Expansion and enhancement of the express bus network
When highways linking Tokyo and Kobe opened in the 1960s, the Japan National Railway (now privatized as the JR Group) and private passenger bus operators started offering long-distance highway bus service. However, low growth in the number of users and issues surrounding authorization requirements by the Ministry of Transport hampered an increase in the number of express service operators and routes until the late 1980s. In 1988, when overnight service linking Tokyo (Shinagawa)and Hirosaki opened successfully, rural bus operators suffering from debts incurred from local service began offering express services in partnership with urban bus operators. The number of express bus routes has increased four-fold over the last decade. The network is expanding especially in the area of overnight service, which is more competitive than railway counterparts in convenience, comfort, and affordability. Many overnight railway services have been forced to terminate service.
Deregulation of regional buses
The conventional approach of the Ministry of Transport in the bus industry was to use the supply-demand adjustment regulation to prevent new entries and regulate bus fares to make bus operators set fares which would cover all costs and return a reasonable profit margin. This enabled bus companies to help themselves and maintain regional bus networks. However, these regulations may now be inhibiting self-initiated creative measures to increase revenues, and they certainly run counter to the general pressure for deregulation in transportation. On the assumption that specific steps must be taken to maintain existing bus networks, the government decided to abolish the supply-demand adjustment regulation by FY2001, introducing in its place a fare cap system. A flexible approach has been incorporated in bus fare regulations since FY 1997, such as allowing companies to set regular bus fares lower than those authorized by the authorities.
