France Turns to Buses, Ride-Sharing to Ease Rail Strike's Impact

(Bloomberg) -- For the past month, French rail workers have been staging what they had hoped would be a massive strike of the kind that has previously brought the country to a standstill. Instead, the walkout has been blunted by deep changes to the nation’s economy.

Searches on ride-sharing company BlaBlaCar’s app rise sixfold on strike days, according to the startup. At intercity bus line FlixBus, online bookings jump 60 percent when train employees are off the job. The increase is 90 percent on its most popular lines, from Paris to Lille, Lyon and Bordeaux, the Munich-based company said.

“It’s a boosting our notoriety because it attracts people who otherwise would never have taken the bus,” said Yvan Lefranc-Morin, general manager of FlixBus France. The company added about 40 extra vehicles to meet extra demand, he said.

While France has a long history of paralyzing labor strife, such as protests over pension reform in 1995, the impact of this year’s walkout at SNCF, the national rail system, has been limited: More people are able to work from home thanks to fast internet connections, car sharing has grown in popularity, and President Emmanuel Macron, when he was economy minister, liberalized the transport market to allow intercity bus service. Unions also decided against a full strike, opting instead for two-day stoppages every five days until at least June.

‘Less Effective’

With the protest in its fourth week, the economy shows no signs of flagging and SNCF says participation in the strike is weakening. That’s a sign that Macron probably will prevail in his effort to end special benefits for rail workers. That in turn is likely to harden his resolve to take further steps to overhaul the euro region’s second-largest economy in an attempt to bring down an unemployment rate that’s stuck above 9 percent despite the strongest growth in six years.

“Strikes are less effective at disrupting the economy today than in the past, partly thanks to technology and increased flexibility at work,” said Ludovic Subran, chief economist at insurer Euler Hermes.

The overall macroeconomic impact of a strike is usually invisible because companies catch up after it ends, according to INSEE, the government statistics agency. In 1995, a loss of 0.1 percent of gross domestic product growth in the last quarter was more than made up for by a 0.7 percent expansion in the following three months, INSEE said. Striking transport workers that year created gridlock around the country, forcing the government to abandon a planned reform.

Read More: France’s Once-Vaunted Trains Are Macron’s Biggest Challenge Yet

Macron’s government has pledged it will press ahead with its reform of debt-laden SNCF before the rail industry opens to competition in 2020. He’s proposing doing away with the special status for train workers that allows some of them to retire at as young as 52. The changes would only apply to new employees. SNCF also will become a publicly owned corporation rather than a government agency.

“It’s too early to tell” the effect, French Economy Minister Bruno Le Maire said Thursday on RMC radio. “Several sectors are impacted throughout France, such as the tourism industry. On the other hand, others are taking advantage, such as ride-sharing service companies, with revenues boosted by the train strikes."

On Monday, 40 percent of local trains, 35 percent of high-speed services and 30 percent of intercity trains were operating, according to SNCF. Workers also are on strike Tuesday.

“Our goal isn’t to make people’s lives difficult,” said Bruno Poncet, a Sud-Rail union representative at SNCF. “We understand that the world has changed and that France’s economy is more service-based than before, which means people don’t necessarily need to be at work physically. And you know what? That’s for the best.”

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Still, the strike is creating some bottlenecks. It’s slowing grain shipments, lengthening the daily commute for some frustrated workers and crimping tourist bookings.

Automaker PSA Group is temporarily storing new Peugeot 3008 and 308 cars at a former NATO airfield in eastern France because there aren’t enough freight trains to ship them from factories in Sochaux and Mulhouse to Poland, Belgium, the Netherlands, Luxembourg and Italy. PSA says there’s no shortage for customers yet, though space at the airfield near Belfort has been rented until the end of the summer, with room for as many as 6,000 vehicles.

Hotel Bookings

Industrial starch makers, who rely on railway freight to carry tons of grain supplies, are also feeling the pain. Since start of the rail strikes, only about 40 percent of freight trains delivering grains have arrived, industry group Usipa said. Some factories may have to halt production by mid-May.

The hotel industry lobby says bookings have dropped 10 percent in April, which will translate into 150 million euros in lost revenue for the month, with fewer travelers than expected booking for May and June. Fabienne Bouviala, who manages an event organizing company, says she’s had to cancel most Paris events since the beginning of the strike. To make matters worse, Air France workers also are striking periodically to demand higher pay.

And some commuters say the showdown can’t end soon enough.

Martine Jamalkhan is among thousands who live wired to the SNCF’s mobile app, stalking alternatives to disrupted lines. Her 40-minute commute on a single train has become a two-hour affair involving three trains and a walk or bus ride. At the end of April, she stands to lose a day’s work in pay as she struggles to complete shifts despite her company’s extending daily office hours by two hours and a half and encouraging employees to take paid leave and adapt working hours.

“It’s the uncertainty that’s unbearable," said the 32-year-old, whose home in Trappes is 27 kilometers (17 miles) to the southwest of her job in La Defense, Paris’s business district. She’s tried taking time off and sharing rides. And the anxiety is only building up, since she signed up more than a year ago for training for a new job on the eastern side of Paris at the end of next month.

“If the strike is still on, I just can’t imagine how I’ll do it,” she said.

©2018 Bloomberg L.P.

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