V/Line doesn't operate any bus services. All the bus services are provided by private operators. There are significant benefits in having uniform pricing, livery, sources of information, etc. And this should be preserved. But this shouldn't be at the expense of innovation in the type of service being provided. Ultimately, it is up to PTV as to whether it wants operators to suggest innovative products in tenders, or alternatively specify different outcomes.
It is certainly easier for PTV and V/Line to just tender for buses that hold X number of people with an average age of Y years. But it does show a certain lack of imagination.
So if there is a desire for a different kind of product then the current environment is actually easier to achieve that than in an unsubsidised environment. An operator might not be prepared to take a risk on 1+2 seating, whereas the state has the ability to offer a longer term contract for this (eg. if the state is prepared to sign a ten year contract for a Swan Hill - Mildura coach with 1+2 seating, then it's viable for an operator to deliver this).
Of course, there also has to be data analysis to determine that if a coach with reduced capacity is being specified for a particular route, that the patronage will very rarely exceed it, and you need strategies in place to manage this.
Having said that, I think there are innovative solutions available. As discussed previously, I don't think you need the whole coach with 1+2 seating. If you designed a coach with a combination of 2+2 and 2+1 seating, then you should be able to get to a point where you still maintain high capacity, but have the ability to ensure that passengers don't need to sit next to strangers - which I think is actually one of the factors that people find uncomfortable on long distance coaches. A combination of 2+2 and 2+1 should ensure that almost every passenger is either sitting next to someone they know or have their own seat (or two seats) to themselves.
So what's the customer proposition? I'm not sure customers are necessarily motivated by more leg room. So perhaps the message is: "On V/Line services between X and Y, customers will either be seated with someone they know, or will recieve a five dollar voucher for a discount off their next ticket".
Just making the point that you have to bring it back to a customer message that will drive patronage and revenue.