Government Regulations, Corporatism Kill Enterprising For-Profit Mass Transit
July 16, 2013 by Ben Bullard
The government is once again interjecting a host of regulations into the busing industry, cowing to pressure from large motor carriers to set the bar impossibly high for dozens of startup companies that, until they were shuttered all at once by the DOT, were growing their businesses while efficiently satisfying rider demand.
The American busing industry is one long saga illustrative of what happens when the government intervenes to artificially stifle competition while paying hypocritical lip service to the importance of rider safety.
The most visible – and perhaps the most missed – casualty of the DOT’s March closure of 26 small bus companies is that of Fung Wah, a New York-to-Boston curbside pick-up service begun by Chinese immigrants in 1997. The company had a major rollover in 2006 that injured 34 people, along with several other accidents that drew scrutiny from safety watchdogs and, predictably, the Greyhounds and Peter Pans of the transportation world.
Reason has two in-depth pieces on the government’s insincere choke-out of small carriers in the name of public safety. Looking at highway safety stats for both buses and automobiles, the organization found that even the rattiest fleet of buses offers a better chance at getting passengers to their destinations unharmed than private automobiles do.
While horrific accidents occur periodically, buses are not only orders of magnitude safer than passenger cars, they’re safer than they’ve ever been thanks to engineering and manufacturing advances. There are about 34 fatal intercity bus accidents annually as compared to 23,000 fatal passenger car crashes. An unintended consequence of the regulatory onslaught is that higher ticket prices will lead fewer travelers to forgo their cars for the bus, making them far more likely to die on the highway. What safety-anxious parent would prefer their college offspring to catch a ride home in a car driven by a fellow student rather than take the bus?
… The new regulatory regime that ensnared Fung Wah is in danger of bringing intercity busing back to what it was like for much of the 20th century, when a cartel of large companies (particularly Greyhound) dominated a declining industry. President Reagan deregulated busing in 1982. That made it possible for Pei Lin Liang and others to open their own companies and reinvent the business 15 years later. The new competition forced Greyhound and the other big carriers to relearn how to fight for customers; with all the shutdowns, they won’t have to fight so hard.
The point isn’t that mass transit is some utopian alternative to be preferred over automobiles. Rather, it’s that the government is lying if it claims its newfound zeal for regulating the bus industry is about safety and not about influence/control/money.