Charter Bus Service

For more than a decade, public and private bus companies have debated their roles in meeting the demand for local charter service in the United States. Public transit operators view their services as essential to local community groups who cannot obtain services from private operators; private operators counter that charter service should fall primarily in their domain. Congress has prohibited public transit operators from engaging in charter bus operations except as permitted by the Department of Transportation. This report assesses (1) the extent to which the federal charter service regulation allows communities to cost-effectively and efficiently meet the transportation needs of government, civic, and charitable groups; (2) the extent to which public transit operators and private charter operators have entered into charter service agreements; and (3) the extent to which contracts enable private operators to profit from the provision of charter service by public operators using federally subsidized vehicles.

GAO found that: (1) local conditions and demographics determine the extent that the federal charter regulation meets local charter transportation needs; (2) although some public operators are satisfied with charter regulation exceptions that allow them to provide charter bus service through private contracts, most public charter operators believe that the exceptions are too strict, difficult to obtain, and not widely used; (3) private operators believe that the current exceptions allow bus operators to adequately meet community needs; (4) there is a lack of data showing that charter service regulations cannot meet community needs; (5) dissatisfied charter bus customers believe that private charter rates are too high, charter vehicles are not accessible to the elderly and disabled, and charter services do not accommodate local conventions and economic development activities; (6) increased Federal Transit Administration (FTA) subsidies and greater cooperation between public and private operators could increase charter bus services; and (7) private operators do not extensively profit from public-private charter service contracts and often charge surcharges to cover administrative and licensing expenses.

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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