How SBB's monopoly is preventing Flixbus from offering cheaper public transport prices in Switzerland

How SBB's monopoly is preventing Flixbus from offering cheaper public transport prices in Switzerland

On top of chocolate and mountains, Switzerland is also known for being very rich, expensive and very free. While our trains are legendarily on time, their costs are a major source of complains for locals who dream of free public transport.

It thus came as a shock to me when I realised that free market competition isn't a thing in the realm of Swiss public transport. 

free market competition isn't a thing in the realm of Swiss public transport. 

Free market competition is the idea that all are allowed to compete, to offer their service and that the customer chooses the best service based on his/her criterias (speed, price, quality, ...). 

In all industries where free market competition is a thing, prices have gone down and quality gone up (cars, computers, air transport, ...) and in all markets where participants are not allowed to compete freely, prices have risen as well as complaints over quality (education, banking, health care, ...).

In Switzerland, there is one state owned public transport company (the SBB) that sets prices, routes and schedules of all the buses, trams and trains in Switzerland: not exactly a healthy market environment. 

So when Flixbus, a german private company offering transportation entered the market by offering bus routes from Munich to Zurich and Zurich to Milan, it was exciting to see more availability in the form of cheaper transportation ready to be chosen by the public.

And the results are as expected, Flixbus is able to offer much cheaper transportation (although trip duration is usually longer) and the demand is there, as can be seen in the expansion of their own routes network. 

Thus came the obvious next question: why aren't they offering inland routes, from Geneva to Zurich for example (which currently costs about 50 euros)?

And the response is simply that they are not allowed. Why? Because according to the Swiss transport authority and transport lobbys, Swiss transport services would lose market shares

The justification is as follows: foreign companies have found ways to serve customers in a cheaper way (mainly by hiring outside of Switzerland) and because Swiss companies have to pay Swiss salaries, they can't compete price-wise and would quickly lose market shares as consumers would pick the better service, which would lead to job losses in the swiss transport sector. In one word: protectionism. 

I always wonder how these arguments manage to convince crowds since what they're basically saying is: "our service is not good enough for you to choose us by yourself, so we have to force you".

"But Nathan, think of the job loss, that would certainly be bad!"; You should of course be free to overpay for a service if you want to support an unprofitable business, but let the people who want to support the profitable business (and benefit from the better offering) do so. 

"But Nathan, if people take a Flixbus, there will be less money for the SBB and it will get even more expensive for the rest of us" - told me a friend a while back. Such a wonderfully absurd argument because it basically says "monopolies are great", which my friend certainly disagrees with (unless the monopoly is state enforced for some reason). Another way of saying the same things would be "we can't have opposition leaders because we might lose the majority and thus be less able to serve the public", sounds familiar?


I hope this Kabotageverbot is removed in the future to allow for a fair competition and cheaper prices. There is no point in protecting bad businesses. Swiss citizen can find better ways of spending their money than by overpaying for state-protected monopolies.