Competition Reshapes Public Transport
An article by Julien Dugué and Nadia Benaouda, TNP Consultants, published in the white paper “The Mobility Revolution”.
The liberalization of public transport across Europe is part of a broader strategy to enhance service quality and improve the economic efficiency of the sector. Depending on the market segment, liberalization can take one of two forms. First, the “conventioned market” model, where operators are awarded public service contracts to run services within a defined perimeter and timeframe—this is the approach used for France’s regional train services (TER) and for public transit in the Île de-France region. Second, the “open access” model, where multiple operators compete directly on the same routes, as seen with high-speed rail in Italy or more recently in France with Trenitalia and Renfe entering selected routes.
A Patchwork of Approaches Across Europe
While France has opted for a gradual, region-by-region opening of its markets, other European countries have pursued different paths. Germany implemented a single national ticketing system, offering greater simplicity and clarity for passengers. Italy opened its high-speed rail to competition in 2012, enabling the private operator Italo to establish a strong presence alongside Trenitalia. The UK, after a rapid and full liberalization, partially reversed course due to complications such as complex pricing and inconsistent service quality, shifting back to a more regulated model. Each system has its merits and its pitfalls. France must learn from these examples to avoid repeating past mistakes.
A Strategic Shift for Market Players
Opening to competition represents a fundamental strategic challenge for the entire sector. Historical operators must reassess their performance and competitiveness against incoming rivals. This often leads to internal restructuring, including the creation of new subsidiaries and the decentralization of services—changes that may fragment organizations and complicate coordination and service delivery.
For new entrants, liberalization presents a unique opportunity to enter a previously closed market. However, they face significant hurdles: securing infrastructure access, building a competitive offer in the shadow of established players, and attracting skilled talent in a sector where critical roles are increasingly difficult to fill. These challenges demand massive investments, which can be a barrier to entry—particularly during this initial phase of market opening.
Keys to Success and Major Transformation Levers
At the individual level, success will depend on operators’ ability to innovate, simplify, industrialize, and digitize their operations. The emergence of new technologies in transportation, data, and AI will be essential levers to boost competitiveness and operational efficiency.
Collectively, one of the most critical challenges is ensuring interoperability between operators. To maintain seamless service for passengers, integrated systems for ticketing, passenger information, and end-to-end travel planning are essential. Without such cohesion, the user experience will fragment, risking dissatisfaction and disengagement.
The human and social impact of this transformation is also a major concern. Staff transfers between operators—often involving different working conditions—can spark tensions. Attracting and retaining talent, especially in essential operational roles, is increasingly difficult. Workforce transformation will require strong support through training, upskilling, and clear career pathways. Historical players must manage this transition without losing know-how, degrading work conditions, or compromising service quality.
Toward a New Operation
With competition being introduced in phases—starting with buses in Île-de-France, then TER services, and eventually metro and RER networks by 2040—the sector is evolving into a multi-entity, multi-subsidiary model segmented by market. This transition raises serious questions of governance and coordination. A fragmented operational landscape risks undermining the coherence of public service delivery.
The ultimate challenge is ensuring that service remains consistent and intuitive for passengers, even as the ecosystem grows more complex. How can we maintain a seamless travel experience in a system where multiple operators coexist?
Market liberalization is undeniably underway. Its success will rest on the sector’s ability to reconcile competitiveness with internal transformation, all while delivering a high-quality service that remains vital to everyday life.
