Evolving with the times

Gareth Evans talks to Ralph Roberts, Managing Director at McGill’s about the latest development at the Scottish independent operator – including DRT and ticketing, which he describes as the next big revolution

Ralph Roberts, has spent his working life around machinery and operations of one kind and another.

The 55-year-old remains firmly down to earth – some might say that is a typical trait of someone with an engineering background. As a journalist, I know Ralph can be relied upon for a straight answer, something that many people respect him for.

Career

Ralph started in the industry as a Scottish Bus Group engineering management trainee with Eastern Scottish in the Edinburgh area in 1979. [wlm_nonmember][…]

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“It was a four-year apprenticeship in two years, followed by three years at university – a frantic five years,” he recalled.

“With the coming of deregulation, efficiencies were being made. I ended up at Mobile Cranes, followed by Cotter Tours, a coach operator, where I was workshop manager for three years. After a spell with the Freight Transport Association as assistant regional engineer for London the South East, I worked for Rentokil Initial in the 1990s as divisional manager, where I operated the workshops across the UK.

“In the year 2000, I joined Arriva as engineering director in buses. I was a trouble shooter, including at Arriva Trains Wales, the Welsh rail franchise. There were issues accessing Cardiff Canton depot. They were great people, but there was a lot of nonsense. I got things moving.

“Similarly, at Machynlleth depot I had a highly committed team but they were struggling in an old steam shed. I managed to get group to invest in a new depot. There were a lot of problems at Chester depot too – with the Alstom class 175 units. I could speak French, so off to the manufacturer’s headquarters in Paris I went to get the matter resolved.

“I then looked at rail franchises in other European countries, including Portugal, Denmark, Sweden, Germany, Holland and Poland.

“I ended up keeping an eye on Arriva Scotland West (ASW) in 2007 as MD because I needed to be home for family reasons, although I was still involved in Arriva’s Polish rail operations.

“In 2010, Arriva was tight for cash. The group had to choose where to invest for the best return – something had to lose out. Then a chance discussion led to McGill’s.”

On the chapter of his life that he’s clearly proud of, Ralph said: “I have achieved at McGill’s what I wanted to deliver under Arriva – the rest is history.

“When I came to McGill’s, the operation consisted of 70 buses with 135 staff. It’s now 850 employees and 450 vehicles. There’s certainly been a lot of activity.

“I came here in 2010 and within 24 months, we had bought ASW. I had inside knowledge – I knew the people and the business. It always helps when you’re acquiring a business if you can have calm conversations – it makes life so much easier for all concerned.

“I’ve now been in the industry for 39 years. Good grief, I’m getting old…”

Business

It’s no secret that life for many operators is anything but kind, often reflecting the prosperity of the communities they serve and the changing trends in retail on the high street.

According to Ralph: “McGill’s is performing in line with others – it’s very hard going. Footfall in Scotland is falling, which is putting pressure on the business.

“Since the end of 2014, fuel prices have fallen, so people have returned to their cars. That’s been sustained for three years. We’ve tried to ride the storm with increased efficiencies as much as we can. We’ve also marketed a lot. It became clear in the third year that the majority of the problems were outside our control.

“That led to us engaging KPMG on behalf of CPT. We got First, Lothian and Stagecoach on-board and others. We needed to be able to influence politicians.

“Retail activity has shrunk 30%, which has a massive impact on the bus industry. Congestion leads to increased costs and trip times. Due to rising costs, revenue falls and bus operators are effectively forced to increase fares – and a vicious circle of decline can set in. For the first time ever, we’re having to cut services. It really is quite soul destroying to see something you’ve built get broken up.

“We believe the KPMG report will help to educate politicians and it is hoped it will lead to a Scottish version of the Bus Services Bill. To have respected independent research carried out by a neutral third party informs debates.”

On that note, Ralph said: “I’ve taken some politicians to task on Twitter. I’ve hauled them up about ‘hate talk’ such as ‘cherry picking routes,’ ‘profiteering’ and ‘bus barons.’ Those negative words are feeding out onto the streets, which is bad for public transport and retailers alike. We’ve all got to be positive.

“We all know Lothian is a very good operator, but that’s not because it’s publicly-owned – it’s because it’s fortunate to enjoy the respect and understanding of the local authority that if the bus company keeps getting hit with unnecessary road closures, it will lead to a reduced dividend.

“Of course, Lothian has the footfall too – in fact, it has four times what we have.

Glasgow also has the densest urban rail network outside London – the next city is Birmingham. There’s the underground railway in Glasgow too. That’s a big factor which drives footfall too. Edinburgh has a culture of bus use too.

“We all recognise Lothian is a great company. However, politicians don’t look beyond the first line of detail regarding public ownership.

“I’ve more or less accepted we need to change – especially when it comes to ticketing. The world wasn’t as small in 1986. What people want is like in Rome – a single carnet for bus and metro.

“Ticketing is our next big revolution. That journey’s yet to be undertaken. Someone has got to underwrite the risk. We’ve got a full array of tickets, including smartcards and contactless, which offer maximum convenience, but people need more than that.

They want a daily travel cap, but how do you make that into a viable business model?

“I chair the Scottish Smart and Integrated Ticketing Group. Speaking to the Scottish Government, I offered to turn over a network to account-based ticketing. They almost fell off their chairs.

“It will lead to a revenue drop of between 30 and 50%, but it will need underwriting.

They argued that it would lead to increased passenger numbers, but how many?

I said an increase in PVR (Peak Vehicle Requirement) may be required and that a cap could result in costs increasing to deliver to those additional journeys. For all that to square off, I would need 80% footfall. Reality dawned – we wanted an open cheque book.

“Rather than saying no it can’t be done, I thought it would be more constructive to offer to do it and explain the practicalities.”

Minibuses

McGill’s operates 15 Mercedes-Benz Sprinter-based Mellor Strata low-floor minibuses.

Explaining the background to the vehicles’ introduction, Ralph said: “Serving the community of Upper Skelmorlie haemorrhaged money with a traditional big bus.

“It got to the stage where there was nothing we could do. We decided to withdraw the traditional turn up and go service, but we didn’t want to leave the community stranded. We therefore opted to evaluate the potential of DRT (Demand Responsive Travel) which I’m pleased to report has led to a 50% increase in footfall.

“We’ve brought it closer to covering its costs – bearing in mind the capital required to fund a new vehicle. The service had historically been operated by fully depreciated vehicles.

“That success resulted in the expansion of DRT to two areas that had not previously enjoyed a scheduled bus service Upper Inverkip and Harbourside. That started on March 26.

“We know it works in areas that have previously had a traditional local bus service, so it will be interesting to see how it performs in virgin bus territory. We’re trying to innovate.”

Fleet thoughts

McGill’s boasts a substantial number – 50 of Mercedes-Benz Citaros. What is it about the German-made buses that makes them so appealing to a Glasgow-based operator?

“I believe we operate one of the UK’s largest fleet of Citaros,” enthused Ralph

“They’re solid and robust. It’s cold and wet up here. The windows on most buses steam up, but Citaros benefit from excellent heating, ventilation and air-conditioning. They don’t rattle and they offer a great ride. Drivers and passengers love them.

They’re powerful but great on fuel. Engineers like them as they’re robust. Yes, they are very expensive but we find quality sells. Citaros are not suitable for every route, however.”

ADL products make up the next biggest manufacturer in the McGill’s fleet. “For Euro 6, I feel ADL and Wrightbus products are both too costly,” said Ralph. “My fear is rising costs will increase risk of investing, so could the industry chose to extend the life of current vehicles.”

LEZ

Glasgow is set to introduce Scotland’s inaugural Low Emission Zone (LEZ) at the end of this year. It’s a hot topic politically, which also has an impact on the city’s bus operators.

Explaining some of the background, Ralph said: “A new local authority was elected last year – it’s SNP-led. The regime is being bold – it’s trying to tackle congestion.

The local authority is under pressure from groups such as Friends of the Earth, which has labelled it a ‘no ambition zone.’ We need to support them as much as we can, but at the same time, we’ve got a business to run.

“The bus LEZ will be implemented by a Traffic Regulation Condition (TRC), using powers in the Transport Act 1985. TRCs are made by the Traffic Commissioner (TC) – so Scottish TC Joan Aitken will be conducting a regulatory impact assessment of the proposal in the near future. With the local authority, we operators are trying to proactively support the TRC to the TC – I’m currently trying to re-write the TRC.

“We’ve got four years to meet the requirements of the LEZ – originally it was due to be the end of 2018. The timeline between now and 2022 is incremental compliance – operators cannot put it off. We as operators have to be 20% compliant by the end of 2018 and then it goes up in blocks of 20% each year, so that by December 31, 2022all buses in Glasgow will be low emission.

“Ordinarily, with a 15-year replacement cycle, Glasgow’s bus fleet would have been Euro 6-compliant by 2029, so the LEZ means that’s happening seven years sooner, so that’s quite some going.

“The zone will cover the central area, including the existing city centre Air Quality Management Area. The city’s main bus station, Buchanan Street, and access roads to it will be exempt in order to allow low frequency services operated by non-compliant vehicles to continue to serve the bus station.

“First is Glasgow’s largest operator. In the LEZ, First runs 650 buses – I’ve got 150. That’s the order of magnitude. The next operators are in their teens in terms of fleet impact.

“I’m cautiously confident we can cope so long as the Scottish Government has got funding in place to do retrofit.”

ALBUM

Asked whether he’s excited to host this year’s ALBUM Conference, Ralph replied: “Of course – but hosting any sort of conference is challenging on top of your day job. We had all the plans in place – we felt relieved that we were organised and ready to press the go button to take bookings. The venue, Cameron House on the banks of Loch Lomond, near Balloch burned down on December 19 – and two people tragically lost their lives. It took some time to gain clarity as to what would happen to bookings due to the investigation.

We then had to find an alternative venue – no mean feat at the time of year the conference was due to be held. Staff at the Marriott in Glasgow were fabulous. They could not have been more helpful. They did all they could to accommodate us – hence the event was brought forward a week.

“I’m so grateful to my team here too, who have slogged their guts out. When we found the new venue, the layout for the exhibition was different – another challenge.

“It may come as no surprise that I suffered a burst ulcer at the end of January. I lost six pints of blood. 2018 has certainly been a bit of year so far!”

Ralph was keen to stress the conference is “looking good.” He added: “The ratio of suppliers to operators has traditionally been 50:50. We decided to broaden the appeal of the event and approach non-ALBUM operator members. We’ve turned it into a mini trade show to help primarily Scottish operators, who might be deterred from travelling ‘down south’ to the NEC in Birmingham in the Autumn.

“We marketed the event using trade magazine adverts and emailing and calling people. Indications are good – we’ve got a great number of operators booked to attend. We’re hoping it will lead to an increase in ALBUM membership, as well as helping suppliers.

“We’re looking forward to welcoming everyone at the conference.”

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