Surface Transportation:

Availability of Intercity Bus Service Continues to Decline

RCED-92-126: Published: Jun 22, 1992. Publicly Released: Jun 30, 1992.

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Pursuant to a congressional request, GAO examined the condition of the intercity bus industry since its deregulation in 1982, focusing on: (1) the social and economic implications of this decline; (2) state efforts to support intercity bus service; and (3) policy strategies for the Department of Transportation (DOT) to consider as it develops guidelines to address intercity bus needs.

GAO found that: (1) regulatory relief for the intercity bus industry in 1982 did not revitalize the industry, and shrinking rural populations, increased competition from air and rail transportation, and increased car ownership led to reduced bus ridership; (2) intercity buses went from serving almost 12,000 locations in 1982 to serving fewer than 6,000 locations in 1991, and over the same period, the bus industry's share of intercity passenger-miles on public transportation fell from 12 percent to 6 percent; (3) the social and economic effects of declining intercity bus service are difficult to assess because data on the number and characteristics of users of the abandoned routes are scant, but available evidence suggests that the affected riders are those least able to afford and least likely to have access to alternative transportation; (4) 20 states have ongoing efforts to maintain or support intercity bus service, which include financial support for individual bus routes, funding for construction or rehabilitation of intermodal terminals used by buses, and providing new vehicles to bus firms at reduced cost; (5) the Intermodal Surface Transportation Efficiency Act of 1991 recognized the need to expand federal transit activities by requiring states to spend at least 15 percent of their allocations to assist intercity bus service; and (6) some states could face difficulty using those funds effectively because DOT has not decided what activities will be eligible to receive set-aside funds and because of federal labor protection requirements.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: FTA issued guidance in November 1992 which set broad eligibility parameters to allow states maximum flexibility to program intercity bus funds to most effectively address needs identified by the state. The guidance includes the points made in the recommendation.

    Recommendation: The Secretary of Transportation should direct the Administrator, Federal Transit Administration (FTA), when developing guidance to implement section 18(i) of the Intermodal Surface Transportation Efficiency Act, to clearly state the specific aspects of the arrangements between rural connection providers and intercity bus carriers that count toward meeting the required 15-percent set-aside and, in stating those aspects, to take into consideration marketing efforts and extended hours of service.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: FTA has determined that planning is an eligible activity and that the collection and analysis of data to determine needs is an appropriate planning activity. In November 1992, FTA issued guidance to implement section 18(a). Planning, including data collection, is an eligible activity.

    Recommendation: The Secretary of Transportation should direct the Administrator, FTA, when developing guidance to implement section 18(i) of the Intermodal Surface Transportation Efficiency Act, to determine whether states should be allowed to use a portion of the section 18(i) set-aside to gather data on the population that has lost intercity bus service in order to identify intercity bus needs.

    Agency Affected: Department of Transportation

  3. Status: Closed - Implemented

    Comments: The special section 13(c) warranty for section 18 is being applied by section 18(i). This is stated in FTA Circular 9040.1C, issued in November 1992. FTA plans to monitor the situation to ensure that problems do not develop due to application of the section 13 warranty.

    Recommendation: The Secretary of Transportation should direct the Administrator, FTA, to assess whether section 13(c) poses a barrier to using section 18 funds for intercity bus service. Further, if DOT finds that section 13(c) does pose a barrier, DOT should work with the Department of Labor to identify ways to reduce the barrier.

    Agency Affected: Department of Transportation

 

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