Office of Advocacy

May 27, 1998

The Honorable Rodney E. Slater
Department of Transportation
400 7^th Street, SW
Washington, DC 20590

Re: March 25, 1998 proposed rule for Transportation for Individuals with Disabilities

Dear Secretary Slater:

The Office of Advocacy submits the following comments on the Department of Transportation's (DOT's) March 25, 1998, proposed rule for Transportation for Individuals with Disabilities.(1) Please include these comments in the public record.

The Office of Advocacy was established by Congress under Public Law No. 94-305 to represent the views of small businesses before Federal agencies and Congress. Advocacy is also required by §612 of the Regulatory Flexibility Act (RFA)(2) to monitor agencies' compliance with the RFA and report annually to the President and Congress.

Introduction

This office recognizes that the DOT is under a court order to finalize this rule by September 15, 1998, to accommodate the transportation needs of the disabled. However, we believe that this accommodation can be accomplished without sacrificing other ridership markets dependent on bus transportation. We do not believe that compliance with the Americans with Disabilities Act (ADA) or the Court's order dictates such an outcome if there is an alternative that, in effect, broadens transportation accessibility to the disabled while ensuring continued service to other riders. Therefore, we urge DOT to craft a regulatory solution to expand transportation accessibility for the disabled that balances this objective with the interests of all riders and the economics and survivability of certain sectors of the transportation industry.

It is clear from our discussions with the small bus carriers and from information developed by the DOT that many Americans depend on buses for transportation, particularly those that live in lower income communities or persons who reside in rural areas.(3) Any rule which could cause small businesses to reduce the transportation services available to these individuals and to the public as a whole, should be examined more fully by the DOT.(4)

Overview

DOT is proposing a regulation which would require that new purchases of over-the-road buses (OTRBs) be accessible to passengers with disabilities and further require bus companies to provide accessible OTRB service. The proposed rule applies to both fixed-route and charter/tour operations. The objective of the proposed rule is to ensure that all OTRB service will eventually be provided to passengers with disabilities. We strongly support that OTRB service be available to all members of the public, especially to passengers with disabilities.

It is clear that the disability community and the OTRB industry hold different views on how bus service to passengers with disabilities should be provided by the bus industry. The disability community seemingly believes that all buses should be accessible to passengers with disabilities to ensure equal treatment. The bus industry believes that a "service-based" approach, one which ensures that service is provided to passengers with disabilities, would accomplish the objective. This service-based approach could do so without running the risk of imposing significant economic costs on small bus companies, costs that might result in reduced services to other markets and, ultimately, to the disabled and other isolated communities.

The rule as proposed is attempting to implement the nondiscriminatory treatment of the disabled as mandated by the ADA.(5) The ADA was passed by Congress in order to prohibit discrimination against persons with disabilities and Title III of the Act prohibits private entities in the transportation business from discriminating against individuals on the basis of a disability.(6) The law does not, however, require total parity. DOT has the legal discretion in developing the regulation to consider both vehicle-based and service-based approaches and may also consider other mitigating factors such as cost.(7) We urge DOT to utilize this discretion by examining the economics of the current rule and viable regulatory alternatives.

Economic Considerations

In analyzing the economic assessment of this proposed rule the Office of Advocacy is concerned about the assumptions of the economic estimates used, the limited amount of data available for analysis, and increased costs for bus service. The increased costs associated with this proposed rule will most likely result in greater competition from other modes of transportation and the loss of transportation services to rural areas.

DOT has determined that this rule, as proposed, will have a significant impact on a substantial number of small entities. This office agrees with DOT's conclusion. It is imperative that the DOT understand the current condition of the bus industry before moving forward.

DOT must be careful when creating regulations which will impose cost increases to businesses experiencing financial difficulties, such as some small bus carriers. The nature of the bus transportation industry is such that competition exists between bus carriers and other modes of transportation; i.e., car, train, taxi, air, etc. (A typical rural intercity route is only serviced by one bus company.) As bus passenger revenue has decreased over the years, there has been an increase to revenue generated by other modes of transportation. From 1980-1995, intercity bus passenger revenue has decreased over 12%, while the competition of intercity air travel increased 115% and rail travel increased 45%.(8) Any increase in costs resulting from this regulation would most likely increase bus ticket fares. This could cause an additional loss of passengers to other forms of transportation. Such a sustained loss would result in a carrier dropping a route altogether, continuing the decline of bus transportation service to rural areas.(9) Additionally, unlike public transportation, a government subsidy does not exist for private bus carriers. The federal government does not require a business to operate an unprofitable entity and profit driven companies will not serve unprofitable, often rural, routes.

In evaluating the economic assessment, DOT has indicated that economic information was sparse, including cost and revenue data on the industry. Follow-up efforts to locate service, workforce, and financial data in existing databases have not been fruitful.(10) Additionally, the economic assessment is difficult to digest because of the disconnect between the assumptions and judgments made in the text and the numbers placed in the tables. Commendably, the DOT is continuing to solicit information from the small carriers who will be affected by this rulemaking. We, however, remain concerned about the consequences of moving forward with this rule without reliable economic impact data.

A judgment in the economic analysis generating great interest is the projected increased ridership due to this rule. The small bus industry has questioned DOT's economic model used to evaluate ridership estimates. DOT estimated that the traffic stimulated by this rule would reduce the cost to a range of $19.2 to $25.3 million per year.(11) However, the industry has indicated that the current demand has been little to non existent, even from those bus carriers who have already purchased an accessible bus. Based on admittedly anecdotal data provided by firms that have tried to market their services to the disabled and allegedly failed to develop this market of riders, it is uncertain that prescribing equipment purchases for accessible buses will increase service demands anywhere near DOT estimates.

The bus transportation industry has suffered economic setbacks over recent years. Many counties have been losing intercity bus and rural connections, as carriers have dropped many of their less economical routes.(12) In fact, according to the DOT, rural carless households averaged only 38 transit trips per year, versus 231 trips in small cities and 1,223 trips in large cities. Many of these rural trips, however, were for "essential" purposes: access to employment opportunities (20 percent), to health care (14 percent), and to nutritional and social service programs (17 percent).(13) DOT must carefully assess the impact of this rule on both the industry and the communities which it serves. The industry has expressed concern that an equipment mandate will cause the industry to further abandon existing routes. Continued erosion of bus service as the result of government regulation is not in the public interest.

In addition to a reduction in routes, the industry has identified several other potentially adverse economic impacts of this rule, including:

• The increased expense imposed by this rule could force the closure of some small bus carriers who have already been operating at a loss for many years. This is especially troublesome for fixed-route operators who serve rural communities as the only provider of mass transportation.
• Many small bus carriers enter into arrangements to share equipment with large carriers. Some small carriers are concerned that the equipment quotas assigned to the large carriers will cause them to incur greater expenses within a shorter time-frame, making it extremely difficult for these necessary partnerships agreements to continue.
• Bus companies often use the same buses for multiple operations, both fixed-route and charter service. It is unclear which of the provisions of the rule will apply and what expenses a small carrier would incur based on this practice.

These and other economic impacts must be evaluated prior to publication of a final rule.

Recommended Regulatory Alternative

Section 603 of the RFA requires that agencies discuss significant regulatory alternatives which accomplish the stated objectives of the rule while minimizing any significant economic impact on small entities.(14)

On April 30, 1998, the United Motor Coach Association, the American Bus Association, small bus carriers from various localities, the DOT, and the Office of Advocacy met to discuss this proposed rule. At that meeting, the industry affirmed their commitment to serve all passengers with disabilities. The bus companies presented their concerns, however, that, the rule as proposed could force the closure of some small businesses and further reduce transportation options to passengers, both with and without disabilities, who rely on less profitable routes. Industry representatives strongly urged DOT to review a Canadian proposal to establish a service-based system serving passengers with disabilities to determine its effectiveness and applicability in the United States. The industry implored DOT to allow small bus carriers to prove their commitment and ability to serve all disabled passengers through a similar service-based system, prior to imposition of costly equipment purchase mandates.

A service-based alternative would provide better long and short term transportation to all passengers, including those with disabilities. The current proposed rule allows for an extensive phase in period for both large and small fixed-route and charter/tour operators. This office is concerned that in the time it takes for operators to purchase new buses, passengers with disabilities will go without service. Advocacy urges DOT to consider a service-based approach which could be made effective within a short time-frame. This system would allow for passengers with disabilities to obtain service sooner and at less cost to industry, while maintaining current routes and services. Some of the components of a service-based alternative are listed below:

• A service-based approach will ensure that the industry has an adequate number of buses to meet demand. Industry will make a commitment to serve all passengers with disabilities. When demand necessitates the purchase of an accessible bus, the company will do so to accommodate its passengers. If passengers are confined to a wheelchair, service will be provided while the passenger is seated in their own wheelchair on such a bus.
• In order to ensure the best service, passengers with disabilities could be encouraged to make an advanced reservation for fixed-route service. Advance notice may be particularly important for small companies where there is limited demand or requests for service from passengers with disabilities. For instance, twenty-four hour notice may be appropriate for some routes in order to prepare for the arrival of the passenger. For heavily traveled routes advance notice may not be necessary.
• Current practice dictates that advance planning take place in order to reserve a bus for a tour or charter excursion. At the time of reservation, the customer indicates their accommodation requirements. This current industry practice for charter and tour service should remain in effect.
• In the case where a passenger with a disability feels that they have not been accommodated by this system, they may seek redress through a mandated complaint board. The ADA, which covers businesses which provide privately operated transportation services, establishes a process by which violations of the Act can be mediated to resolve complaints. This type of mediation program may serve as a model to the DOT in constructing and implementing a complaint resolution process. (Another model might include the compensation system similar to that used by the airline industry.) Bus operators who are determined by such a board to have failed to provide service to a disabled passenger could be penalized. Through the use of a penalty system the industry will have a further incentive to serve all passengers.
• Advocacy also recommends that DOT, the disability community and the bus industry commit to a public service campaign to alert the disability community that accessible service is available. This type of information could be made available through various communication modes, such as, television and radio public service announcement, via the Internet and through advocacy organizations and trade publications. This campaign would serve as an additional means of opening the doors of transportation to all members of our society.

Conclusion

The DOT has undertaken a difficult, yet worthy task -- to ensure that bus transportation is available to persons with disabilities. The nature of the issue, however, makes the task complex. The potential adverse impact on small entities should not be dismissed. Two major questions remain unanswered: What will be the rule's impact on the overall accessibility to transportation if carriers are forced to reduce or eliminate services? Are there less costly and equally effective alternatives, including a service-based approach, that should be tried until the DOT and the bus industry weigh the impact of this rule on all members of our society who rely on buses for transportation?

We are aware that the disability community views equal access to private transportation as a right. We do not disagree. We advocate that the DOT allow for the industry to ensure service to passengers with disabilities without mandated equipment purchases. The equipment requirements could result in the elimination of services to less profitable routes, thus, undermining an equally important public policy objective -- affordable transportation for all.

Advocacy commends DOT for meeting with small businesses affected by this rule. We urge DOT to continue to review the docket carefully and fairly assess a service-based approach prior to completion of this rule.

Please call me or Sarah Rice or Claudia Rayford of my staff at (202) 205-6532 if you have any questions or if we can be of assistance.


Sincerely,

Jere W. Glover
Chief Counsel for Advocacy

cc: Donald Arbuckle, Acting Administrator, OIRA

ENDNOTES

1. Fed. Reg., Vol. 63, No. 57 (March 25, 1998).

2. 5 U.S.C. §§601 et seq.

3. For 1990, the U.S. Bureau of the Census reports that 61,656,000 people resided in rural areas, 24.7% of the U.S. population.

4. DOT estimates that the cost of the rule will increase the cost of a new bus purchase by 10%. Assuming a unitary price elasticity, DOT concludes that 10% fewer buses will be purchased. Preliminary Regulatory Assessment, p. III-21. Based on this estimate, buses, particularly older non-lift equipped buses, will be on the road longer and/or a reduction in service will occur. The result of which could limit transportation services to both passengers with disabilities and the general public. Such an adverse outcome would be contrary to the public interest.

5. Fed. Reg. Vol. 63, No. 57 (March 25, 1998), p. 14564.

6. 42 USCS § 12184 (a).

7. Fed. Reg. Vol. 63, No. 56 (March 25, 1998), p. 14564.

8. Eno Transportation Foundation, Inc., Transportation in America, annual; taken from the Statistical Abstract of the United States, 1997.

9. According to DOT, the number of points served by intercity buses has declined from 17,000 to 6,000. Preliminary Regulatory Assessment, p. II-4.

10. Preliminary Regulatory Assessment, p. 1-4.

11. Preliminary Regulatory Assessment, p. IV-1.

12. Department of Transportation, Transportation Statistics Annual Report 1997, p. 183.

13. Department of Transportation, Transportation Statistics Annual Report 1997, p. 184.

14. DOT should also consider the impact that this rule could have on small communities and businesses which rely on service or customers from bus travelers. An example could include a restaurant located at the bus depot which provides service to travelers.

* Last Modified: 6/14/01