Government Regulations, Corporatism Kill Enterprising For-Profit Mass Transit


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.

Read both Reason articles: here, and here.

Personal Liberty

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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  • Ed

    I personally having worked with mass transit am upset that transit systems in areas other than the large metro areas receive large dollars to purchase buses that will carry 40 passengers and carry 2-4 passengers at a time, this need to be discontinued

  • shrgngatlas

    This is standard operating procedure in the world of crony capitalism.
    The big companies (who are also usually big political donors) lobby for
    regulations that they can afford, but that put their nimble small
    company competition out of business. The bigs then recover their
    regulation costs once the competition is gone by raising their prices.
    Of course, they can eventually kill their entire business if they’re not
    careful, and then everyone, including the consumer, loses. Ho hum,
    another day in the DC cesspool.

  • karl

    Government and corporat ebureaucracy is killing small business of all sorts – and killing jobs in the process. Of course, this is by design; it protects crony capitalists from having any competition while government bears down on our throats with its iron heel. Most of the loudest voices clammoring for “free markets” would have heart attacks if we ever actually HAVE free markets.

  • Ibn Insha

    There is no need for regulations. Only idiots need to be regulated. Free market regulates itself. Government regulates as a reason for its existence. If you take government’s authority to regulate away, politicians would not be able to get money from businesses for their political campaigns in return for regulations that hinder in the entrance of competition. That harms whole society.

  • Jimmy the Greek

    The same thing is happing in trucking !

  • E. Roman

    Public transportation should go away. Let the private sector handle that. Same with garbage and school buses.

  • Debbie

    Isn’t it strange that you never know what will hit you next in this government, Do they not care they are hurting the very people that they say need the help the most