High-Speed Trains Give Way to Cut-Rate Buses in Macron’s Franceby
Law has had little impact on growth so far, economists say
Almost 4 million bus passengers transported in first year
It’s 8 a.m. at the height of vacation season in a parking lot on the western edge of Paris. A few hundred people are dragging around luggage as they hunt for the coaches that would take them to Toulouse, Biarritz, Amsterdam and beyond.
Bus travel in the country that popularized high-speed trains is booming, with almost 4 million passengers transported in the past 12 months and companies expecting the number to double in the next year.
Optimists in France point to the deregulation legislation pushed through a year ago by Economy Minister -- and possible presidential candidate -- Emmanuel Macron and say growth isn’t impossible. One of the changes in the package known as “Macron’s Law” included liberalizing intercity bus services.
“It’s an important symbol,” Christopher Dembik, chief economist for Saxo Bank’s French unit. “It’s something that can send a positive message to international investors.”
The law abolished limits on long-distance bus travel, made it easier to obtain a drivers license, and deregulated some professional fees. It also allowed more Sunday shop openings.
Until a year ago, the SNCF national railroad had a monopoly on all domestic transport of more than 100 kilometers (62 miles). In the first two months after the law was passed, 250,000 people had traveled on France’s newly opened bus routes, growing to more than 3.8 million in the first year, with 3,300 departures a day and 1,500 jobs created, according to Macron’s ministry. He has said that 22,000 jobs could be created by bus travel by 2025.
The law has been a success, Macron said in an Aug. 5 statement. “One year later, and everywhere in the country, things have changed,” he said. “Bus lines have opened and allowed millions of French to travel.”
Still, it’s capitalism with French characteristics: Two of the three bus companies that dominate the markets are government owned.
FlixBus, which is based in Munich and was founded in 2013 when Germany deregulated its own market, is the biggest; next is Ouibus, a unit of the SNCF. Number three is Isilines, a unit of Transdev, which is 60 percent owned by state holding company Caisse des Depots et Consignations.
Isilines spokeswoman Isabelle Pons said the company receives no government subsidies. Ouibus said it doesn’t receive subsidies and expects to break even in two to three years. While FlixBus’s French operations are expected to hit break even in 2017, Isilines hopes to be profitable within one or two years.
There’s plenty of ground to make up. The economy has barely grown since Francois Hollande won the presidency in 2012, promising to fight big finance, raising taxes to 75 percent for top earners and cutting the retirement age for some. Last year, gross domestic product expanded just 1.3 percent, the most since the Socialist took office.
He’s the most unpopular president in French history, having spurned centrist voters with his initial policies and then losing the support of much of his Socialist Party base with a 2014 U-turn that saw him cut payroll taxes, move to loosen labor protections and roll back the 75 percent tax rate.
It will take more than tweaking around the edges to turn things around. Macron’s 2015 package was “important for the image it projects and as a trial balloon for further reforms, but the actual growth impact is marginal,” said Philippe Waechter. chief economist at Natixis Asset Management in Paris.
In the meantime, authorities need to catch up to buses’ new popularity. The long-distance station at Paris’ Porte Maillot convention center has no shelter, no toilet, and nowhere to sit.
“You’d think you’re in Cairo, not Paris,” said Gourdain.
Gourdain said up to 40 percent of FlixBus’s passengers wouldn’t have traveled at all if it hadn’t been been for cheap bus tickets. Tickets are particularly popular for young people, and on night routes, which the SNCF is increasingly abandoning, he said.
This month, FlixBus was offering tickets at 15 to 40 euros for the next day on its six daily departures for the six-hour ride from Paris to the western city of Nantes. Ouibus offered fares from 22 euros to 29 euros on its six trips. Isilines asked 19 euros for seats on its two departures. The cheapest train ticket was 66 euros, but the trip takes half as long.
Gourdain said the lack of proper bus stations in many cities could limit growth. “In a few years it could create a bottleneck,” he said.