Microeconomics steering the Mancunium buses

 

Introduction

If you’ve been in Greater Manchester over the past few years, you may have noticed in passing that, much like bananas, many of the buses have been slowly turning yellow. You may also have heard that, thanks to the Bee Network, the bus services in Greater Manchester have finally been publicised again. But what does that mean for you, dear reader? Have you ever wondered why so many people hated privatised public transport, how the Bee Network ensures its bees get to you (relatively!) on time, and the hidden economics behind it all? These are essential questions: the more we know about our public services, the more informed we are the next time we vote or read about a new policy.  

Principal-Agent

Greater Manchester's Bee Network has majorly transformed the way our public transport is governed, with what economists might call a principal-agent relationship. Let’s break it down: simply put, the principal in this scenario would be the public authority that has to decide policy goals and ensure efficient services for us. In this case, it would be Transport for Greater Manchester, TfGM. Meanwhile, the agents are the private bus operators who have been contracted by TfGM to run their services accordingly with TfGM’s strategic directions.

Historically, when buses were privatised post-1980, transport services were a headache: they were splintered, had less coordinated timetables and poor inter-modality information (these might mean schedules, maps or information desks) between routes (BBC News, 2023). Since private bus companies were not regulated by the government and told to do their own thing, this created a problem where operators (agents) maximised profits-driven objectives (e.g., priority on high demand routes) versus more general public welfare objectives like connectivity, affordability and for environmental concerns (Vickers & Yarrow, 1988).

To solve these issues, the Bee Network was introduced in Greater Manchester with a single goal: to take back public transport services under local control and better help the people instead of chasing money (Greater Manchester Combined Authority, 2023). TfGM followed a franchising model to achieve this: private operators would still run the buses. However, they were now awarded contracts by TfGM as they saw fit and were overseen and regulated by the principal. And wouldn’t you know it, with better regulation and our best interests in mind, the Bee Network massively improved their services and passenger experience (The Guardian, 2024).

This shift strengthens delegation effectiveness, ensuring public transport services better serve passengers. The key to the Bee Network's success is better accountability. By establishing the principal-agent relationship, we ensure that these operators are doing what they’re supposed to, not just whatever makes them the most money. We can see precisely how this is achieved with incentives.

Incentives

By aligning the incentives of Transport for Greater Manchester (TfGM) and private bus operators, the Bee Network can create an efficient system even without the stern regulations.

There are multiple layers of principal-agent relationships within the Bee Network, and in each one, the agent is incentivised to do as the principal requires or wants. For example, how does each operator incentivise their bus drivers not to shirk their duties and not get chewed out by TfGM? They increase the pay for bus drivers, ensuring that they are monetarily incentivised to provide a comfortable riding experience by increasing their stake in the network performance. In a similar vein, how are operators incentivised to provide a quality service even if it isn’t the most profitable option?  Well, contracts are awarded based on service quality, reliability, and value for money, with performance-based incentives encouraging operators to prioritise punctuality, cleanliness, and customer satisfaction (Operators Confirmed to Run Remaining BEE Network Bus Services, 2024). 

By ensuring each agent is properly incentivised while leveraging private-sector efficiency, the Bee Network strikes a balance between accountability and performance. This prevents the fragmentation of deregulated systems while avoiding inefficiencies often seen in full public ownership. The result? A more innovative, more connected, and passenger-focused transport network that enhances both efficiency and public welfare.

Welfare Economics 

When we hear "welfare," it's not just about economics — it's about a more profound question: Are we, as individuals and a society, better off than we were yesterday? From our experience, the answer to that question is a definite yes. The centralisation of Manchester's buses under the Bee Network has been a game-changer for students, capping bus fares at £2 per hour (Spina-Matthews, 2024). Previously, paying separately for each ride strained our limited budgets, but now the affordable, hop-on-hop-off system makes travel far more convenient and cost-effective. The Bee Network checks off some crucial boxes from a welfare economics viewpoint. The Bee Network drives allocative efficiency by reallocating buses where communities genuinely need them, rather than merely servicing profitable routes. It also introduced 405 new yellow buses in early 2025 to meet the growing demand (Team & Team, 2024). Under the old deregulated system, operators crowded the lucrative routes while many areas were left underserved, resulting in wasted potential and unhappy customers, or what we might call deadweight loss. Today, the new model smartly reallocates resources across Greater Manchester. And if we dive into textbook territory, it moves us closer to Pareto efficiency: many, especially students and low-income riders, are better off with simpler fares and more reliable services, while no one ends up worse off. So next time you catch your 8:45 AM bus and make it on time for that 9 AM class, take a moment to appreciate Manchester's bold vision. By centralising bus services under the Bee Network, the city council hasn't just improved timetables—they've transformed everyday life for all of us. That's the real buzz bee-hind the Bee Network, an efficient system that makes our lives easier.

References:

BBC News (2023) ‘Greater Manchester’s Bee Network: What it means for public transport’, BBC News, 22 March. Available at: https://www.bbc.co.uk/news/uk-england-manchester-63006058 (Accessed: 01 April 2025).

Greater Manchester Combined Authority (2023) ‘Greater Manchester reclaims control of buses with historic Bee Network launch’. Available at: https://www.greatermanchester-ca.gov.uk/news/ (Accessed: 01 April 2025).

Operators confirmed to run remaining BEE network bus services. (2024, March 28). Transport for Greater Manchester. https://news.tfgm.com/press-releases/205c2839-4113-45b1-bc8e-066113ffef29/operators-confirmed-to-run-remaining-bee-network-bus-services

Spina-Matthews, S. (2024, October 29). Greater Manchester bus fare cap to stay at £2, mayor confirms. BBC News. https://www.bbc.co.uk/news/articles/cz6jlze96elo

Team, R., & Team, R. (2024, December 13). 25% of Bee Network buses electric by end of April 2025: TfGM. Routeone. https://www.route-one.net/news/25-of-bee-network-buses-electric-by-end-of-april-2025-tfgm/

The Guardian (2024) ‘Manchester’s Bee Network introduces tap-in travel on buses as well as trams’, The Guardian, 22 March. Available at: https://www.theguardian.com/uk-news/2025/mar/22/manchester-bee-network-tap-in-travel-buses-trams (Accessed: 01 April 2025).

The Times (2024) ‘Manchester’s buses are creating a buzz - but can they cut pollution?’, The Times, 15 February. Available at: https://www.thetimes.co.uk/article/manchesters-buses-are-creating-a-buzz-but-can-they-cut-pollution-m87mkqvcj (Accessed: 01 April 2025). Vickers, J. and Yarrow, G. (1988) Privatisation: An economic analysis. Cambridge, MA: MIT Press.