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Losing Greyhound may impact city transit

The news that Greyhound Canada is planning to shut down virtually all of its Western Canada routes and those in Ontario west of Sudbury may have been somewhat unexpected, but it probably can not be considered shocking.

The news that Greyhound Canada is planning to shut down virtually all of its Western Canada routes and those in Ontario west of Sudbury may have been somewhat unexpected, but it probably can not be considered shocking.

It’s been nearly a decade – just a couple months short of nine years – since the company first tried to get out of the passenger bus business in Manitoba in 2009, only to be lured back with an agreement from the province’s NDP government that included cash subsidies and persuaded the company to keep most of its routes, though some were shut down and many others, including the Thompson to Winnipeg route, saw reduced frequency in the years that followed. This time, there’s probably good reason to believe that the fact that the company is taking even more drastic measures is an indication that pretty much nothing any government can offer it will be enough to make it change its mind, unless they can somehow force their citizens to take buses, something they’ve proven unwilling to do when it requires paying money out of their pockets, or even sometimes out of someone else’s.

Like any business, Greyhound Canada faces a conundrum when it comes to declining ridership, which the company says is down more than 40 per cent in the last eight years. You can raise prices to try to cover the costs of operating routes in the hopes of at least breaking even, but economics teaches that increasing prices, especially on something that’s not absolutely necessary, will likely result in even fewer people purchasing that good or service, which will then require you to raise prices even more and perpetuating a self-destructive cycle of fewer and fewer buyers with every subsequent price hike. As it is, with a one-way ticket to Winnipeg now running $136.50, most likely all you have to do is find one person to share a ride with you and the cost of gas will be half as much, even in a gas-guzzling SUV with a V8.

The other option, which Greyhound Canada never seems to have tried, is to reduce costs to the point that much larger numbers of people decide to shell over cash for whatever service you are providing. It seems counterintuitive that reducing prices could actually make something more profitable, but certain costs, like those for equipment and a driver and fuel, won’t change much regardless of how many people are on board and if you could convince enough people to start using your service again, it’s possible, though not necessarily likely, that you could start making money again. On the other hand, you could just end up losing a lot more if price isn’t the thing that’s keeping people away and it’s hard to risk a whole company, some areas of which may still be profitable, on an experiment to turn around those areas that aren’t.

Greyhound’s decision will certainly have a negative impact on those who rely on its freight services, as well as those who have no other means of getting down to Winnipeg for medical appointments, for example. With one fewer option to offer people travelling for medical reasons, it will likely mean that the provincial government will spend more transporting northern patients, and there will also be a loss of local jobs, including drivers and station employees. It could even impact the City of Thompson, which will have to hire its own bus drivers rather than contracting the service out to Greyhound as it has since the company bought Grey Goose. Prior to  signing a five-year agreement with the company in 2010, the city looked at operating transit on its own and concluded that it would require storage facilities, a minimum of four full-time drivers, mechanical support and additional equipment such as bus hoist for maintenance. That will be a big question in the coming months: can the City of Thompson, which is already feeling financial pressure as the result of Vale lowering its grant-in-lieu payments significantly such that property taxes increases of as much as 10 per cent have been theorized, afford to provide public transit anymore if Greyhound is no longer around to carry the load?

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