The State of the Bus Industry

This is the “Year of the Bus” for the Transportation Practice Group at Windels Marx, as we expand our team, offerings/services, and client base. Our practice and firm have been representing the private bus, motorcoach, and school bus industries since its inception, but the number of clients has increased dramatically since the pandemic and beyond. Our knowledge of – and services relating to – the industry includes motorcoach operations, transit bus operations, regular route service, charter service, transportation facilities, and all other matters relating to bus transportation. In addition to representing the limousine industry’s increasing use of buses and entry into the marketplace, and our client, the National Limousine Association (NLA), our firm has been representing Bus4NYC, the NYC trade group, since its inception. We have also performed extensive pro bono work over the years for many state and regional bus associations, as well as state and local limousine trade groups.

To kick-off our commitment to expansion, at the start of 2025, our team attended the American Bus Association (ABA) Marketplace in Philadelphia, where we met with many existing and future bus clients, and engaged in a discussion about the recently implemented congestion pricing scheme in NYC. This meeting inspired me to share with our readers what we believe to be the state of the bus industry currently, and why I believe it will expand significantly over the next several years.

As the Transportation Practice Group celebrates its 15-year anniversary, it is fitting that we commit our efforts to help the bus industry grow and realize its full potential. The industry is certainly a critical part of the ground transportation infrastructure for the U.S., solely based on the numbers of passengers. Additionally, the operations are significant as a means to address congestion mitigation with the numbers of passengers transported per mile and the number of personal vehicles each bus can replace for commuters and non-business travelers. Buses are the first – and likely the oldest – form of shared mobility, and helping the bus industry helps achieve affordable service and supports sustainability goals. If you would like to discuss these trends and/or if you need help with any legal, regulatory or business issues, please feel free to reach out to us. All Aboard!

The State of the U.S. Bus Industry

Bus service and ridership data are collected and analyzed annually by the Federal Highway Administration (FHWA) – part of the U.S. Department of Transportation (US DOT). Additionally, the Federal Transit Administration (FTA) collects and analyzes public transportation data annually within its National Transit Database (NTD), which includes all public transportation services provided by FTA grant recipients, their subcontractors, and other providers of public transportation who have voluntarily submitted data. These data convey bus service and ridership trends over the past several years. Of all registered vehicles in the United States, approximately 4.91% are trucks and 0.33% are buses. Despite this small percentage of vehicles, buses are incredibly important in the carriage of passengers: 7.78% of all motor vehicle passenger miles are transported by bus.

Bus service and ridership had been modestly increasing up through 2018, leveling out since then, but with a noticeable decrease in 2020, the start year of the COVID-19 pandemic. Data for the public transportation sector shows more challenging trends. Service and ridership had been increasing slightly through 2014, but thereafter started a downward spiral. A dramatic ridership decrease occurred in 2020 with the start of the COVID-19 pandemic, further decreasing in 2021. Thereafter, public transportation ridership increased somewhat, but in 2023 had rebounded only to 60% of the peak ridership in 2014. Despite the sharp decline in ridership, transit agencies continued providing nearly full service, which resulted in a decrease in service effectiveness (e.g., ridership per mile). Left unabated, this trend will create funding crises throughout the public transportation industry.

The Motorcoach Industry

Another portion of the larger bus industry is the motorcoach sector. In 2022, the ABA released a report showing the effects of COVID-19 on the motorcoach industry, concluding that “[t]hese losses have continued to this day, and the industry is showing little sign of improvement.” The industry lost 82.6% of its business in 2020, and posted a 62% loss in 2021. Since then, passenger miles and miles traveled have experienced a significant post-COVID recovery, but the industry continues to lag.

In late 2024, the American Bus Association released its Motorcoach Census 2024, highlighting the state of the industry in the year 2023. The motorcoach industry is dominated by small companies that operate fewer than 25 motorcoaches. Three-fourths of all companies in the industry operate fewer than 10 motorcoaches. The types of services provided by the industry are the following:

Source: ABA 2024 Census

In total, in 2023 the industry operated 1,600 million miles, using 47,946 motorcoaches, and transporting 38,000 million passenger miles, in the United States and Canada combined. In comparison, in 2019 1,770 million miles were operated, using 38,516 motorcoaches, and transporting 61,940 million passenger miles. Charter is the largest segment of the industry, providing individual trips, tailored to a specific client’s needs, with regulation of safety, limited government permitting, and ADA obligations, but little in the way of policy matters. It is the fixed route and scheduled service that is most regulated, most visible, and which requires the greatest amount of attention. This is where the operational and legal issues are at their highest, especially with respect to the adequacy of operating authorities, contracting with passengers (i.e., tickets), other carriers, and with public agencies (both as to intercity service pursuant to section 5311(f) and urban transit service).

Intercity Bus Transportation

In February 2025, The Chaddick Institute for Metropolitan Development at DePaul University issued its annual outlook for the intercity bus industry in the United States. The Institute noted the growth in the New England bus network and in the Northeast overall – particularly the expansion of service by Peter Pan Bus Lines between Boston and New York, which occurred as Coach USA was shutting down its Megabus operations. In a subsequent webinar sponsored by the institute, Peter Pan’s management explained the importance of 24-hour operations, and noted that it has good ridership even on scheduled departures at 3:00am.

Executive class bus services, generally with 2+1 seating, have also expanded in several markets. Most notably, Landline has expanded its provision of air service replacement operations at Philadelphia, Minneapolis, and Denver, with many routes being operated under contract with American Airlines. A growing problem is that of center city bus terminals being closed and redeveloped for non-transportation purposes. Philadelphia recently joined the ranks of cities with no city center bus terminal, and Chicago may be next. Bus passengers in these cities are compelled to stand around on city sidewalks, oftentimes with no seating, shade, food, or restaurant facilities. Countering these trends elsewhere, New York City is moving forward with plans to replace its Port Authority Bus Terminal with a new facility.

In a presentation to the Chaddick Institute, Wanderu, a Boston-based ground travel search engine and booking platform, noted that 90% of the tickets it sells are for trips under 300 miles. Average bus ticket prices have increased from $68 in January 2024 to $74 in January 2025. A final observation of Wanderu has been that its clients are very price-sensitive.

Based on its research and current trends, the Institute has made six predictions:

1. Intercity bus ridership will grow 4% in 2025, a rate substantially above the projected 2.4–2.8% growth of domestic auto and air travel by the U.S. Travel Association. Service expansions in the Sunbelt and Southwest lay the groundwork for a particularly strong year in these warm-weather areas. Traffic will be flatter in the Midwest, Mountain States, and Pacific Northwest.
2. State-supported bus networks will see more expansion. These networks are less vulnerable to the impending “fiscal cliff” than public transit systems and are laying the groundwork for service additions.
3. Notwithstanding the revenue assurances offered to intercity bus companies by state contracts, there is little assurance of long-term operations, as a competitor’s contract bid that is inconsequentially lower will displace a long-established operator without compensation or other mitigation for any service investments made by the operator.
4. New equipment purchases raise the prospect that the industry can bolster its image at a time when customer expectations about travel experiences are growing.
5. The share of bus trips comprised of journeys under 300 miles will grow due to intense competition from private vehicles, air travel, car rentals, and concerns about the unpredictability of longer bus trips.
6. The prospect of reduced privately-provided bus service outside of major corridors, when concern about inequities in transportation access is growing, will push policymakers to be more responsive to the national bus network’s needs. Arrangements allowing bus lines to use local transit centers are proving favorable, and state government familiarity with the industry’s needs is growing.

Limousine Companies are Already on Board

With the dramatic reduction of stretch limousines being considered the top choice for corporate and special events, limousine companies have been utilizing mini-buses and motorcoaches for clients booking travel for groups for many years now. In times of increased economic challenges in the post-pandemic era, limousine companies are making reasonable business decisions to remain competitive. However, these companies should be ready for any additional regulatory and legal requirements that are created when these larger vehicles are added to their fleets, are used to transport passengers to new service areas, or when regular route service is initiated.

It is not so much that limo companies are de facto bus operators with charter-type services, but rather limo companies are de jure bus operators with actual charter operations. They are bus companies and are held to the same regulatory standards as legacy bus companies. At the same time, many legacy bus operators also operate the smaller vehicles that limo companies have traditionally operated. However, the bus industry has not encroached on limo services by expanding in their direction at this point in time.

Depending on the capacity and use of a bus, limousine companies may trigger state and federal oversight that is not part of the “traditional” sedan and limousine operations, which includes the Federal Motor Carrier Safety Administration, the Federal Transit Administration, the Surface Transportation Board, state departments of transportation, and public transportation authorities, and might involve participation in the New Entrant Safety Assurance Program among other mandatory programs. Along these lines, we recommend that all companies deploying buses engage in regular regulatory and legal compliance, and even have an annual check-up by outside lawyers such as our team at Windels Marx to avoid fines, mitigate risk and also gear-up for expansion, or whatever else the future might bring – such as succession planning, mergers, and acquisitions.

Contracted Bus Operations: Opportunities for School Bus and Transit Bus Services
While many, if not most, bus companies operate service directly for their own passengers, a sizable amount of service is provided under contract to others. Frequently, government agencies will release solicitations seeking to employ privately-owned companies to operate bus service under purchase of service or other types of government contracts. These contracts can be valuable, at least in part because properly-performed contracts are typically paid regularly and timely.

Many transit agencies issue solicitations for the operation of both fixed route local transit bus service and demand-responsive paratransit service. Many times, these transit agencies provide buses and other facilities to the contracted companies so that the agencies can take advantage of federal subsidies for their purchase. Such services are almost always subject to the regulations of the Federal Transit Administration. To be awarded a contract a company is typically required to draft a proposal in response to a Request for Proposal (RFP), to be selected on a combined basis of price and service quality.

Additionally, many school districts issue solicitations for the operation of school bus service. Usually, these solicitations require contracted companies to supply their own buses. There are also many distinct regulations that apply to school bus operations because of the public need to provide safe and secure transportation to students. To be awarded a contract, a company is typically required to submit a bid, and are selected by being both qualified and the low bidder.

Contract opportunities abound outside government as well. Traditionally, regular route bus operators get overwhelmed at Thanksgiving and other peak periods and desire a cadre of companies who can be called upon to provide extra services at these times. Similarly, Amtrak and other passenger railroads seek out contractors to provide connecting and emergency bus service. Tour operators and convention organizers look to contract with bus operators to regularly transport their groups. There is no consistent manner through which these types of private contracts are awarded, but all can lead to regular work.

Our team at Windels Marx has extensive experience in pupil transportation, and assisted bus companies in securing and managing all of these types of contracts over the years. We are also able to assist in procurement activities, including the drafting of proposals (or even solicitation documents themselves), negotiating contract terms, and handling award protests. We are also able to address compliance matters, including operating authorities, permits, driver licensing, drug and alcohol testing, accessibility requirements, and other similar matters.

During the depths of the early days of the pandemic, school districts shut down in-person instruction. Even so, some school bus operators had contracts that would pay if the school bus operators were “ready” to perform. However, many operators had no such contractual assurances. We were able to renegotiate contracts to provide operators with, at a minimum, reimbursement for the costs of being “ready” to re-open. We also successfully negotiated contract extensions to provide operators with the reimbursement of costs such as insurance, bus maintenance, labor costs, parking lot fees, etc.

The American Bus Association Marketplace in Philadelphia 2025

At this year’s American Bus Association (ABA) Marketplace at the Pennsylvania Convention Center in Philadelphia, Windels Marx and my Transportation Practice Group team sponsored a booth in support of the ABA and attended the conference, fielding questions from the attendees about everything bus and transportation related. Marketplace is the iconic show to expand your motorcoach and group travel/tour business in North America. They use proven events and innovative technologies for an individualistic experience and the greatest return on investment for your company.

From Left: Lawrence Hughes, Special Counsel at Windels Marx; Patrick Condren, Vice President of Bus4NYC; Scott Michael, President and CEO of the United Motorcoach Association; Glenn Every, President of the Bus Association of New York; Brian Antolin, Co-founder of Metrolane; Brandon Buchanan, Director of Regulatory Affairs at the American Bus Association

At the Marketplace, Matt Daus, Patrick Condren, Vice President of Bus4NYC, Glenn Every, President of the Bus Association of New York, led Session 3011: “Understanding Important New York Regulations, Learn More About New York’s Congestion Pricing & Upcoming Seatbelt Regulations.” The panel did a “deep dive” on an “everything New York” update, which highlighted congestion pricing’s impact on the bus industry to new state laws impacting operators.

The session began by looking at early data on congestion pricing, which went into effect on January 5, 2025. Data shows an approximately 8% decrease in vehicles entering the Central Business District (CBD), leading to significantly shorter travel times – 30-40% faster on inbound river crossings and 20-30% better during PM hours on most crosstown streets. Results on north/south avenues have been more mixed. MTA bus speeds have improved 5-28%, and transit ridership has grown above average on some express bus routes. Outside the CBD, NJ Transit has reported more crowded trains and buses, as well.

One of the most pressing concerns discussed was the tolling policy for buses under congestion pricing. Currently, only commuter, transit, and intercity buses with fixed routes and public schedules are exempt from the toll, while sightseeing and charter buses remain subject to charges. Many argue that all buses, regardless of service type, contribute to reducing congestion and should be fully exempt.

Litigation from New Jersey officials challenges the financial burden placed on NJ commuters, and the judge overseeing the case, Judge Leo M. Gordon, has consistently rejected calls for an injunction. With President Trump back in office and his public opposition to the program – as well as the opposition voiced by U.S Department of Transportation Secretary, Sean Duffy – the future of congestion pricing remains uncertain. Secretary Duffy has determined that the congestion pricing program authorization should be rescinded, which resulted in the Metropolitan Transportation Authority filing a federal suit to prohibit the federal government from stopping the congestion pricing tolling program. Even with the lawsuit pending in the Southern District of New York, there are discussions between President Trump and Governor Kathy Hochul, which could lead to a resolution of the dispute. If not, Congress will likely step-in to pass a law to stop congestion pricing in NYC and to prevent it from happening nationally.

Additionally, we discussed New York’s new seat belt law for charter buses, which took effect on April 21, 2025, and requires passengers on charter buses manufactured after 2016 to wear seat belts. Glenn Every delivered this presentation and we advised bus operators to prepare by notifying passengers about the law, and alerting out-of-state charter services to ensure compliance when entering New York.

The session also covered another major concern for the bus industry: enforcement of NYC’s anti-idling laws. The Citizen Complaint Anti-Idling Law remains a significant challenge, with penalties starting at $1,000 per violation. Pending NYC legislation, such as Intro 291 and 941, could further increase fines and make enforcement even stricter. Bus companies and industry advocates must continue pushing for relief and exemptions from these penalties.

Moving forward, the bus industry must stay engaged in policy discussions to advocate for fair treatment. Priorities include securing full bus exemptions from congestion tolls, pushing for more dedicated bus lanes and layover areas, and working to modify anti-idling laws. Continued collaboration with policymakers and transportation researchers will be essential in shaping the future of congestion pricing and ensuring sustainable, equitable transit solutions.

From Left: Jeffrey Shanker, Chair of the Bus Industry Safety Council; Patrick Condren, Vice President of Bus4NYC; Matt Daus; and Glenn Every, President of the Bus Association of New York

In addition to informing the attendees of the numerous issues, including regulatory and legislative updates and challenges, the attendees had a chance to network and enjoy the great music of the ABA Jam Band at the after-party on the last night of the conference. At the request of my friend, Peter Pantuso, Principal at Pantuso Advisors LLC, and former President of the ABA, I was honored to join the ABA Jam Band on lead guitar. I was privileged to join so many talented musicians – who were clients/bus operators and bus vendors alike, playing before over a thousand people in the Philadelphia convention center. If you would like to watch the footage of some of the music and some shredding, check out this video here: https://bit.ly/4mwgA9m.

The ABA Jam Band was rocking the Convention Center Ballroom to end the successful ABA Marketplace Conference. Matt “The Mattch” Daus, rocking bus lawyer (fifth from left, first row) was honored to play lead guitar on almost every song.

Pictured from Left are the other Jam Band performers: Laura Cosgrove; Pete Smith, Smoky Mountain Resorts; Tom JeBran, Trans-Bridge Lines Inc.; Peter Pantuso, Pantuso Advisors LLC and former ABA President; Keely Law, Renaissance Shoals Resort and Spa; Johnny Baker, Ole Smoky Moonshine Distillery; Ariel Taschereau, The Nonantum Resort; Steve Vance, Grand Adirondack Hotel; Bryan Cole, Super Holiday Tours; Chris Belanger, Stoweflake Mountain Resort; John Kiely, Academy Bus; Dana Romanello, the Country Music Hall of Fame; Shannon Rinker, Visit Bucks County; Sal Caccavale, IHN EHS Services for the National Safety Council; Matt Hotchkiss, Wells Fargo Commercial Vehicle Group; Nicco Piageesi, Comcast; Nicole Boyer, Mount Hope Estate & Winery; and John Doerfler, Island Hospitality Management.

Bus Industry Legal and Consulting Representation

Windels Marx has a long history of representing the bus industry on a wide variety of matters that includes regulatory matters at all levels of government throughout the United States. This includes regulatory compliance with, and representation before, the Federal Motor Carrier Safety Administration, the Federal Transit Administration, and the U.S. Surface Transportation Board, along with state and city departments of transportation, public utility commissions, and related regulators. We can assist with all types of regulatory applications, including those for operating authority and bus stop use. Civil rights compliance, including Title VI, ADA, first and fourth amendments, and DBE and M/WBE programs. Fare policy and tariff implementation. Driver compliance, such as drug and alcohol testing, hours of service, and FMCSRs. All matters of labor relations and section 13(c) agreements. Complaints of encroachment by FTA grantees into school bus and charter bus services. All of the regulatory strings that attach when operating federally-funded transit service.

In short, we are able to assist with virtually any type of legal issue relating to ground passenger transportation, whether private sector or government sector, whether involving motorcoaches, transit buses, school buses, paratransit vehicles, limousines, or any other type of motor vehicle. We are also able to assist with non-motor vehicles, such as bicycles. We know transportation law – how it affects the business of providing transportation. Additionally, Windels Marx is a full-service law firm. When non-transportation issues affect a transportation provider, we can address those matters as well.

Regulatory compliance and corporate succession planning are important for bus operators of all sizes. From our experience, we have seen how federal and state agencies with oversight may review your operations for a variety of issues, including licensing, labor matters, ADA compliance, services polices and standards, hours of service compliance, and compliance with fleet operation requirements. It is very important to consult with your accountants, lawyers, financial advisors, and your family and executive team to plan well ahead for these audits/reviews, and to also implement steps for business operations and a succession plan.

Start with gathering the key documents for operations, licensing, and insurance. Then, you can seek out the professional assistance to reduce risks and take steps to ensure compliance and even reduce expenses like insurance. For example, deploying an in-vehicle camera system with telematics with real-time reporting can address safety concerns, lower costs, and provide key evidence to refute litigation claims against the company or its employees. It is worth the investment to take these steps to review your records and update them accordingly, especially since your company represents your life’s work as well.

It is important to have not only an experienced full-service law firm that has tax lawyers, corporate lawyers and estate lawyers, but includes those “bus lawyers,” who understand how your company and the industry works, are able to understand your particular operations, practice, and parlance, and who knows how to navigate the regulators and government agencies involved with your buses. If you would like to learn more and explore your options, contact me and my extended team at 212-237-1106, or mdaus@windelsmarx.com.

As part of our expansion at the firm, we recently hired Lawrence Hughes, as Special Counsel. Larry is a recognized expert in passenger transportation law, policy, planning and scheduling, having authored and edited transportation articles, a law school casebook, a statutory and regulatory handbook, and a bimonthly intercity transportation schedule publication. He previously worked with several large operators and has decades of experience representing bus companies. As a former public servant, he also worked at the NYC Department of Transportation and at the Metropolitan Transportation Authority (MTA).

Charting a Course for the Future Success of the Bus Industry

As we move through 2025 and into 2026, one of the trends for which to keep an eye out is that of the federal government continuing its effort to reduce regulatory barriers, as it had started doing over 40 years ago with the enactment of the Bus Regulatory Reform Act of 1982, and more importantly efforts by state and local governments to fill the vacuum with their own regulations. We have seen this trend of state and local governments trying to un-do bus deregulation over the past several years with the enactment of onerous bus stop permit regulations. One of the reasons for bus deregulation was to allow bus companies to respond to changing travel demands by permitting those companies to respond quickly with route and schedule changes, and without having to wait excessively for state or local government approval.

With deregulation, the federal government does not limit the geographic scope of registered bus companies, and thus they can begin new routes that transport passengers virtually anywhere without any regulatory delay. But increasingly, state and local governments have been imposing requirements that bus companies comply with regulations that limit the places where bus companies can stop to board and discharge passengers, require permitting processes that can take many months to complete, impose high fees, and putatively prohibit their operations until in compliance with those regulations. At common law, bus companies have had the right to stop to let-off and board passengers as incidental to their right to travel on highways, and cities have had the power to impose reasonable and uniform regulations for managing traffic, but these new state and local regulations appear to go beyond the traditional regulatory limitations. In doing so, these states and local governments may be trying to un-do federal bus deregulation, notwithstanding that part of the statutory federal transportation policy of the United States is for it to oversee bus transportation and “ensure that Federal reform initiatives enacted by… the Bus Regulatory Reform Act of 1982 are not nullified by State regulatory actions.”

States and local governments may continue their attempts to un-do federal deregulation, and, if so, there could end up being litigation. If your company is affected by these types of state and local regulations to bus stops, or any other type of regulation, we can assist with permit applications, other compliance measures, or challenges to such regulations.

Another trend to observe is that of regular route bus service migrating from a single carrier service to a brokerage model. Traditionally, each individual bus company would operate a route entirely on its own (or through a subcontract), unless it received permission from the U.S. Surface Transportation Board (STB) to pool its operations with one or more other carriers. Increasingly, however, brokers are analyzing bus markets and arranging for passenger transportation on many distinct routes with a variety of carriers. Because carriers are not themselves pooling with others, but rather non-carrier brokers are making the arrangements, the STB requirement is not triggered.

From the perspective of the bus companies, they do not need to commit to a bus route entirely, but may take those portions of the bus route they can handle themselves. In addition, the bus companies are relieved of much of the route marketing and research. The largest such broker today is FlixBus – which also owns Greyhound Lines – while another important regional broker today is OurBus. We see the emergence of additional brokers for regular route service in the future. If your company is seeking to become a broker, if you are seeking advice on entering into a broker carrier agreement or establishing a contract of carriage for brokered service, we can assist. Contact us at your earliest convenience.

Today, the bus industry is at an inflection point, due in large part to the effects of the pandemic and these regulatory challenges. As was noted at the ABA Marketplace, the number of traditional bus and motorcoach operators has decreased significantly in the past five years. In that same period, limousine company operators are being responsive to the needs of their corporate customers and individuals seeking mini-buses and coaches to meet business travel, event planning, and custom charter service for larger groups. While these traditional and “new” bus operators all try to meet growing customer demands, the regulatory requirements that were relaxed during the pandemic are back in force at the federal, state and local level. These companies are certainly eager to welcome back business and tell these passengers to “climb aboard.”However, from what we have seen, bus operators would be wise to review their regulatory compliance and “watch your step!”