In my post about the crazy law passed last week by the New York State legislature to (over)regulate private curbside buses in the city, I asked for help getting the word out. I got numerous tweets and retweets, and two of the three people I asked by name responded. Matt Yglesias wrote a nice blog post highlighting the burden caused by requiring a "traffic study" for each new bus stop permit, and noting the double standard for buses versus cars. John Stossel had a post highlighting the connection between private enterprise and innovation, which is particularly strong in the transit field. Some nice person also reddited my post.
And for the record, I totally understand why Tom Vanderbilt didn't respond to my call. It's not really his area, while both Yglesias and Stossel have written specifically about private van services in the past. But thanks for everyone who took up the call! I doubt we'll get this thing repealed any time soon, but hopefully more people will be watching the next time this comes up.
So I promised you an explanation for the bizarre urgency with which politicians and (non bus riding) "community members" achieved consensus on the issue of regulating (out of existence) intercity curbside bus pickup here in New York City. The explanations they gave - chaos, danger, congestion - were unsatisfying, in part because these were all things that were already regulated. I've got another explanation: barriers to entry.
It's been widely observed that much regulation is pushed by existing businesses to make it hard for new competitors to horn in on their territory. Just the other day, Planet Money's Jacob Goldstein said that they like to "claim that they're dangerous" and need to be regulated. The more established private operators like Greyhound and Adirondack Trailways pay a "gate fee" to the Port Authority for use of their terminal. (This gets weird when small commuter bus lines like DeCamp get free buses from the New Jersey Department of Transportation to reduce their capital expenditures, because it becomes a net transfer of funds from the State of New Jersey to the Port Authority.) Curbside buses pay almost nothing for their street space, which was thrown in the faces of the established companies when Megabus relocated to 41st Street, in between the two wings of the Port Authority Bus Terminal.
One weird thing is that Megabus is owned by the conglomerate Stagecoach, from the city of Perth in Scotland. You would think that it would then be the patriotic thing to support the companies that rent in the Port Authority, but the biggest, Greyhound, is owned by First Group, headquartered in Aberdeen, Scotland; we're really just pawns in some giant multi-generational clan war. The other big non-Chinese curbside bus company, Bolt, is a joint venture between Greyhound and Peter Pan (a family-owned business based in Springfield, Massachusetts). Stagecoach actually owns a whole portfolio of small profitable bus operators that rent inside the Port Authority under the Coachusa brand: Short Line, Red and Tan, Suburban. The lawsuit itself is more First vs. Stagecoach than anything else: Bolt is not trying for a near the Port Authority, and is not being sued, and the Coachusa companies haven't joined the suit.
A big factor is definitely the established companies putting up greater barriers to their curbside competitors. There's another factor here, that I'll get into soon.