New charter bus regulation and special event transit

In January, the Federal Transit Administration issued a new regulation on charter bus service provided by public transit operators. The new regulation is set to take effect by the end of this month.

Generally, transit agencies are forbidden to offer charter service except for limited circumstances. The reason behind the ban is that unlike transit agencies, private charter bus companies don't receive taxpayer subsidy, and that allowing transit agencies to offer charter service is considered unfair competition.

Traditionally, charter service means an exclusive transportation for a group of people traveling together, and the service is generally charged per vehicle. The new rule, however, has expanded the definition of charter service. It now includes service to special events that charges premium fares and/or subsidized by a third party, a service that many transit agencies provide across the country, including VTA.

For many years, VTA, along with SamTrans, Muni, Golden Gate Transit and Tri-Delta Transit provided special bus service to the 49ers home games at Candlestick Park. During the last football season, VTA charged $21 per round trip or $118 per season and no other passes are honored. VTA and other agencies had to charge premium fares to maintain a very high farebox recovery ratio. Because very little operating subsidy is required, these services continued despite funding cuts on transit over the last few years.

Under the new regulation, transit agencies cannot offer premium fare or sponsored service to events as long as there is a private operator "willing and able" to provide the service. Even through many charter bus companies would like to see expanded business opportunities, it is still not clear whether they will be able to provide a service equivalent to what transit agencies have been providing. For instance, virtually every bus on every transit agencies' fleet is wheelchair accessible, whereas for many charter companies only a portion of their fleet is accessible. Also, most special event bus service begin their route at a park and ride lot owned by transit agencies or at a transit center, both which charter operators may not have permission to serve. Finally, if the service is not sponsored by a third party like the football service, will charter operators provide open door service where passengers can pay when boarding, or a service where advanced reservation and payment is required.

The new charter bus rule is having an impact across the country, as various transit agencies are asking FTA for exemptions and clarifications to serve major events (including Olympic trials and Kentucky Derby) scheduled within the next few months. Beyond that, it can also change, if not eliminate, the role for transit at venues with no adjacent rail service, such as the Candlestick Park and the proposed A's Ballpark in Fremont.