The Motorcoach Industry: The Lowest Priority, Once Again

Most National Bus Trader readers can recite the majority of the ugly milestones that have hampered the motorcoach industry, big and small: Deregulation. 9-1-1. AMTRAK. COVID-19. The commercial airline industry (see https://transalt.com/article/expanding-the-mode-split-dividing-line-part-1-exponential-airline-industry-corruption/). Anti-idling regulations. Discriminatory law enforcement. Lack of parking facilities. Bridge, tunnel and freeway tolls. Traffic congestion. Seatbelt requirements. Transportation Network Companies (TNCs) like Uber & Lyft (see https://transalt.com/article/transportation-network-companies-even-worse-than-expected/). One might add the weakness of the motorcoach industry’s dual lobbying organizations – forced to face-off against exponentially larger lobbying organizations with endless resources. And, of course, there is corruption, particularly in the TNC arena. A particularly ugly form of discrimination against motorcoaches has always occurred in New York City. This installment involves the latest episode.

Living and working in NYC for 23 years (until the combination of COVID, the collapse of the City’s taxi industry and a few other things drove me into the nearby countryside three years ago), I have vivid memories of so many of these things:

·????????As a pedestrian in Lower Manhattan, I must have helped scores of motorcoach drivers (and hundreds of truck drivers) back up when they could not manage to turn right on that borough’s narrow streets – to avoid them having to drive up on sidewalks (see https://turningaccidents.com).

·????????I remember when, in the early 2000s, scores of coaches could park beneath FDR Drive (near the South Street Seaport, and other places) … and noticed the hardships when these parking places were shut down, and coaches had to deadhead to the upper west side to park (see https://transalt.com/article/making-public-transportation-work-part-2-park-and-ride-lots/) .

·????????I remember when the former Mayor began flooding the City with unneeded Ubers and Lyfts (see https://transalt.com/article/bad-regulations-and-worse-responses-part-1-introduction/; https://transalt.com/article/bad-regulations-and-worse-responses-part-2-the-rise-fall-and-transformation-of-supershuttle/; https://transalt.com/article/bad-regulations-and-worse-responses-part-3-invasion-of-the-tncs/; https://transalt.com/article/bad-regulations-and-worse-responses-part-4-judicial-heroism/; https://transalt.com/article/bad-regulations-and-worse-responses-part-5-executive-branch-responses/; https://transalt.com/article/bad-regulations-and-worse-responses-part-6-industry-and-association-responses/, and https://transalt.com/article/bad-regulations-and-worse-responses-part-7-conclusions/), which not only destroyed his City’s own taxi system, but drew riders away from the transit system (which deployed 1500 motorcoaches) and other modes.

·????????I obviously remember when the explosion of COVID (NYC experienced nearly 45,000 deaths, and 3.2M cases) practically eliminated motorcoach ridership (even while AMTRAK profits soared – see https://transalt.com/article/covid-19-shenanigans-and-liability-part-2-making-money-by-compromising-health/).

·????????And I have written extensively about the corruption in the commercial airline industry and how the motorcoach sector failed to respond to the extraordinary opportunities those practices provided (see?https://transalt.com/article/survival-and-prosperity-part-1-magic-corridors/; https://transalt.com/article/survival-and-prosperity-part-2-the-magic-coach/; https://transalt.com/article/survival-and-prosperity-part-3-the-gains-of-winning-the-cost-of-failure/, and https://transalt.com/article/survival-and-prosperity-part-4-service-concepts/).

But the latest episode of NYC’s corruption in favor of Uber and Lyft – that completely ignored the consequences of it for the taxi, limousine, transit and motorcoach industries – is too important to ignore.

Electrification and Electrocution

As exposés about Global Melting and Burning (aka Climate Change) explode almost daily in the news, many Americans increasingly recognize how fast our planet is being destroyed. The most recent article I noticed was a NYTimes piece about the drying up of the Colorado River (among a nation full of rivers and lakes) – see https://www.nytimes.com/2023/01/27/climate/colorado-river-biden-cuts.html. Frankly, the pros and cons of electric vehicles have become moot. We have no alternatives but to electrify practically everything we can that consumes fuel or energy of any other type. In fact, in many places full of vehicles, no reachable volume of wind turbines and solar panels can likely provide enough electrons for all the charging stations needed. So the closures of nuclear plants (like the decision to close one in California this past January, 2023) are a looming disaster (combined with California’s mandate that every vehicle shall be an electric one by 2035).

But a string of similar disasters has been our failure to decrease the number of vehicle miles of travel by failing to shoehorn travelers into larger vehicles. Our transit systems have irreversibly failed by creating too few park and ride lots (see https://transalt.com/article/making-public-transportation-work-part-2-park-and-ride-lots/), too few feeder systems (see https://transalt.com/article/making-public-transportation-work-part-3-feeder-service/), the use of few alternative work schedules (see https://transalt.com/article/making-public-transportation-work-part-1-alternative-work-schedules/) and our pitiful failures to design public transportation systems of any kind (see https://transalt.com/article/making-public-transportation-work-part-4-system-design-and-networks/) – as we focused instead on directing the robots that increasingly began designing routes and schedules and selecting stops more than 30 years ago.

All these failures have, individually and collectively, effected a mode split from larger vehicles to smaller ones – in the process, increasing the number of vehicle miles every motorist or passenger must travel, and bringing traffic on many freeways, and in parts of many or most major cities, to a crawl. While fixed route transit has suffered the most from these failures, the motorcoach industry has suffered as well.

Many motorcoach companies had to become low-profit-making contractors to transit agencies in order to survive. I was recently involved, as an expert witness, in a case where reputable and otherwise successful motorcoach operator was forced (largely by the loss of business from COVID) into becoming a contractor to a County in New Jersey – operating a route which carried less than one passenger per hour. Otherwise, as noted, the motorcoach industry failed to take advantage of the opportunities for greatly expanding medium distance, intercity trips to compensate for the collapse of commercial airline service.

While not necessarily the largest constraint faced by the motorcoach industry, a recent transgression by New York City “rubs it in.” This transgression, which reeks of corruption, is the recent decision by newly elected Mayor Eric Adams to mandate that every Uber and Lyft vehicle be an electric vehicle by the year 2030.?This mandate applied to no other vehicle – including the City’s own taxi fleet.

Corruption Disguised and Unfettered

A reader unfamiliar with Uber and Lyft’s genuine profit-making structure (as I am) might be scratching his or her head. Most TNC passengers and non-passengers alike are under the impression that Uber and Lyft drivers are operating only their own personal cars. ?If so, how could these individuals – NYC finally “capped” the number of Ubers in the City at 60,000! – possibly afford electric vehicles?

As an expert witness who has worked on a number of TNC cases, for example, I am thoroughly familiar with the reality that underlies this puzzle. Believe it or not, many TNC drivers do not operate their own vehicles. Instead, they operate rental cars, often from a subset of the rental car company’s fleet “set aside” specifically for TNC drivers. In one case, after a TNC driver totaled two rental company’s cars in his first five months of driving, he was forced to rent the next one from another car rental company – a company presumably aware of his driving record with the first one.

Now here’s the first rub where things get nasty, and where this arrangement translates into mayhem. The car rental arrangement with which I am familiar could have cost the driver $200/week. However, if he (or any other car rental customer driving for a TNC) provided 150 or more trips per week for that TNC, that TNC would pay the car rental fee – in full.

Now think about this for a moment. Focus on the fact that many TNC runs (as well as those of taxis and limousines) involve airport runs – long runs which often involve a long deadhead back from the airport to the city. (Unlike taxis, which must then deadhead to the end of a queue to “move up” in order to pick up an outbound passenger, an Uber or Lyft driver simply needs to be the closest to a potential passenger who “summons” the next Uber or Lyft through his or her app, and the closest vehicle to that would-be passenger [summoned as a result] then picks up that passenger.) At the airport, of course, this can mean bumper-to-bumper congestion in the roadways in front of the airport terminal. So rather than await or accept this trip, many of these vehicles simply deadhead back to the city. With or without a rental car, this trip to the airport and deadhead back to the city can easily consume two hours. Yet:

1.?????Most Uber and Lyft drivers cannot afford electric vehicles now, and will not likely afford them when operating them in Manhattan becomes a mandate in 2030.

2.?????So many of most of these drivers will be renting cars – just like many do in California (and likely in other states).

3.?????There are only 168 hours a week.

4.?????One must provide 150 trips in order for the TNC involved in the lawsuit noted to pay the car rental fee (at least in 2022).

5.?????Every driver must spend some of these 168 hours sleeping.

6.?????Those individuals who get much less than eight hours’ sleep a night (think about FMVSS hours-of-service regulations) are likely to be fatigued. No sleep translates immediately into driver and motorist fatigue.

Now, place these figures in perspective:

1.?????You are driving a rental car costing $200. (An electric vehicle will almost certainly rent for far more in 2030.)

2.?????After 166 hours, you managed – incredibly – to pick up only 148 passengers.

3.?????Your eyelids are so heavy that keeping them open would snap the average wooden toothpick in half.

4.?????But if you fail to pick up two more passengers in the next two hours, this failure will cost you much more than $200 (inflated, again, by the cost of renting an electric vehicle in New York City, in 2030)

What choice would most Uber and Lyft drivers naturally make if they engage in the business practice noted above – much less in New York City, where the traffic is as stifling as the cost-of-living?

1.?????Pull to the side of the road and take a nap (keep in mind, that driver already provided 148 trips that week).

2.?????Somehow manage to provide two more trips – whereby the TNC will pay your car rental fee?

Exhaustion and Extortion

It is obvious what choice most drivers would make given this scenario. In the one lawsuit in which the driver faced this choice – I have no idea how close to the magic 150 trips he was at the time – on his way home 90 minutes away from his last drop-off, after roughly a 12-hour shift, he ran through a red light and mowed down a pedestrian in a crosswalk. The average, even-sophisticated trade magazine reader cannot imagine the settlement value of this set of facts. Would a TNC actually go to trial (much less against someone like myself as the expert) in a case where the expert would expose this business practice on “the public record?” As the expert witness in that case, I would never reveal the settlement, the parties (including the specific TNC or car rental companies involved), the attorneys, or even the venue (other than this one having occurred in California, whose population of more than 39 million makes any identification of any party practically impossible) – or anything else. But the value of a case with such facts would be awesome if the plaintiff’s attorney paid attention and was willing to do some work.

The reality is that all these cases settle -- and thus, no public record is ever made of an actual case where these factors caused a specific individual’s death or injury. Regrettably, most settle for far less than a savvy plaintiff’s attorney would make them settle for. Frankly, such defendants cannot afford to go to trial on cases with such facts – and would most likely settle for a small fortune – especially, again, as neither the plaintiff’s attorney nor his or her expert can reveal any specific facts about the case, as noted. So, as a consequence, these companies continue to engage in such business practices, virtually unimpeded. Would an elected official know this? I doubt it. More interestingly, would the typical elected official care – even if he or she knew? I will let the readers speculate about this point. But it is almost certain that, in whatever deal was made with Uber and Lyft, Mayor Adams gave little thought to its impact on the survival and prosperity of other modes – like his City’s own transit and taxi systems, much less motorcoach and limousine services. ?

Promotion and Exclusion

The reader has to wonder what benefit Mayor Adams achieved from this deal. I myself wondered – way back in 2015 – what former Mayor De Blasio got when he allowed 15,000 Ubers to operate in the City by the end of 2015 (there are 60,000 operating in the City now). Had they paid the going rate for a taxi medallion, then valued at roughly $1.1M, these first 15,000 Ubers would have produced roughly $16.5B in revenue to the City. ??Of course, since there were only 13,000 taxis operating in the City at that time, and the cost of a medallion helped to balance “supply and demand,” few of these additional Uber drivers would likely have paid almost anything for a medallion. So, the magnitude of funds calculated as actually lost by the City in exempting these drivers from paying for taxi medallions is highly exaggerated. But some level of funds was surely lost.

This tomfoolery is a somewhat sophisticated ruse. As a Manhattan resident at that time, who traveled largely by a combination of subway trains and taxis, I had many, many discussions with “cabbies.” For a while, some of them placed bets on what month the mayor would “swim with da fishes.” When his last swim never materialized, some began to wager on where his hidden bank account was (the most common bets were placed on Zurich, Luxembourg and the Grand Cayman Islands – as I recall from a series of chit-chats with various drivers.) One can only imagine what the bets are about now, after new Mayor Adams anointed Lyft and Uber to future climate change heroes in a City full of Liberals just yearning to breathe free (or at least yearning to breathe cleaner air).

Far afield from the motorcoach industry, the local press – particularly The New Yorker -- has not been kind to Mayor Adams. A few months ago, its weekly restaurant review completely (and inaccurately and unfairly) panned the restaurant in which he spends considerable time, owned by some of his seemingly many ex-convict friends. The January 30, 2023 issue of The New Yorker contained a seven-page exposé about him titled, “Friend of the Mayor” – about another of his friends with a sketchy history. So, one can only wonder about the decision to elevate Uber and Lyft to climate change heroes – much less when not imposing the same requirements on his own City’s taxi drivers (or their vehicles’ owners).

That most of the City’s remaining taxi drivers (11,000 of them were dispatched to deliver food in the heart of COVID – instead of mode-splitting passengers who were forced to ride, often elbow-to-elbow, during certain times of the day, on certain subways and bus lines) were effectively fleeced of most of the value of the hundreds of thousands of dollars they (and their extended families) paid for their medallions is an afterthought – although it was given severe and warranted treatment by the NYTimes (see https://www.nytimes.com/2019/05/19/nyregion/nyc-taxis-medallions-suicides.html).

Completing the Circle

Apart from the safety implications of the Uber and Lyft anointment, and the corruption this anointment suggests may exist, it only added to the already declining prosperity of the City’s transit and motorcoach fleets, and thousands of private-sector-owned motorcoaches serving the City from areas throughout the Atlantic Seaboard, New England and the Midwest.

The motorcoach industry is hanging by a thread. In one lawsuit in which I was engaged, noted above, an otherwise profitable, medium-sized, family-owned motorcoach company was serving as a contractor to a suburban New Jersey County – operating a fixed route bus line that provided less than one passenger trip per hour. This coming July 1, 2023, the District of Columbia – which has the nation’s second-highest percentage of its operating costs covered by farebox revenue – is going to eliminate fares altogether. How much longer can one expect American taxpayers to accept such realities? In light of these facts, why would anyone not understand why so many Americans are fiscally conservative?

Perhaps New York City has some exotic right to wallow in corruption and waste in transportation. After all, NYC possesses the nation’s highest percentage of operating costs covered by farebox revenue – 35 percent. (This figure is nine percent in Los Angeles, and 13 percent in San Francisco – where, in both cases, the lower-density cities surrounding them are served by smaller municipal transit agencies. In other words, L.A. and San Francisco are hemorrhaging billions of dollars a year even while they operate in their respective counties’ highest-density areas.)

As I have predicted in past National Bus Trader articles, I suspect that many, many cities – particularly in the South – will begin to abandon transit in the next few years. And there will be no Lyndon Johnson to rescue them a second time, as he did in 1964 and 1967 – especially as the farebox recover ratios cited above include the facts that Federal funds from those first two rescue efforts already cover much of transit’s operating costs in even the most efficient cities, and cover 80 percent of the costs of all their vehicles and other capital expenses.

As more and more taxpayers and their representatives will say to transit, “Hasta la Vista,” I say about all of this, “Aye, Caramba.” (So too might Bart Simpson if a few writers cover this part of our nation’s collapse.) The fact that such dynamics will also drag down the motorcoach industry with them is a particular tragedy more important to the readers of National Bus Trader.