Surface Transportation

Except for regional companies, Greyhound remains the sole nationwide provider of regular bus service between cities, and it filed for bankruptcy protection in June 1990. The decline of the U.S. bus industry continued despite regulatory relief granted by Congress in the early 1980s. The Bus Regulatory Reform Act of 1982 did not, however, address the underlying causes for the industry's collapse: shrinking rural populations, intense competition from air and rail transportation, and growing car ownership. As a result, the industry continued to contract, serving fewer than 6,000 locations by 1991--nearly a 50-percent drop over nine years. The riders who have been losing service seem to be those least able to afford and least likely to have access to alternative modes of transportation. GAO found that 20 states have attempted to sustain regular intercity bus service, mainly by giving bus firms operating support for routes that might otherwise be abandoned and subsidies for new vehicles. By requiring states to use some federal funding for intercity bus transportation, the Intermodal Surface Transportation Efficiency Act of 1991 may make more money available for existing state programs. It may also spur other states to start programs to strengthen intercity bus service. Some states, however, could face problems in spending the funds because the Department of Transportation has not decided what activities will be eligible to receive funding and because of federal labor protection requirements.

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

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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