This appeal is taken from a circuit court judgment affirming the report and order of the Missouri Public Service Commission which denied relator’s application for a certificate of public convenience and necessity. Jurisdiction for purposes of this appeal is vested in this court by § 386.540, RSMo 1978. The judgment is reversed with directions.
Three points are presented which in summary charge the circuit court erred in affirming the report and order of the Commission because (1) the “policy” authorizing charter rights only in conjunction with regular route operations as expressed and applied by the Commission in its order denying appellant’s application is unreasonable and unlawful because there are no facts in the record justifying the application of such a “policy” and such a “policy” is contrary to § 390.051, RSMo 1978 and this court’s interpretation of § 390.051, RSMo 1978; (2) the Public Service Commission’s refusal to grant appellant’s application for irregular route authority was unreasonable as a matter of law because the Commission’s conclusion that no need was demonstrated is not supported in the record and the Commission, in considering need, refused to give weight to the quality of appellant’s service being offered and the preference of charter bus customers; and (3) the findings of fact and conclusions of law of the Commission were unreasonable and unlawful as a matter of law because (a) the record does not show any substantial impact upon protestants’ charter business in St. Louis, St. Charles and Jefferson counties which would occur from competition there with appellant; (b) the record does not support any need for protestants’ regular routes throughout Missouri to be subsidized by their charter revenues and profits, if any, from St. Louis, St. Charles and Jefferson counties; (c) there is no factual or legal justification for. requiring charter bus customers in St. Louis, St. Charles and Jefferson counties to subsidize the regular routes of protestants.
For purposes of this opinion, the parties are identified as follows: Gulf Transport Co. is the relator-appellant and is hereinafter referred to as relator. The Missouri Public Service Commission is co-respondent *451and is hereinafter referred to as the P.S.C. There were seven intervenors: Greyhound Lines, Continental Trailways, Midwest Bus-lines, American Buslines, (Midwest and American are subsidiaries of Continental), V — K Bus Lines, Vandalia Bus Lines and Mid-American Coaches. Intervenors protested the application and are hereinafter referred to as protestants. Protestants entered this cause pursuant to § 390.051, RSMo 1978.
The record reveals the following pertinent facts. On February 20, 1980, relator filed an application for a certificate of public convenience and necessity seeking irregular route authority for the transportation of passengers from points of origin in St. Louis, St. Charles, and Jefferson counties in Missouri to all points in the state.
A hearing on relator’s application was held on April 1 and 2, 1980 by a hearing examiner for the P.S.C. to determine the propriety of irregular route market entry by relator. The P.S.C. rendered its report and order on August 20,1980 denying relator’s application. On September 23, 1980, relator’s application for rehearing was overruled by the P.S.C. Upon relator’s petition, a writ of review was issued by the circuit court on October 14,1980. The circuit court affirmed the P.S.C. order on May 20, 1981. This appeal followed.
Relator is a Mississippi corporation which operates as a regular route common carrier of passengers by motor vehicle in the states of Alabama, Mississippi, Tennessee, Kentucky, Illinois, Indiana, and within an extremely limited area of Missouri. Relator commenced business in 1936. Relator’s only regular route authority in Missouri consists of a one mile stretch from the bus terminal in St. Louis to the Mississippi River Bridge. Relator possesses interstate operating authority from the Interstate Commerce Commission (I.C.C.) and has charter bus rights ancillary to the interstate authority. This I.C.C. authority permits relator to operate charter bus operations from St. Louis throughout the continental United States and all provinces of Canada. This I.C.C. authority also allows relator to provide charter service from St. Louis and its commercial zone1 to points in Missouri where the interstate nature of the movements has been established by inclusion of tour points outside of Missouri. As a result, relator must, for example, take charters from St. Louis, Missouri to Kansas City, Kansas for overnight lodging to preserve the interstate character of the charter even though activities on the Missouri side were the principal focus of the trip. Relator provides this service, in part, by maintaining personnel, an office and a garage facility in St. Louis to conduct its business. Relator’s application was filed as a request for intrastate operating authority because it has received numerous requests for intrastate charter tours as a result of its substantial interstate charter business. Relator seeks operating authority in order to accommodate this demand. Other facts pertaining to the issues herein will be developed and discussed as applicable within the remainder of this opinion.
The principal statutory provisions applicable herein are subsections 5. and 6. of § 390.051, RSMo 1978, which read as follows:
“5. If the Commission shall find from the evidence that public convenience and necessity will be promoted or that there is public need for the creation of the service proposed, or any part thereof, and that the applicant is qualified properly to perform the service proposed and to conform to the provisions of Section 390.111 to 390.176 and the requirements rules and regulations of the Commission established thereunder, a certificate therefor shall be issued.”
6. In determining whether a certificate should be issued, the Commission shall give reasonable consideration to the transportation service being furnished by any common carrier by rail or motor vehi-*452ele and the effect which the proposed transportation service may have upon such carriers; provided, that the issuance of a certificate of convenience and necessity to one carrier shall not prohibit the granting of such certificate to another carrier over the same route if in the opinion of the Commission the public convenience and necessity will be promoted by so doing.”
Review of the report and order of the P.S.C. is limited to the determination of whether the report and order are lawful and reasonable. State ex rel Utility Consumers Council of Missouri, Inc. v. Public Service Commission, 585 S.W.2d 41 (Mo. banc 1979); Empire Dist. Elec. Co. v. Cox, 588 S.W.2d 263 (Mo.App.1979). The lawfulness of an order of the P.S.C. depends on whether there exists statutory authority for its issuance. State ex rel. City of Cape Girardeau v. Public Service Commission, 567 S.W.2d 450 (Mo.App.1978). Decisions of administrative agencies based upon their interpretation of the law is a matter of independent judgment for a reviewing court and will be corrected where erroneous. Daily Record Co. v. James, 629 S.W.2d 348 (Mo. banc 1982).
The reasonableness of a report and order of the P.S.C. depends on whether the report and order are supported by competent and substantial evidence upon the whole record. State ex rel. Beaufort Transfer Co. v. Public Service Commission of Missouri, 610 S.W.2d 96 (Mo.App.1980). Findings by the P.S.C. are considered prima facie correct and a party challenging them bears the burden of showing such findings are not reasonable or lawful. State ex rel. Inman Freight System, Inc. v. Public Service Commission, 600 S.W.2d 650 (Mo.App.1980). Upon review, this court is prohibited from substituting its judgment for that of the P.S.C., but it is entitled to determine whether the P.S.C. could have reasonably made its findings and reached the results announced in its findings and order by consideration of all the evidence presented. State ex rel. Oliver v. Public Service Commission, 542 S.W.2d 595 (Mo.App.1976).
The points presented by relator can be reduced to three simply worded questions which are stated prior to the full consideration of the applicable facts and circumstances specific to this case: (1) Was the P.S.C.’s cross-subsidization policy supported by statutory authority? (2) Was a public need demonstrated for requested charter bus service? and (3) Would the competitive effect of new entry of other charter and regular route service justify denial of relator’s application?
The first of the above questions require a determination of whether the factors utilized by the P.S.C., in denying relator’s application, are supported by statutory authority. The P.S.C. is an administrative agency with limited jurisdiction and the lawfulness of its actions depends directly on whether it has statutory power and authority to act. State ex rel. Phillip Transfer Lines, Inc. v. Public Service Commission, 599 S.W.2d 82 (Mo.App.1980); State ex rel. Beaufort Transfer Co. v. Clark, 504 S.W.2d 216 (Mo.App.1973). Where such authority is lacking, a reviewing court may reverse. Thus, in State ex rel. Phillip T. L. Inc. v. Public Service Commission, 523 S.W.2d 353 (Mo.App.1975), this court found that the P.S.C. lacked authority to determine the reasonableness of jointly established through routes pursuant to § 390.116, RSMo 1969.2
The reading of the findings of fact and conclusions of law entered by the P.S.C. in the instant case reveals that the “policy” of not granting irregular route authority where an applicant holds no regular route authority was a decisive factor in the denial of relator’s application. This “policy” was expressed by the P.S.C. as follows:
“The policy of this Commission, in implementing motor carrier regulation, is to preserve, to the maximum extent possible, the complete transportation system for the entire state, not for a particular area. In furtherance of that goal, the *453Commission has consistently linked charter operations to regular route authorities. This practice is pursued, even to the extent of cancellation of charter rights from points where regular route carriers terminate operations. This policy is in recognition of the frequent losses resulting from regular route operations which must be subsidized by the more profitable charter carriage. In the Commission’s opinion, it would be an abuse of its discretion to permit the applicant to subsidize its unprofitable regular route operations in other states by engaging in charter operations in the State of Missouri.
The Commission, in pursuit of its goal, has historically refrained from granting only charter authorities to intercity carriers. To do so now, and create additional competition for charter revenues being enjoyed by the carriers performing regular route service would necessitate a li-berization [sic] of attitude in applications to abandon unprofitable routes. This we are unwilling to do and reiterate our policy of generally authorizing charter rights in conjunction with regular route operations in absence of a clear showing that regular route carriers cannot perform all requested charter service.” (emphasis added)
The result of the foregoing declaration of “policy” by the P.S.C. is that entry into intrastate irregular route markets is contingent upon the provision of intrastate regular route service by an applicant before operating authority will be granted. The P.S.C. suggests that the authority for such “policy” arises from § 390.041.1, RSMo 1978 which vests in the P.S.C. the power and authority “to establish reasonable requirements with respect to adequate and continuous service ...” The P.S.C. further suggests that our statutes evince a generalized “preference” for regular route carriers over irregular route carriers and cite in support of this position § 390.051.8, RSMo 1978 as well as prior P.S.C. decisions.
Where an agency of the state such as the P.S.C. is charged with enforcement of a statute, the construction given that statute by the agency is entitled to some weight regarding its interpretation. State ex rel. Hering v. State Public Service Commission, 549 S.W.2d 658 (Mo.App.1977). But where an administrative decision is clearly based upon an agency’s interpretation or application of the law, the agency’s conclusion of law and any decision based thereon become a matter for the independent judgment of the reviewing court and are subject to correction where erroneous. Daily Record Company, supra; M.V. Marine Co. v. State Tax Commission of Mo., 606 S.W.2d 644 (Mo. banc 1980); St. Louis County v. State Tax Commission, 562 S.W.2d 334 (Mo. banc 1978). The exercise of such independent judicial judgment, in spite of argument to the contrary by the P.S.C., is not constrained by pronouncements of administrative agencies. Where, as in the instant proceedings, the P.S.C. “recognizes a preference for the motor carrier service provided by a regular route carrier”, such pronouncement is of no importance if upon analysis of the statutory law of this state, a reviewing court reaches a different conclusion. The P.S.C. urges this court to extrapolate from the language of § 390.051.8 a preference for regular route service. Section 390.051.8 reads:
“It shall be unlawful for any common carrier, except one having a certificate authorizing such service to accept persons or property for transportation between points on the route of a regular route common carrier or between points on the routes of two or more regular route common carriers where through or joint service has been authorized or established between such regular route common carriers.”
Relator herein is not seeking by its application to operate between points already served by regular route carriers. The foregoing section has been considered by this court in State ex rel. Phillip v. Public Service Commission, 599 S.W.2d 82, supra at 88, where we declared:
“The import of § 390.051(8) is to exclude irregular route carriers from the transport of goods between points served *454by regular route carriers, thus granting to the regular carriers so certified the exclusive entitlement to that segment of the freight business.”
This court concludes that neither the language of § 390.051.8 nor the rule in State ex rel Phillip, either directly or by implication, authorize the P.S.C. to recognize “a preference for a regular route carrier” and by such recognition, establish a policy that an applicant for an irregular route operating certificate must furnish regular route authority as a condition precedent.
In the closest reported decision on point, State ex rel. Pitcairn v. Public Service Commission, 232 Mo.App. 755, 111 S.W.2d 982 (1937), nothing is mentioned, nor any rule established that intrastate regular route service is a condition precedent to procurement of irregular route charter bus authority.3 Pitcairn arose from an attempt by a rail carrier to prevent irregular route market entry by a charter bus service. This court declared that far from being subservient to regular route service, irregular route carriage was a vital component of Missouri’s transportation system:
“Literal compliance with the provisions of the statutes in so far as applications for certificates covering irregular routes are concerned, is impossible. If, then, it is held that there must be such compliance, we will have held, in effect, that no certificate authorizing service over an irregular route may be legally issued. Such a decision would outlaw every common carrier of persons, and probably also of property, by motor vehicle, in the state of Missouri excepting those operating over regular routes. Such a construction would defeat the very purpose the Legislature intended to accomplish when the law was enacted. That purpose, as declared by the Supreme Court in State ex rel. v. Atkinson, 275 Mo. 325, loc. cit. 337, 204 S.W. 897, and in State ex rel. v. Public Service Commission, 324 Mo. 270, loc. cit. 276, 23 S.W.2d 115, was to regulate all motor vehicle common carriers for the good of the public. Appellants urge that we make of this benevolent act a sinister and deadly weapon with which and by which one important branch of this vital industry of transportation shall be outlawed and legally abolished; and this in view of the additional fact that, until 1931, this particular branch of transportation was the favorite of the law and was specifically exempted from all regulation.” (emphasis added) Pitcairn, 111 S.W.2d at 986.
If the instant “policy” of the P.S.C. is permitted to stand, the effect would be to bar the entry of new competitors into intrastate charter bus markets in our state. This would foreclose automatically new entrants who might provide superior service at lower costs to consumers. We have previously made it clear that our statutes announce and provide a policy of regulated competition for the public benefit and not a policy of sanctioned monopoly. Beaufort Transfer v. Clark, supra. To the extent the P.S.C. is authorized to restrain competition, it must do so consistent with the public interest and concern itself with existing utilities “only in an incidental manner.” State ex rel. Public Water v. Public Service, 600 S.W.2d 147, 155 (Mo.App.1980). This same rationale applies to the Missouri Bus and Truck Law.
While not argued specifically by relator on this appeal, we also note that the Commission’s regular route policy “preference” has not been published pursuant to the Missouri Administrative Procedure Act, § 536.-021, RSMo 1978. In State ex rel. Beaufort v. Public Service Comm., 610 S.W.2d, supra, at 99-100, this court held that an attempt by the P.S.C. to apply generally an irregular route base definition was “a rule within the definition of § 536.010, RSMo 1978” and that an order using such definition was invalid because the rule-making procedure had not been observed. In the instant case, whether the P.S.C. had complied with the Missouri Administrative Procedure Act *455would not, of course, resuscitate the Commission’s “policy” where no statutory authority provides for the discretionary exercise of such a “preference”. Johnson v. Labor and Ind. Relations Comm., 591 S.W.2d 241 (Mo.App.1979). The failure of the Commission to publish and articulate coherent standards for the application of its “policy” does, however, underscore the illegitimacy of any general “preference” in favor of regular route carriers.
In defense of its policy, the respondents cite to this court State ex rel. Nat. Trail Con., Inc. v. Public Service Comm., 488 S.W.2d 942, 944 (Mo.App.1972). The respondents direct this court to the following language within that case:
“The purpose of our Public Service Commission laws is basically to secure uniformity of operating conditions among similar carriers; to secure adequate and sustained service for the public at the least possible cost; to prevent economic waste that follows useless duplication of service; and to protect and conserve investments already made to furnish and maintain such public service.”
From the foregoing, the respondents argue that a duty is imposed upon the P.S.C. to preserve a transportation system for the entire state. While we do not dispute this general goal, such language does not address the issue herein, which is whether the cross-subsidy policy of the P.S.C. is a permissible means of realizing its statutory obligations. If the position of the respondents was upheld and this court was to approve a policy of protectionism as necessary to guarantee adequate regular route revenues, we would be ignoring the comprehensive rate-making authority of the Commission under § 390.041, RSMo 1978. Even if we were to assume that present regular route tariffs are insufficient, the Commission can review such tariffs and act accordingly. This is a much more precise and far less intrusive approach than that of barring entry of other irregular route operators on the premise that regular route authority is a prerequisite to the grant of a charter bus operating certificate.
This court concludes that there is no statutory basis permitting the P.S.C. to deny relator the authority to operate an irregular route on the ground that relator holds no preexisting regular route authority. The order of the P.S.C. was based on a “policy” that lacks statutory support and is contrary to a system of “regulated competition.” Such “policy” is found to have no application to the instant proceedings, nor to relator herein, and is held inapplicable and void. Absent legislative change, said “policy” and any conclusions or orders based thereon regarding pending or future applications shall also be void and of no lawful force or effect. Question number (1) above is answered in the negative and in conjunction with that answer it is found that relator’s point (1) has merit and is sustained in favor of relator.
In the instant case, we are faced with two additional arguments advanced by respondents as independent grounds for the denial of irregular route authority to Gulf: (a) Gulf failed to prove a “public need” for the service, and (b) denial was justified based on the effect of new entry on incumbent carriers. These arguments pose important issues for resolution in the context of our construction of § 390.051, RSMo 1978.
Under point (2) of its argument on appeal, relator contends that the refusal of the P.S.C. to grant irregular route authority based on Gulf’s failure to show a public need is not supported by the record. Error is also charged in the refusal of the P.S.C. to give weight to the quality of relator’s service and to the preferences of charter bus customers. In conjunction with relator’s point (2), this court perceives the basic question to be: Was a public need demonstrated for requested charter bus service? Although the Commission interrelates this issue with its “policy” discussed above, it offers the alternative argument that relator failed to demonstrate a public need for additional charter bus service. In drawing this conclusion, the P.S.C. interpreted “public convenience” to require a showing that “there is a failure, breakdown, incomplete*456ness or inadequacy in the existing facilities” and on the finding there was “virtually no incident where any person has been unable to secure charter service” from incumbent carriers.
Prior to consideration of the specific facts and circumstances of the instant proceedings, it is necessary to discuss briefly some basic applicable principles. In the analysis above, this court observed that the statutory law regarding the motor carrier industry establishes a scheme of regulated competition and not officially sanctioned monopoly. State ex rel. Beaufort Transfer, supra. When the entire statutory framework creating and authorizing the PlS.C. is examined, it becomes apparent there exists a fundamental difference between the economic structure of the motor carrier industry and that of traditional public utilities such as electrical power, communications, water, and natural gas. The industries in this latter group have generally been classified as theoretical “natural monopolies”.4 Unlike these so-called “natural monopolies”, the motor carrier industry is characterized by comparatively low fixed cost and capital investment requirements which serve as high entry barriers to new competition in natural monopoly industries. The absence of these barriers to entry in the motor carrier industry reduces significantly the possibility of monopoly pricing because attempts to engage in such pricing attract new competition. Competition benefits the carrier-using public, because it forces prices closer to cost, and creates incentives to provide the service desired by consumers.5 The decisional law of our state and other jurisdictions makes competition an integral part of evaluating the need for additional service in the motor carrier context. The overriding consideration has been and remains the convenience and necessity of the public and not any individual or group of individuals. State ex rel. Missouri, Kansas, and Oklahoma Coach Lines v. Public Service Commission, 238 Mo.App. 317, 179 S.W.2d 132, 136 (1944). Although an applicant bears the burden of proof in such matters, State ex rel. Oliver v. Public Service Commission, supra, the rights of individuals, including protesting carriers, are subservient to the rights of the public. State ex rel. Interstate Transit Lines v. Public Service Commission, 234 Mo.App. 554, 132 S.W.2d 1082, 1087 (1939). Even if the grant of a certificate produces some adverse impact on incumbent carriers, such loss to protestants can be outweighed by the gain to the public in better service. State ex rel. Churchill Trk. Lines v. Pub. Ser. Comm., 555 S.W.2d 328, 335 (Mo.App.1977). In our most recent statement of this principle, we observed: “The effect upon other common carriers is to be considered by the Commission, but an adverse effect upon them yields to a public need for the service”. State ex rel. Twehous Excavating Company, Inc. v. Pub. Service Com’n., 617 S.W.2d 104, 106 (Mo.App.1981).
Section 390.051, RSMo 1978 does not create protectionism for the benefit of incumbent carriers, but rather, has been enacted for the purpose of promoting and conserving the interest and convenience of the public. Thus, in State ex rel. Public Water we observed that the P.S.C. must have as its principal goal, the vindication of the public interest and must concern itself with competing utilities only incidentally.
The need to consider the potential benefits accruing to the public from additional competition has been recognized by recent decisions interpreting the Federal Motor Carrier Act of 1935, 49 U.S.C. § 10922(a). See Sharron Motor Lines, Inc. v. United States, 633 F.2d 1115 (5th Cir.1981); Watkins Motor Lines, Inc. v. I.C.C., 641 F.2d 1183 (5th Cir.1981); P.A.K. Transport, Inc. v. United States, 613 F.2d 351 (1st Cir.1980); and Sawyer Transport, Inc. v. United States, 565 F.2d 474 (7th Cir.1977). The *457need to consider such benefits has not been limited to federal decisional interpretation. See e.g., Gray Line Tours of Southern Nevada v. P.S.C., 626 P.2d 263 (Nev.1981); New England Household Moving and Storage, Inc. v. Public Utilities Commission, 117 N.H. 1038, 381 A.2d 745 (N.H.1977); and Morey v. Pub. Util. Commission, 196 Colo. 153, 582 P.2d 685 (Colo. banc 1978). From an analysis of the foregoing authority, two basic principles can be extracted and applied to the instant proceedings.
First, if the P.S.C. is to comply with the statutory requirement of § 390.011 that it regulate motor carriers for the interest and convenience of the public, then decisions by the P.S.C. must not be impervious to the potential benefits of additional competition. This is not to say that the P.S.C. may not conclude, if supported by substantial and competent evidence on the whole record, that other public interest considerations outweigh the salutary effects of competition in a given case. But where, as in the instant case, the statutory scheme contemplates a regime of regulated competition and emphasizes the public need over the effect of market entry on current carriers, Twehous, supra, it is an abuse of discretion for the Commission to ignore the potential benefits yielded by competition. Thus, we hold that the failure to consider the potential desirability of competition is enough to compel reversal of a P.S.C. decision under § 390.051, RSMo 1978. See also Niedert Motor Service, Inc. v. United States, 583 F.2d 954, 963 (7th Cir.1978).
A second principle derived from the foregoing authority is that an operating certificate may not be denied “simply because existing service is not clearly superi- or”. Sharron, supra. See also Morey v. Pub. Util. Commission, supra. Although this court was speaking in the context of a case involving a utility which was arguably a natural monopoly, we specifically rejected an approach which made adequacy of existing facilities determinative of market entry in Public Water, supra. Instead, we adopted a balancing process which gives weight to the desirability of competition. Such an approach is particularly applicable in the motor carrier context, which does not exhibit “natural monopoly” characteristics.
Applying these principles, we now consider the evidence, findings and conclusions in the instant case. At the outset, the P.S.C. concedes that relator is an experienced, competent charter carrier qualified to perform the proposed service and that relator would have “little difficulty assuming operations under any authority to be granted by this application”. The evidence relative to relator’s equipment revealed that it possessed 61 modern 47-passenger, air-conditioned, restroom equipped highway type buses. The evidence also revealed that in anticipation of a general increase in business, it was Gulf’s policy to purchase six new buses each year. The record also disclosed that during the summer months (when travel is heaviest) more than one-half of relator’s fleet is based in St. Louis. During the winter months, part of the fleet is sent south. The record also contained uncontested evidence that general market demand for charter bus service had expanded significantly in recent years and further growth was likely in the future.
The respondents argue that an applicant must demonstrate a present need for additional service and suggest that consideration of future conditions and increases in market demand are not legitimate components of the determination of public need. In support of this position, respondents refer this court to State ex rel. Oliver, supra at 598. An examination of Oliver discloses that the court’s remarks concerning present need occurred in the context of its observation that the applicant’s burden of proof could not be met by mere “speculation, guesswork, hopes or aspirations”. Oliver does not prohibit consideration of the future as part of a comprehensive evaluation of whether the public convenience and necessity would be served by new entry. As this court recognized long ago, the future must be considered in determining whether the public convenience and necessity would be served by new entry. Ringo v. *458Public Service Commission, 234 Mo.App. 549, 132 S.W.2d 1080, 1082 (1939).
The record also contains evidence concerning the quality and availability of service and pricing in intrastate charter bus markets. The evidence revealed that relator’s proposed service was a package of services which included the arrangement of restaurant choices, information describing sight-seeing locations, hotel accommodations, menus, and prices. The importance and desirability of relator’s proposed service was supported by several “consumer” witnesses who testified at the hearing. It would serve no purpose to specifically outline this lengthy testimony in light of an admission in the hearing examiner’s report that declared “generally speaking, all of the individuals supporting the application seek the services of Gulf because of the additional information that can be obtained by the attractions in route and the prices charged.” The record fails to reveal that any of the protestants furnished comparable service.
It is argued to this court that the showing of public benefits resulting from relator’s proposed service is something “akin to” special operations unrelated to charter bus service. The Commission also makes the bare assertion in its report that like services could be provided by travel agents at no additional cost. This argument is not supported by the evidence in the record. The only reference by a witness to the possibility that like services could be provided by travel agents occurred during the cross-examination of Miller Johnson, a travel witness who testified in favor of relator’s application. The record reveals the following exchange during cross-examination by counsel for one of the protestants:
“Q. And you are selling a group, then, that’s performed so far as your use is concerned and then you arrange their transportation and their other facilities that they may want?
A. Yes, sir.
Q. And you are providing the type of service that the last witness indicated she was interested in in arranging the visits, the meals, and the rest stops, and things of that nature?
A. Yes,'they either—
Q. That’s the type of service you’re providing; is that correct?
A. Yes.”
This meager testimony was not accompanied by any other evidence in the record that tour group representatives were aware of travel agencies’ services, that such services were of the same quality as offered by Gulf, or that they were readily available with respect to all of the protesting carriers. In addition, Mrs. John Kemmy, representing a Catholic church group, stated under direct examination:
“Q. Have you investigated the possibility of contacting independent travel agents?
A. My experience, and I get many, many brochures from different travel agencies, I can figure within about a $4 or $5 cheaper trip when I — I mean per person which is pretty important when you’re working with senior citizens on fixed incomes.
Q. I understand. When you figure it, though, that’s a savings that you could make because you’re not utilizing the services of the travel agency; is that correct?
A. That’s right.”
The evidence also disclosed that the services of travel agents are not consistently available, even assuming they are equivalent. The record reveals that protestants V-K and Vandalia do not pay commissions to travel agents and protestant Mid-American does not pay commissions unless it foresees a certain dollar volume with a particular agency. There is no evidence that such services are in fact provided by protestants. In essence, the P.S.C. seizes upon one statement (see Johnson’s testimony above) to support its conclusion that the service proposed by relator could be provided by travel agents. Considering the record as a whole, it cannot be concluded that the asserted provision by travel agents of services similar to those offered by relator is supported *459by competent and substantial evidence on the whole record.
Another aspect developed from the testimony of the travel agent witnesses was the availability of buses throughout the week during the summer season. The record reveals that in the past, relator has leased buses to some of the protestants for charter trips to alleviate shortages of buses. One travel agent testified that in Jefferson County more buses are needed between the months of May and October. Another travel agent witness testified that he had been refused service by protestant Mid-American for intrastate service during the month of May. There was also testimony by a travel agent that he was forced to rearrange dates and restructure tours as a result of bus shortages. The predictable result of these shortages is that the public is both inconvenienced and forced to utilize equipment of an age and quality not originally desired.
Another important facet of relator’s application was the quality of equipment it offered. This was particularly emphasized by supporting charter bus customers. Three witnesses, who in combination represented a senior citizens church group and the American Association of Retired Persons, emphasized the advantages of the service offered by relator during the following testimony:
“Q. Now, with reference to the scheduling and the packaging of the meals and the sight-seeing tours, are you looking for a carrier that will provide all of those things in one package for you?
A. Uh-huh.
Q. That will schedule your stops and sight-seeing and you pay them so many dollars and they do it all?
A. Right.
Q. Is that what Gulf has indicated they would be able to do for you in Missouri? A. Yes, sir.
Q. In other words, you want more than just transportation. You want someone to put the package together for you and include your meals, your visits to the sight-seeing places you-all would like to visit and include the transportation too in the total price?
A. Yes, sir.
Q. And that’s your primary need, I take it, then from your standpoint of your organization and particularly your role as chairman of that committee?
A. Yes, sir. I spend enough time just getting the thing organized without having to do the whole planning of the trip itself.
Q. That’s the phase of Gulf’s service that you’re particularly pleased with in packaging the whole thing together rather than just the transportation aspect of it?
A. That and the equipment that they have.
Q. Have you compared their equipment to the equipment of other carriers?
A. Yes, I have.
Q. What carrier do you consider — well, I represent Greyhound and Continental. Have you compared their equipment with Greyhound’s?
A. Yes. But after the treatment I was given by Greyhound over the phone last summer, I’m afraid I wouldn’t call them again.”
The record also reveals that witnesses emphasized the advantage of relator’s St. Louis office. Among the protestants, only V-K has a local office in St. Louis. Protestant Greyhound can be reached for charter bus service through use of an 800 series long distance call to a Chicago office which relays the calls to a coordinating office in Phoenix, Arizona. Protestant-Trailways employs a similar system. At least one witness testified that her telephone contacts with Greyhound and Trailways were unsatisfactory. Witnesses for senior groups and travel enterprises testified that the location of relator’s local St. Louis office and personal contact with St. Louis personnel constituted an advantage over non-local protestant carriers.
Finally, the record reveals, in addition to the service advantages discussed above, that the rates proposed by relator were *460consistently lower than those of protestants. In its order, the P.S.C. disclosed:
“The rates proposed by Gulf include $1.28 per mile for 38 passenger buses, $1.35 per mile for buses of a capacity of 39 to 43 passengers and $1.40 per mile for buses with a capacity of 44 to 47 passengers. Gulfs deadhead mileage is $.90 per mile. As a result of recent increases, Greyhound’s rate for deadhead mileage and for buses of a capacity of 39 to 43 passengers are the same as those of Gulf. Greyhound’s published rate for buses of a capacity of 44 to 47 passengers is $1.45 per mile or $.05 higher than that of Gulf. The current rates of Trailways includes a charge of $1.50 per mile for a 39 passenger bus and $1.70 per mile for a 44 to 46 passenger bus. Trailways’ deadhead mileage is $1.10. Both Mid-American and V-K charge a weekday rate of $1.27 per mile for a 38 passenger bus and a weekend rate of $1.32 per mile for the same vehicle. Those two carriers’ weekday and weekend rates for buses of a capacity of 44 to 47 passengers are $1.45 and $1.50 respectively and both carriers charge $1.10 per mile for deadhead. As a result of the recent fare increases granted to the Missouri intrastate carriers, the current rates are slightly higher than those proposed by Gulf at the time of the hearing.”
In response to the evidence that relator offered superior service at lower rates, the P.S.C. and protestants defend denial of operating authority on the ground that no tour had ever been cancelled due to the unavailability of buses. Such a position is based upon the claimed adequacy of existing service. This alone will not sustain a denial of operating authority. Public Water; Household Moving and Storage; and Sawyer, supra. This conclusion is particularly true where the P.S.C. fails to “consider, as a factor indicative of public need, the possible benefits that can be expected from increased competition.” Sharron; P.A.K., supra. The preoccupation of the P.S.C. with the adequacy of existing service in the instant case was erroneous and is found not to sustain the order of the Commission. But even if adequacy of service was found to be decisive, it could not rest upon the mere availability of physical equipment. If this court were to adopt “physical availability” as determinative of adequacy as urged by the respondents, then the determination of whether the public convenience would be served would be converted into an assessment of whether entry is “essential or absolutely indispensable”. This approach has been rejected before, Beaufort Transfer Co.; State ex rel. Missouri, Kansas and Oklahoma Coach Lines, 179 S.W.2d at 136, supra, and we do so again in the instant proceedings.
The record established that relator offered superior service at rates below those offered by protestants. This uncontested evidence went to the very basis of any proper evaluation of public convenience pursuant to § 390.051, and such evidence amounted to a prima facie showing of public need. Trans-American Van Service, Inc. v. United States, 421 F.Supp. 308, 330 (N.D.Tex.1976).
The effect of affirming the Commission’s finding that there was no need for relator’s service would be to force charter bus customers to accept services offered by protestants without regard to lower rates, inconvenience and service adequacy as determined by the customers themselves. The Commission’s exclusive reliance on adequacy of service and its failure to consider the potential benefits of new competition was error as a matter of law. When coupled with the failure of respondents to adduce competent and substantial evidence on the whole record to counter Gulf’s service and price advantages, we must conclude that the Commission’s findings and order amounted to reversible error on the issue of need. In sum, the question as to whether relator demonstrated a public need for additional service is answered in the affirmative and it is found that relator’s point (2) is sustained in its favor.
Under point (3) relator charges that the findings and conclusions of the Commission in support of its order were unreasonable *461and unlawful as a matter of law because the record does not show any substantial impact on protestant’s charter business in St. Louis, St. Charles and Jefferson Counties which would occur as a result of competition from relator; that the record does not support any need for protestants’ regular routes throughout Missouri to be subsidized by charter revenues and profits from St. Louis, St. Charles and Jefferson Counties and that there is no factual or legal justification for requiring charter bus customers in St. Louis, St. Charles and Jefferson Counties to subsidize the regular routes of protestants. Relator’s point (3) can be reduced to the simple question: Would the competitive effect of new entry on other charter and regular route service justify the denial of relator’s application for a certificate of public convenience and necessity?
Section 390.051.6, RSMo 1978 directs the P.S.C. to give reasonable consideration to the effect proposed service may have upon existing carriers. However, the determination of whether to grant operating authority must be guided primarily by the interest of the public and not by the relative economic advantages or disadvantages of competing carriers. Hunt Transp. Inc. v. I.C.G., 636 F.2d 190 (8th Cir.1980). As we observed previously, “the effect upon other common carriers is to be considered by the Commission, but an adverse effect upon them yields to' a public need for the service”. State ex rel. Twehous, supra. The fact that business may be diverted from protesting carriers is no argument for denial of an application where the public convenience and necessity would be served by new entry. State ex rel. Churchill Truck Lines, 555 S.W.2d, supra, at 335. Nor is the loss of customers by a carrier itself objectionable since it is the role of the P.S.C. to protect the public interest, not the interest of certified carriers. Midwest Coast Transp., Inc. v. I.C.C., 536 F.2d 256 (8th Cir.1976); Hilt Truck Line, Inc. v. United States, 532 F.2d 1199 (8th Cir.1976). For a similar declaration by our sister state of Minnesota, see Signal Delivery Service, Inc. v. Brynwood Transfer Company, 288 N.W.2d 707 (Minn.1980).
Protestants in the instant proceedings characterize the “policy” of the P.S.C. of subsidizing regular route service with irregular route revenues as “nothing more than a logical and reasonable extension of the obligation to consider the effect which the proposed transportation service will have on existing authorized carriers.” In addition, respondents assert that existing carriers “rely heavily upon their charter bus revenue to subsidize their unprofitable regular route operations” and that entry by relator into charter markets would adversely affect the ability of existing carriers to subsidize unprofitable regular route operations.
Considering first the evidentiary aspect of this question, the record revealed a steadily growing demand for charter bus service. The evidence upon this record fails to support protestant’s claim of any substantial diversion of irregular route service from protestants to relator. Nor is there evidence in the record that the profitability of Greyhound and Trailways depended upon irregular route revenues. The record also contained an admission by the Regional Director for Trailways that he had no knowledge of the percentage of traffic or revenues which would be diverted if relator was granted authority to operate.
Testimony further revealed that the only regular routes currently unprofitable were two possessed by Greyhound (between Kansas City and Booneville and Kansas City and St. Joseph). There was no evidence how relator’s entry would threaten these routes. Nor was there evidence which indicated from what revenue source these “unprofitable” operations were “subsidized”.
In the case of the remaining protestants, their position on this issue is even less tenable. Each of these protestants are engaged primarily in charter bus service. The record is devoid of evidence that the extremely limited regular route service of the remaining protestants was subsidized by charter business originating in St. Louis, St. Charles and Jefferson Counties or that any of these protestants would seek to abandon their *462regular routes upon the grant of authority to relator.
Refusal by the P.S.C. to grant authority to relator based upon the potential effect on protesting carriers is not supported by competent and substantial evidence upon the record herein, nor by the law of our state which directs that adverse effects upon existing carriers must yield to the public need for service. Twehous, supra.
It is evident from our review of the whole record that the refusal by the P.S.C. to grant authority to relator is based primarily on its “preference” for regular route carriers which we have found unsupported in the law.
Whether the competitive effects of new entry by Gulf were sufficient to deny operating authority is answered in the negative and with that answer it is found that relator’s point (3) has merit and is sustained to the favor of relator.
For the reasons set forth herein, the judgment of the circuit court affirming the findings, conclusions and order of the P.S.C. is in all respects reversed, and this cause is remanded to the circuit court with directions that the circuit court remand this case to the Public Service Commission for further proceedings consistent with this opinion.
SOMERVILLE, C.J., and PRITCHARD and LOWENSTEIN, JJ., concur.
SHANGLER, J., dissents in separate dissenting opinion.
WASSERSTROM and KENNEDY, JJ., concur in the separate dissenting opinion of SHANGLER, J.
. The commercial zone is an area identified as St. Louis City and a 15-mile radius from the corporate limits of St. Louis embracing portions of St. Louis, St. Charles, and Jefferson counties.
. Now § 390.116, RSMo 1978.
. Neither research of this court nor counsel for the Commission in oral argument disclosed any express statutory support of the Commission’s regular route “preference”.
. For a statement of the theory underlying the regulation of “natural monopolies”, as compared to the motor carrier industry, see R. Baron, Jurisdiction of the Public Service Commission, 34 J.Mo.Bar 27, 34 (1978).
. See S. Breyer, Analyzing Regulatory Failure: Mismatches, Less Restrictive Alternatives and Reform, 92 Harv.L.Rev. 549, 556-57 (1979).