(12 Apr 2020, 2:16 pm)Dan wrote Are you forgetting about the fact Go North East's bus fares have been largely frozen (if not reduced!) for the past two years? Very few people are paying more for their bus fares now, compared to two years ago.
I believe streetdeckfan shared an insight into Go North East's profitability recently. Certainly not making a head-turning amount of profit. So, if incentives such as BSOG weren't there and the company wanted (or needed!) to maintain existing levels of profitability, I don't think they'd be in a position to freeze and/or reduce bus fares as they have done for the past two years.
Two years of freezes, as opposed to how many years of increases - despite the BSOG?
You will have seen the above inflation price increases quoted in the pricing thread - despite the BSOG, the increase in more fuel efficient vehicles and the fall in hedged fuel prices.
I am sure it would be more than viable to operate services without BSOG.
After all many other businesses manage without grants and continue to turn a profit.
They price to suit their audience too.
Within the pricing thread, there are links to all sorts of models and theories relating to pricing structures, elasticity, inelasticity etc.
I won't repeat it all in this thread, but it goes without saying that lowering prices doesn't always affect profit levels in a negative context. It can have quite the opposite effect.
Edit. There's many an update to this, but shared this specific link a couple of years back.
Eye watering...
https://www.gov.uk/government/publicatio...incentives