Law background, and those with a Romano‐Germanic polity. Franchise is however common in the control of urban transport in countries where the extra‐urban system is arbitrational.

Franchise systems are further defined as being either concessions, or subcontracts. The significance of the franchising authority is examined. The final section sets out the issues of principle that appear to follow from this analysis, and stresses the importance of the distinction between arbitration and franchise for the understanding of licensing and control.