Edinburgh based tour coach firms are fearing for their future claiming a rival subsidiary company of Lothian buses represents unfair competition.
The council-owned firm set up Lothian Motorcoaches in June last year, with five new executive coaches as well as new drivers and tour guides offering day trips to other areas of Scotland.
Established operators including AAA Coaches, LA Travel, Timberbush, Rabbies and Allan’s Coaches have now united in contacting transport convenor Lesley Macinnes as well as MSPs to express their concerns.
They say Lothian Motorcoaches is undercutting business and is threatening to destroy independent companies that have taken years of hard work to build from nothing.
Steve Spalding, CEO at Timberbush Tours, said: “When you start a business like this you don’t have the capital behind you like Lothian Motorcoaches has. They’re diluting the market and it’s history repeating itself after they became the dominant force in the sightseeing tours.”
Mr Spalding said a typical price for a day trip from Edinburgh to Roslin and the Borders might be around £40, but Lothian Motorcoaches were charging as little as £28.
“If you have the resources from a £150m business and want to flex their muscles into another market then there are going to be casualties,” he said.
“We have no issue with fair competition. But I can’t go to the bank and ask for £2m for some buses without any collateral. It just is not a level playing field at all.”
The operators met with council officials in January to discuss the situation and help find solutions where possible. It is understood a follow-up meeting is due to take place next week.
Linda Sutherland, 42, is the owner of LA Travel with her dad James Renton, 62, the boss of AAA Coaches. She told the Evening News she was worried about having to close down after 20 and 32 years in business and said seven of her staff quit to join Lothian Motorcoaches last summer.
She said: “We’re all for fair competition and starting up like we had to with a scrap coach. We can’t go around spending millions of pounds setting up.
“They’re undercutting business and taking on contracts that independent operators have held for years.
“There is a massive shortage of drivers in the industry as it is. We lost seven drivers last summer to them. They were offering more money and a bonus to drivers to entice them.
“We have had to work our fingers to the bone to get where we are today. But Lothian Motorcoaches has got money from the public purse it can spend no problem. We’re a family business and I’m worried we’re going to lose jobs and staff and end up closing altogether.”
A Lothian spokesperson said: “We’re a commercially-run organisation that’s able to invest in new products and services to the benefit of our customers.
“We would hope that any experienced business would agree that fair competition in the marketplace stimulates both demand and growth and is essential for consumer choice whilst driving innovation and ensuring continued high standards.”