Bloomfield Avenue case study: Market segmentation for buses is bad

Market segmentation, in its broadest definition, is dividing the market into subsets of consumers who can be provided with individually tailored services.  This works for clothes.  This works for restaurants. But it does not work for buses.

I’ll illustrate the problem. Take Bloomfield Avenue in Essex County-  it’s one of the area’s main roads, nearly a straight line between Caldwell, Montclair, Bloomfield, and Newark.

Currently, the Caldwell-Bloomfield stretch of Bloomfield Avenue is shared between the NJ Transit 29 and the Decamp 33.  NJ Transit takes local passengers, and Decamp takes only passengers to New York.

Caldwell is considering starting a commuter shuttle service that would take Bloomfield Avenue between Caldwell and Bay Street Station in Montclair. That means there would be 3 separate service on Bloomfield Avenue for 3 separate market segments:

1. NJ Transit buses for local trips between Caldwell,  Newark, and everywhere in between
2. Decamp buses for passengers heading to the Port Authority
3. Caldwell shuttle for train commuters to New York

This is a problem because frequency is one of the most important elements of a good transit service.  3 separate buses along Bloomfield Avenue will mean that riders can only use a third of the buses to get from, say, Verona to Montclair. The local rider loses out in this situation.

In a classic market segmentation situation, the market segments each get a product that suits their needs.  But for transit, part of quality is quantity.  Having local riders to fewer buses means that the local bus service between points on Bloomfield Avenue is qualitatively and quantitatively worse.

Riders going to New York on Decamp have the most to gain from this arrangement. Since the Decamp Bus isn’t picking up and dropping off local riders, the speed the New York is marginally faster.  The local bus isn’t much use to them anyway.

The train commuters from Caldwell will still have a broader range of options than the other two market segments.  They still have the choice between the local NJ Transit bus and the Caldwell shuttle to take up Bloomfield Avenue.  If one is late, they can take the other.

The real losers in this situation are the parties who are paying for bus service.  By allowing local riders onto other bus services, there could be more transit options, but provided by fewer buses. Essentially, more money is being spend on bus service than needed. If Decamp dropped off at Bay Street Station, the Township of Caldwell might not need to pay for a municipal shuttle to the train station.

Now, let’s acknowledge that there’s are reasons things are this way. NJ Transit local bus service is not that good.  Even at rush hours, you can wait 15 minutes or more for a local bus down Bloomfield Avenue. They can be slow and not always on time.  Clearly, for whatever confluence of reasons, the 29 is an inadequate means for Caldwell commuters to reach Bay Street station.

Decamp also has its reasons for not taking local passengers. Decamp might not be interested in the low fares that come from local rides,  but the primary reason is that the company is actually prohibited from doing so. Its franchise restricts its buses from competing with NJ Transit. But this is an outdated way of thinking, a relic of the time when local suburban transit service were a profitable business. But if NJ Transit dropped this prohibition, it might mean better service for its passengers. Alternatively, local service on Decamp might mean that NJT could scale back its services with no ill effect.

In times of tight budgets and little expansion to the transit system, we should focus on making the best use out of the transit we already have. This calls for a little creativity from transit providers which these days, is sadly lacking.