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First Union upbeat about Bay of Plenty focus on living wage for bus drivers

Friday 13th April 2018

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A successful tender by Infratil-owned NZ Bus in Bay of Plenty where higher wages were a selling point is being touted as a win by First Union, which says it successfully lobbied the local council to change its policy. 


"We had a number of strike actions in place over the past 12 months to try and get the council to change their tendering process. They did that around September last year, to basically change it to say there will be a heavier weighting in favour of companies that pay higher wages," Jared Abbott, First Union secretary transport logistics and manufacturing division, told BusinessDesk. 


In order to win public transportation contracts, companies bid via the Public Transport Operating Model, a competitive tender system, brought in by the previous government.  


Labour lobbies, including First Union, have long argued the contract model rewards "the worst, lowest paying bus companies" as the winner essentially needs a lower bid than rivals to reduce the amount of public money that goes into public transport services. 


According to Abbott, "Go Bus tendered it around their current rates, which are around $18 an hour and NZ Bus tendered at a living wage of over $20.50 an hour so our members are completely stoked and we are stoked that the council is has done the right thing." 


Bay of Plenty Regional Council public transport committee chair Lyall Thurston told BusinessDesk the tender process was highly competitive, but the successful contract was about “more than the price." 


He confirmed that last year the committee and regional council made a conscious decision to include higher driver pay as part of the evaluation criteria for the (then) upcoming tender.


“This came about for a number of different reasons, including clear feedback from members of our local community and comparing what bus drivers were paid in other parts of New Zealand. Seeking higher rates of pay as part of the evaluation criteria was one way that we could respond to this feedback and comparative data. However, we also made this decision because it was simply the right thing to do," he said.


According to Thurston, 60 percent of the evaluation criteria was based on price and 40 percent was based on "quality" criteria, such as experience, track record, vehicle resources and driver’s wages. He said they had been "particularly taken" with the pay offered by NZ Bus. 


Go Bus, which held the contract for nine years, said it was not able to comment on the role that the proposed move to a Living Wage may have played in the outcome. However, "we are generally very supportive of increasing drivers' wages but this always needs to be done in conjunction with regional councils and central government who fund the bus services we provide," chief executive Calum Haslop said in an emailed response to questions. 


In the Wellington region, where NZ Bus lost most of its bus contract to Masterton-based Tranzit Group, a spokesman for Greater Wellington Regional Council said tenderers were selected on the basis of a balance of quality and price and "the procurement process was not a cost reduction exercise". 


The spokesman said, however, driver pay was not a specific consideration in the tender process "due to varying approaches taken to remuneration by bus operating companies." 


He also said "GWRC is not in a position to specify what the best mix of rates and conditions for drivers are. This is something that is the responsibility of employers, employees and their representatives." 



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