My defence to Private Eye
I’ve always liked Private Eye.
Partly I suspect it dates from the only time I’ve ever been inside a courtroom. I was 16 and had an inset day from school. By coincidence, my mum, who was an editor at the BBC, was due to take the stand at the Royal Courts of Justice in a libel trial that day.
Have I Got News for You was being sued by the Tory MP Rupert Allason after they described him as a “conniving little sh*t”.
My mum was a witness for the BBC.
(I also got to see Mr Allason’s lead character witness who, rather tragically, was his mother, who confirmed that she thought her son was not a conniving little sh*t.)
It was the final day of the case, which Mr Allason lost. So I got to spend the evening in the pub with the BBC’s legal team. The Tory MP, meanwhile, had spent a small fortune proving in a court of law that he was, indeed, a conniving little sh*t.
While Private Eye and Have I Got News For You are not the same thing, the common thread of Ian Hislop has always tied them together in my mind.
So it was something of a rite of passage, last month, when the company I lead got a pasting in Private Eye.
Oh Dr B-Ching
The column was, of course, the B-Ching transport column.
The article appeared to take objection to Snap’s participation in the Government’s abortive attempt to run Christmas coaches for the abandoned bubble season.
Overall, much of the article is a perfectly accurate description of Snap. I’ve always been impressed by the fact that, even if you don’t always agree with Private Eye, it’s factually sound.
How many cherries?
But the criticism of cherry-picking is not appropriate for the coach market, as the coach market is entirely liberalised.
I used to work at open-access operator Wrexham & Shropshire, and understand why open access rail operators are prevented from cherry-picking profitable rail franchisees’ services. Franchises have public service obligations so it would be inappropriate for an open-access operator to cherry-pick the profitable routes, as that would leave the unprofitable routes, which the franchisee would still have an obligation to operate without cross-subsidy.
But the suggestion of cherry-picking in this context implies that National Express is run such that unprofitable routes are cross-subsidised by profitable ones. But National Express has been a private company for 32 years, and every route is required to make a profit. I should know: before I joined Wrexham & Shropshire, I used to run the network planning team at National Express. The idea that National Express will keep a loss-making route in one location because it has a profitable one elsewhere is no more true than the idea that Pizza Express would keep open a loss-making branch in, for example, Woking because it has a profitable one in Windsor. It simply doesn’t happen.
Snap competing on the core intercity routes (on which National Express makes very high margins) will have no impact on the decision whether to retain marginal cross-country routes on which there is no competition.
Get out of our monopoly
Transport. Monopoly.
Indeed, the tenor of the article is that it is inappropriate for Snap to compete with National Express and Megabus at all. It implies that National Express and Megabus should, in some way, be protected from competition. But NX and Megabus are both private companies and it is rarely a good idea for private companies to be granted a free pass from competition.
Moreover, any new competitor must start somewhere. In the article, Megabus is treated as one of the incumbents for whom it was reasonable for the Government to deal. But 15 years ago, Megabus was new and was cherry-picking National Express routes, one at a time. If you look at the Megabus route map today, it is basically a map of National Express’s most profitable routes. The article implies that Megabus should be protected from Snap’s cherry-picking; but Megabus only exists because of Megabus’s cherry-picking!
On that basis, Megabus should have been prevented from its behaviour in the mid-2000s. But the logic of that would be that National Express should have a monopoly, free from all competition. Given that NX was privatised in 1988 and floated on the stock market in 1992, deliberately engineering a monopoly for a listed company in a service industry is a recipe for high prices and poor service.
Indeed, having worked at National Express during the period Megabus launched, I saw firsthand how new competition resulted in lower fares, better quality and (here’s the amazing alchemy!) no reduction in either revenues or profits for National Express.
Competition grew the size of the cake; it turned out there wasn’t just one cherry.
Why Snap and why competition?
I founded Snap because I felt that intercity transport could be better and cheaper. From a background in corporate transport, it’s a big decision to found a startup. The easy option is to stay in the corporate world of the very monopolies that the article implies I shouldn’t challenge. But I’m very proud that Snap has achieved the highest customer satisfaction of any intercity transport service and offers the lowest fares.
Prior to the pandemic, I spent my weekends travelling on Snap coaches, talking to customers. The most rewarding conversations were when I spoke to someone who was able to make a journey that they simply would have been unable to make otherwise. Offering travel for £20 return (compared to £40) can be the difference between someone seeing their family this month, and them not. I’m proud of that.
I even spoke to people who had been able to take jobs they wouldn’t otherwise have got as a result of Snap competing. That’s worth some cherry-picking.
