(The following document is the second part of the final rule on Transportation for Individuals with Disabilities
dealing with Over-the-Road buses. It is being provided in three sections to make downloading easier.
Links to the previous and next section are provided at the end of each section.)

Fleet Accessibility Deadlines

The NPRM proposed to require fixed-route operators to ensure that their fleets were 50 percent accessible 6 years into implementation of the final rule and 100 percent accessible 12 years into implementation. Small operators would be excused from these deadlines if they had not obtained enough new buses in those time periods to meet the required fleet accessibility percentages. These deadlines were intended to provide a time certain when passengers could count on regular, scheduled accessible service on all runs as well as to create a disincentive for companies to delay bus replacements to postpone accessibility. The 12-year target for 100 percent accessibility was based on information concerning the normal bus replacement cycle of large carriers. In addition, demand-responsive providers were to achieve 10 percent fleet accessibility within two years, again with a provision excepting small carriers who did not obtain enough new buses in that period to meet the deadline.

Disability community commenters generally supported the concept of fleet accessibility deadlines for fixed-route operators. Commenters believed that fleet accessibility schedules were important, among other reasons because, in their view, the bus industry was so opposed to accessibility that it could not be trusted to proceed toward accessibility in a measured way. It was necessary to hold the industry’s feet to the fire, in this view. However, most of these commenters thought that the proposed deadlines were too far into the future. They would allow 20 years between the passage of the ADA and full accessibility, some pointed out. The bus industry should not be rewarded for its opposition to accessibility and the statutory and DOT-created delays in promulgating rules, others said. Suggestions for fleet accessibility timetables included 4 and 8 years, 4 and 10 years, 2 and 5 years, 3 and 6 years, etc. for 50 and 100 percent fixed-route fleet accessibility.

Even aside from its opposition to a requirement to obtain new accessible buses, the bus industry strongly opposed the proposal for fleet accessibility deadlines. Part of this opposition appears to be based on a concern about their effect on small fixed-route operators. Industry comments expressed concern that the deadlines would force small companies to accelerate the purchase of vehicles, purchase new instead of used vehicles, or take other uneconomic actions that would impose unreasonable costs and lead them to abandon fixed-route service. Commenters also expressed concern about the potential effect of the deadlines on the resale value of inaccessible buses.

Moreover, commenters said, the proposed deadlines were based on the replacement cycles typical of large carriers, which do not necessarily apply to smaller carriers. Even large carriers may not always be able to maintain a 12-year replacement cycle, commenters said, because of changes in economic conditions. The requirement placed them in an economic straitjacket that hampered their ability to respond flexibly to market conditions, they said. It was unfair to impose on bus operators a timing requirement that other modes did not face under the ADA, they added.

With respect to charter/tour service, disability community commenters generally favored the 10 percent requirement, though some thought it was too low, believing that 20 or 25 percent would be a better figure to ensure the availability of accessible buses in the charter/tour segment of the industry. Bus industry commenters decried what some called a "quota" approach, saying that this imposed unnecessary costs and that it made more sense to eliminate a number-based requirement altogether and simply require that operators meet identified needs on a 48-hour advance notice basis, with an accountability mechanism.

DOT Response. It appears that some of the bus industry’s concerns about the effect of the proposed deadlines on small operators were based on a misunderstanding of the NPRM. Used buses would not be required to be accessible. Retrofit would not be required. Under the NPRM, if a small fixed-route operator did not obtain enough new buses within the stated time frames to replace 50 or 100 percent of its buses (e.g., it kept its old buses a long time, or it purchased only used buses), it would not violate the proposed rule. Substantively, the NPRM formulation for small fixed-route operators -- the fleet accessibility requirement plus the exception -- is not very different from a requirement to obtain accessible new buses without any fleet accessibility requirement being stated.

In either case, all new fixed-route buses have to be accessible. In either case, the total fixed-route fleet becomes accessible only if and when all inaccessible buses are replaced with new buses. This being the case, we have decided it is simpler and more understandable to eliminate the fleet accessibility requirement for small fixed-route operators. There will be no retrofit or accessible used bus acquisition requirement. Small operators’ fleets will become accessible when, and to the extent, that they replace existing inaccessible buses with new accessible buses. Operators must continue to provide interim service until and unless their fleets are 100 percent accessible, which, for some operators (e.g., operators who purchase primarily inaccessible used buses), could be indefinitely.

Large fixed-route operators provide the backbone of intercity bus service. For fully accessible, nondiscriminatory, everyday service to be a reality, those carriers must have accessible fleets within a reasonable period of time. These carriers typically purchase or lease new buses, and their comments do not deny that they do so on a 10-12 year replacement cycle. Consequently, the Department believes that it is consistent with the purpose and language of the ADA to require large fixed-route operators to meet a 6/12-year fleet accessibility schedule. Such a schedule is what they would meet via their normal replacement cycles, so it should not cause any economic distortions. This schedule will give assurance to consumers of the time frame in which they have a reasonable expectation of fully accessible service. Shortening these time frames, as disability community comments suggested, could force companies to disrupt bus replacement schedules or even retrofit existing buses, which we do not believe to be desirable.

The Department realizes that economic conditions can change, and companies can face unexpected problems. Bus replacements can fall behind historically typical cycles. To provide flexibility for unexpected situations, the Department has added a time extension provision for large fixed-route operators. If (1) such an operator has not obtained enough new buses in 6 or 12 years to meet the 50 and 100 percent fleet accessibility requirements; (2) it has not put itself in this position by, for example, stocking up on an unusually large number of inaccessible buses between October 1998 and October 2000; and (3) it has otherwise complied effectively with the requirements of the rule, the Secretary could grant a time extension beyond the 6 and 12-year dates. This provision avoids the potential "straitjacket" problem asserted by commenters, since it allows bus companies operating in good faith to obtain additional time to meet requirements in a way consistent with their actual bus replacement practices.

With respect to charter/tour operators, the Department has decided to eliminate the proposed 10 percent fleet accessibility requirement. Unlike the fixed-route sector, in which fleet accessibility is necessary for fully accessible, nondiscriminatory, everyday service, the charter/tour sector is better able to meet its ADA obligations through the industry’s favored "service-based" approach. This is because of the advance-reservation nature of charter/tour service. If bus industry arrangements produce reliable charter/tour accessible bus service on an advance-notice basis, as industry comments assert that it can, ensuring that a particular percentage of buses in carriers’ fleets are accessible becomes less important. The accountability mechanism described below is expected to help ensure that the promised service is provided.

Consequently, the final rule does not require charter/tour operators to acquire any particular number or percentage of accessible buses within any particular time frame. These companies will be responsible for providing 48-hour advance reservation service to passengers with disabilities in October 2001 or 2002, as applicable, rather than two years later as proposed in the NPRM. The two-year delay in the NPRM was premised on companies building up to a 10 percent accessible fleet in that period. In the absence of the 10 percent requirement, the rationale for a phase-in period of this length is considerably weakened. A shorter phase-in will be sufficient. Moreover, given the assurances of industry commenters concerning their readiness to meet advance notice requirements, and the fact that compliance is not required for two to three years from now, it is reasonable to believe it is feasible for operators to comply in October 2001-2002. In addition, retaining the two-year delay would mean that, for passengers of most of the operators who are small entities, it would be five years before they could count on receiving accessible service.

Small mixed-service operators

Bus industry commenters said that the NPRM’s division of operators into fixed-route and demand-responsive components did not capture a frequent type of operation among small operators. Small operators, they said, often provided both kinds of service. Typically, such an operator is primarily a provider of charter/tour service. The typical operator uses most of its buses in, and makes most of its money from, charter/tour operations. Its fixed-route operations make up a much smaller portion of its overall activities, which may often be economically marginal. Often, the same buses are used for both fixed-route and demand-responsive purposes (e.g., a bus might be used for fixed-route service at one time during the week and demand-responsive service at another time of the week, or a bus might be used for charter/tour service initially and then moved into fixed-route service as it ages).

Small operators in this category said that they would need few, if any, accessible buses of their own to meet the 48-hour advance notice requirements for charter/tour service. They could rely on "pooling" or other bus-sharing arrangements to produce an accessible bus when needed. If they had to buy accessible buses when they bought new OTRBs that would be used in fixed-route service, their costs would increase to the point where they would have an incentive to eliminate their fixed-route service.

Disability community comments did not discuss this category of operator, which the NPRM did not specifically mention. From disability community comments on other types of operations, however, it is fair to infer that disability community commenters would advocate that all new buses used in fixed-route service would have to be accessible.

DOT Response: In working on the regulatory assessment, the Department conducted a brief, informal survey of small bus operators. Based on this survey and other information available to the Department, the regulatory assessment estimates that for about 5/8 of the carriers offering fixed-route service, not more than 25 percent of their fleets is allocated to fixed-route service. Survey responses from operators in this category indicated that an average of 77 percent of their fleets were assigned to charter service.

The Department believes that industry commenters have a plausible argument. If a significant majority of an operator’s buses and service is devoted to charter/tour service, with a small amount of fixed-route service on the side, it is reasonable to believe that the costs of acquiring accessible new buses for (often part-time) use in fixed-route service would provide an incentive to limit or end fixed-route service. In order to avoid this effect, we are modifying the requirements for operators in this category, which the final rule defines as a small operator 25 percent or fewer of whose buses are used in fixed-route service.

The final rule gives operators in this category the option of providing all its service -- fixed-route as well as demand-responsive -- on a 48-hour advance notice basis. This approach would remove the incentive to eliminate fixed-route service discussed above. It would also permit these small operators to meet all requirements through only one set of procedures.

This approach admittedly has disadvantages from the point of view of passengers with disabilities. It encounters the discrimination and logistics issues discussed in connection with fixed-route service by large operators. As a policy matter, however, the situation of small mixed-service operators is quite different from that of large fixed-route operators. They are at the periphery, not the center, of the nationwide intercity bus system. They carry a much smaller percentage of fixed-route passengers. Treating these operators differently from large fixed-route operators, moreover, is consistent with Regulatory Flexibility Act policy. Consequently, the Department has concluded that, on balance, this approach is acceptable in this limited set of circumstances, particularly in view of the accountability mechanism discussed below.

Accountability Mechanism

A number of bus industry comments, in the course of providing assurances that 48-hour advance notice service will work, suggested the idea of an accountability mechanism for the provision of promised service. There were two principal ideas. One industry association suggested a "complaint board," an administrative body that could act in a mediation role with respect to consumer complaints and could also sanction bus companies that fail to meet their obligations. Another industry association suggested a mechanism for the immediate compensation of passengers’ failure to provide required accessible service, generally analogous to "denied boarding compensation" in the airline industry.

The Department believes that these industry suggestions have merit. The final rule includes a version of the second idea. When an operator is obligated to provide service on 48 hours’ advance notice (whether in charter/tour, interim fixed-route service, or elsewhere) or is providing equivalent service (if a small fixed-route operator elects to do so), either the required accessible vehicle is provided in a timely manner or it isn’t. Either the lift works or it doesn’t. It is not necessary to conduct an administrative proceeding to determine these simple factual matters. It is not necessary to refer the question to a board sitting in Washington, D.C.

Instead, when there is a failure to provide required service, the operator would pay a predetermined amount of compensation to the passenger. This is not a fine or a civil penalty that is paid to the Department. It is paid to the passenger whose travel is prevented or disrupted by the operator’s inability to provide accessible service. The amount of compensation is set by an increasing, graduated scale. The first time a given operator fails to provide required service, it pays the passenger $300. By the fifth such occurrence for any company, the amount becomes $700. Assuming that operators’ comments that they can readily meet the 48-hour requirement are soundly based in reality, occasions for paying this compensation should be infrequent. Lest paying compensation to the occasional passenger simply be regarded as a cost of doing business, the rule states that paying compensation is not a defense in litigation brought to enforce compliance with the rule (e.g., a "pattern or practice" lawsuit filed by the Department of Justice under Title III of the ADA).

Stimulated Demand

There was considerable debate in the comments about the extent to which accessible OTRB service will increase passenger demand. This issue is important primarily for its effect on the projected net cost of compliance with the Department’s rule. The greater the stimulated demand – new revenue trips generated by passengers with disabilities and persons accompanying them – the lower the net compliance cost of the rule.

Bus industry commenters asserted that the estimates of stimulated demand in the regulatory assessment accompanying the NPRM were greatly overstated. Many small bus companies related their own experience: in many years of providing service, they said, they had received few if any requests for service from passengers with disabilities. Even some companies that had purchased accessible buses and, in a few cases, promoted their use had received a miniscule number of requests for accessible service.

More generally, industry comments cited the so-called "Nathan Study," a report prepared by a consultant for a large carrier for purposes of this rulemaking, for the proposition that, based on experience in a few situations in which limited fixed-route OTRB service had been provided, stimulated demand could be expected to be quite low (e.g., 13,600 trips annually for the largest intercity carrier). This experience, commenters said, was more likely to be representative of demand than transit or commuter bus experience, which, because it involved shorter, less discretionary, trips, was likely to produce higher ridership by passengers with disabilities.

Disability community comments said that there was a large untapped market among people with disabilities for service. This market should only grow larger with the aging of the "baby boom" generation, they said. Transportation is a matter of great concern to the elderly and disabled, and they will travel if they are assured that the entire chain of a trip is accessible. Demand to date has been suppressed by the unavailability of accessible service. It is no wonder that many bus companies have few requests for service from disabled passengers: the passengers know that service isn’t accessible, and they don’t bother to seek service they know they can’t readily use. Commenters also referred to the substantially higher ridership estimates of the OTA study. As has been the case in other modes, commenters said, demand will grow as service improves and becomes accecssible. This is likely to be true of the intercity bus industry because it offers a unique service, which is the only available mode of intercity service for many disabled passengers.

DOT Response:

Experience has shown that once passengers with disabilities are assured that accessibility is widespread they will begin to take advantage of these services. Beyond this general point, however, there remains wide divergence in estimates of potential new ridership. The "Nathan Study" asserts that it anticipates 13,600 wheelchair passenger trips per year on accessible Greyhound service, based on the mid-point of the trip results of on-going operations using accessible OTRBs in Massachusetts and Colorado, and service demonstration projects in Canada. This report does indicate, however, that if made solely on the basis of the Denver Regional Transportation District (RTD) experience, an estimate of demand might be as high as 35,000 trips per year by wheelchair users.

At the other end of the spectrum is the OTA report, which essentially assumes that persons with disabilities would travel and generate trips at the same rate as all of the citizens in the population once OTRB fleets are fully accessible. The assumption would result in 180,000 trips being made annually by persons using wheelchairs over the whole intercity fixed-route service system. The report goes on to note (pg. 95) that estimating travel demand is notoriously difficult for services that have not been introduced. Further, the Massachusetts and Canadian programs were not representative of full-scale future accessible service because of limited connectivity to the broader national system and the continued existence of certain barriers to persons with disabilities. Further, one can only conjecture how many of the trips estimated by OTA for the cited populations are already being taken.

In preparing the Regulatory Assessment for the final rule, the Department relied on estimates from a variety of sources, which varied in their projections of stimulated traffic by a factor of seven. Given the uncertainties involved in estimating demand generated by a system that is not yet in existence, we have expressed our projections in terms of a range with a high and low estimates.

For the high-end estimate presented in the assessment, it is assumed that demand by wheelchair passengers and other mobility-impaired passengers will grow substantially once there is full access to a nationwide accessible OTRB system. The urban transit systems that will provide connectivity in the form of entrance and egress for many intercity OTRB trips will also be becoming more accessible as the ADA continues to take effect. Many barriers will remain, however, and for the future period with which this Regulatory Assessment is concerned it is not expected even for purposes of the high-end estimate that there will be achieved the universal accessibility assumed in the estimates by OTA.

When persons with disabilities can travel, they will often take along family members or personal assistants. Consistent with the data in the American Travel Survey, the high-end estimate assumes that approximately 17 percent of new patrons with disabilities will be accompanied by family members. On the other hand, transit data suggests little additional use of lift service by cane and crutch users, so this portion of the estimate was reduced, compared to the NPRM.

The high estimate implies that new patronage by wheelchair users of scheduled intercity OTRB service will be approximately 52,000 per year once the fleets of Class I and other intercity regular-route operators are fully equipped with lifts (i.e., 12 years into implementation of the rule). It assumes that total stimulated traffic will grow to a volume of trips of 182,000 annual trips, equivalent to 0.456 percent of total current passenger traffic of about 40 million trips per year. This percentage is made up of 0.15 persons in wheelchairs, 0.24 percent persons with other mobility impairments, and 0.066 percent family members or other persons accompanying these passengers.

The Regulatory Assessment’s low estimate of stimulated traffic differs from the high estimate in that the percentage of current traffic assumed to be accounted for by new patrons in wheelchairs is 0.10 percent rather than 0.15 percent, with patronage by other mobility-impaired persons and accompanying family members adjusted proportionately to 0.16 percent and 0.043 percent, respectively, or 0.303 percent altogether. It would result in a projection of approximately 121,000 total annual new trips when Class I fixed-route fleets are fully accessible. It is expected that wheelchair passengers and other mobility-impaired passengers and their families will ultimately take advantage of between 171 and 262 thousand additional trips per year on fixed-route services and between 397 and 595 thousand trips on charter/tour services. It should be pointed out that one of the sources of difference between the industry’s figures and the Department’s is that the former concerns demand at the beginning of a process leading to a fully accessible system, while the latter projects demand once a fully accessible system is in place, some years later.

While the high estimate of new patronage by wheelchair users reflects available experience with accessible OTRB commuter services offered by one transit operator, Denver RTD, this low estimate relies more on experience with longer-distance intercity service that would not have had any significant commuter-type patronage (in particular the programs by Canada Coach Lines) and the transit experience of Golden Gate Transit and the New York City Transit. Both estimates involve a modest reduction in projected demand, compared to the regulatory assessment prepared in connection with the NPRM.

Financial burdens/Loss of Marginal Routes

A basic argument the bus industry made against the NPRM’s approach was that it was too costly and imposed undue financial burdens on the industry, with negative effects not only on the companies themselves but on passengers who travel on marginal, especially rural, routes. Commenters emphasized the financial fragility of the industry generally and individual companies, noted that many companies typically have low profit margins and expressed the concern that the costs of accessibility proposed in the NPRM would drive some companies out of business. They mentioned the historical trend toward shrinking passenger volume and points served by intercity buses. They said that, in a number of respects, the NPRM’s regulatory assessment understated the actual costs imposed on carriers. In this context, commenters argued that the actual costs imposed on carriers constituted an undue financial burden, because they would hamper the rebuilding of the capital investment of bus companies, endangering their attempts to revitalize the passenger bus business.

Bus industry commenters also provided lists of points that they thought could well lose service if they were required to obtain accessible buses. The reasoning of the operators is that, in order to cover compliance costs, they would have to eliminate economically marginal routes, since they could not afford to raise fares across the board and remain competitive. Greyhoud listed 144 points it said would face the loss of intercity service. Combining this projection with information from other carriers, an industry association projected that 278 points would lose all service, and another 378 would lose frequency of service or connections. The commenter projected that the loss of service to these points could result in an annual loss of 208,000 passenger trips, a considerably larger number of trips than the stimulated demand that the regulation would create. This commenter believed that the service would not disappear overnight, but rather incrementally as old equipment needed to be replaced by more expensive, accessible new equipment that companies would choose not to acquire.

Disability community commenters pointed to the TEA-21 subsidy as mitigating financial impacts on carriers. They also suggested that industry comments seriously underestimated the operating costs of an on-call system, which were continuing, in contrast to the discrete capital costs of accessible buses. They also criticized the objectivity and data in industry cost projections. Every business in America has to comply with ADA accessibility mandates, they said, generally without subsidy, and bus companies could do so as well.

DOT Response:

a. Financial situation of fixed-route carriers. Throughout the early 1990s, most intercity carriers experienced financial difficulties, to a great extent as a result of Greyhound's 1990 drivers’ strike and bankruptcy, plus two different Greyhound plans to restructure service. Many other OTRB carriers' earnings are very dependent on the state of Greyhound's service, over 30 percent of which involves interlining with other carriers. In 1996 and 1997, all but a few Class I intercity carriers began to creep into the black, or break even.

There is naturally some variation in the financial strength of different carriers. For example, the Class I financial reports (for the year 1997) filed with DOT’s Bureau of Transportation Statistics show privately held Peter Pan Lines (Massachusetts), much smaller than Greyhound but the next-largest carrier in terms of regular-route intercity revenues and its effective competitor in certain heavy-density Northeastern markets, generating operating expenses (before interest and taxes) at a rate of 86 percent of revenues as contrasted with 97 percent for Greyhound Lines itself.

However, when viewed as a whole, the industry's financial position continues to center on Greyhound, the extensive debt financing of which generates an annual interest expense that is still substantial compared to operating earnings. Greyhound and its consolidated subsidiaries have incurred net losses in all but one year since the driver's strike, ranging from a high of $77.4 million (1994) down to $6.6 million (1996). Their loss for 1997 was $16.9 million although they would have reported $8.4 million in positive net income had it not been for an extraordinary expense charge taken that year in connection with a re-financing transaction that spread their required debt repayments further out into the future.

According to Greyhound, in 1995, 1996 and 1997, it posted revenue and ridership increases (the first since 1991) and has realized a dramatic turnaround by streamlining operations, lowering fares, hiring more drivers, and adding long-haul services. It is beginning to restore infrastructure, and reduce fleet failure rates and high maintenance costs, by replacing an aging fleet of 15- 20-year-old buses. It has also increased its package-express business, in part because of the UPS strike in August 1997. In July, 1997 Greyhound bought Carolina Trailways for $25.3 million cash, debt assumption and stock, of which $20.4 million was cash, and in August of that year purchased Valley Transit for $19 million in cash. During 1996-97, Greyhound leased 384 new buses (without lifts) financed by seven institutions. It has also committed to acquire 80 new lift-equipped buses through 1999, of which 20 have already been ordered. Greyhound raised fares by four percent last year on selected routes (while increasing their overall revenues, according to filings the company made with the Securities and Exchange Commission), and also made selected fare reductions on other route segments.

Thus, Greyhound appears to be headed for recovery along with most of the other Class I intercity/regional carriers. Some small carriers continue to face financial hardships and cannot afford to replace aging fleets. The requirements of the final rule for small operators, however, should significantly mitigate regulatory impacts on them.

b. Reductions of Passenger Traffic and Points Served. Commercial intercity carriers are also concerned about their limited ability to "pass on" to current passengers the costs of accessibility improvements. This can be expressed in economic analysis terms as the elasticity of overall demand for their service with respect to average price charged. The Department is not assuming that fares could be raised by an amount sufficient to completely cover the costs of compliance with the final rule by current OTRB operations in all U.S. markets without any effect at all on existing patronage. By definition, this would demonstrate perfect inelasticity of demand over that range of price change, which industry representatives suggest is not the case.

The economic model used in the regulatory assessment focuses on an elasticity of demand of –1.0. If this theoretical assumption is correct, and Greyhound needed to add about 2.1 percent to its ticket prices to wholly recover compliance costs of the rule, it could lose 2.1 percent of its revenues, which could be approximated as 2.1 percent of passenger trips being lost. Subject to appropriations, the TEA-21 subsidy would cut these figures by about a third. For Greyhound, this (i.e., the subsidized price increase level of 1.33%) would amount to a potential loss of 233,000 passenger trips out of 17.5 million. Extrapolating to the 40 million carried by large intercity carriers in 1997, this would amount to a 532,000 passenger trip decline. The offsets for stimulated traffic would range from about 53,000 to 80,000 passenger trips for Greyhound, and 85,000 – 127,000 passenger trips for the fixed-route system as a whole.

To the best of the Department’s knowledge, there are no stated preference or revealed preference studies of the actual impacts of price rises in intercity bus travel that would empirically confirm or disconfirm the hypothesis derived from this model that a 1.3 percent price increase would have these effects. There is some room for question given the low absolute price increases involved. For example,

taking into account the TEA-21 subsidy, the compliance cost of the rule would add 46 cents to the cost of Greyhound’s $34.00 average fixed-route ticket. In the real world, would a transit-dependent consumer of an average intercity bus trip decline to take the trip because the ticket cost $34.46 instead of $34.00? (We note that Greyhound recently raised fares by about four percent on selected routes.) There is a considerable uncertainty surrounding this model which makes it difficult to say with confidence what the actual magnitude of the effects of a price increase would be, and a certain degree of caution in using these estimates is in order.

With respect to cutting marginal routes, Greyhound cites a list of 19 marginal routes which could lose service. The Greyhound System Timetable for June 24, 1998, shows that the 144 points on these 19 routes represent 6 percent of the system’s 2400 total points and 1.5 percent (on the basis of July operations) of their 1997 bus-miles. However, 45 of the 144 points were not listed in the timetable as having any agency service at all. Two routes, encompassing 27 points, are currently subsidized by the state of Pennsylvania.

An industry association comment enlarged the list of single-service points that might be abandoned to 287, but we have reason to question some them. Most of the routes cited by this comment are served by small carriers, which have the option of buying used buses instead of abandoning the routes. The ABA projection appears not to take this possibility into account. In addition, the small operator provisions of the final rule are likely to lower significantly the number of potential number of routes cut by small operators.

Moreover, as industry comments themselves pointed out, there has been marked shrinkage of the number of passengers and number of points served by the intercity bus industry in recent decades. This appears to have been caused by changes in the economy, passengers’ travel preferences, and, to an extent, by management decisions of bus industry members. Certainly accessibility requirements had nothing to do with it. It is likely, in the future as in the past, that broader economic circumstances will have much more to do with the financial health and route structure of bus companies than any specific requirement of this or any other regulation.

c. Overall costs. The Department’s estimates of overall compliance costs of the rule are set forth in the tables below. They are summarized from material in the Department’s regulatory assessment. Net costs are calculated by subtracting the projected revenues from stimulated demand generated by service complying with the rule from the overall, or gross, costs. All costs are year 2000 present value discounted costs. The following tables do not include the effect of the TEA-21 subsidy or other financial assistance available to bus companies.

Overall Gross and Net Costs (Millions of Year 2000 dollars)

Costs Expressed as Costs per Stimulated Trip (Year 2000 dollars)

d. Conclusion. The conclusion the Department draws from its review of the economic issues in the rulemaking is that, while there are identifiable economic impacts on the bus industry, these impacts are not so great as to preclude the Department reasonably from requiring the accessibility requirements of the final rule. The ADA does not immunize private parties, including bus companies, from some of the burdens of ensuring nondiscrimination for people with disabilities. The economic impacts of the rule are not sufficient to constitute an "undue burden" on bus companies. Given the generally improving financial health of the fixed-route bus industry, the relatively modest net, and even gross, costs of the rule are very unlikely to have devastating effects on the industry, of a magnitude that could be fairly regarded as unduly burdensome. They are necessary, "due" burdens of achieving the objectives of the ADA by providing meaningful, nondiscriminatory service.

In the context of industry arguments about allegedly undue financial burdens and commenters’ claims that the OTRB industry is unfairly impacted by Federal requirements, compared to other modes, we believe it is useful to review the sources of direct and indirect Federal financial assistance authorized for the OTRB industry. Some of this assistance is specifically directed at making OTRBs accessible, while other funding sources represent general public subsidies to the industry. The following table summarizes the financial assistance applicable to FY 1999 through FY 2003:

* - authorized funds

The Rural Transportation Accessibility Initiative is the TEA-21 subsidy dedicated to OTRB accessibility. This program authorizes $24.3 million (including $17.5 million specifically for fixed-route operators) in guaranteed funds to subsidize up to 50 percent of capital and training costs of OTRB accessibility.

Since 1992, states have been required to make funds available for fixed- route intercity bus transportation. Each state is required to expend 15 percent

of the funds received through FTA’s Non-Urbanized Area Formula Program for this purpose. FTA guidance specifies that these funds may be used to purchase vehicles or vehicle-related equipment such as wheelchair lifts. The guaranteed TEA-21 funding available for the 15 percent set-aside will more than double between FY 1997 and FY 2003, from $17 to $36 millon per year.

The 15 percent set-aside can be waived only if a state’s governor certifies that the state’s intercity bus service needs are being adequately met. This program provides states a means to respond to concerns that costs associated with accessibility could result in the termination of rural bus routes.

As noted above, OTRBs have a significant fuel tax break. OTRBs are exempt from all but three cents of the Federal Motor Fuels Tax on diesel and other special fuels. The value of this exemption is 21.3 cents per gallon,, amounting to an annual tax saving for the industry of $33.5 million (based on 1996 Federal fuel consumption statistics).

In addition to the sources of assistance shown in the table, there are two additional sources of Federal funding for OTRB services. While these funding sources do not provide dedicated funding for OTRB services, and other projects compete for funds, state and local officials who are concerned about the continuation or expansion of OTRB services (e.g., on rural or marginal routes) can take advantage of them.

First, a new provision in TEA-21 expands the highway Surface Transportation Program (STP) eligibility to fund private intercity bus capital expenses (TEA-21 section 1108). This amendment gives states two additional ways of using STP funds: directly, relying on the new TEA-21 language adding intercity bus terminals and equipment as eligible expenditures, or indirectly, through transfers of STP funds to the FTA Non-Urbanized Area Formula Grant Program, described above. The STP program averages $5.5 billion annually during the TEA-21 authorization period. Second, the Congestion Mitigation and Air Quality (CMAQ) program’s funds are eligible for support of OTRB service. The CMAQ program averages $4.1 billion annually during the TEA-21 authorization period.

The Department emphasizes that these sources of Federal financial assistance are not essential to the Department’s ability, as a matter of law or policy, to impose the nondiscrimination and accessibility requirements of the final rule. Requiring compliance with civil rights requirements like those of the ADA is not contingent on the availability of such assistance. However, in assessing the impact of this rule, it is fair to note the fact that such assistance is available. We note also that the amount of this assistance is well in excess of the total compliance costs of the rule.

Notwithstanding the modest total costs of the rule. and the considerable Federal financial assistance available, the Department is concerned about the overall economic impact of the regulation and its impact on particular companies. The Department is acting on this concern in several ways. These include the special provision for small mixed-service operators, the time extension mechanism for fleet accessibility deadlines for large fixed-route carriers, and the absence of a fleet accessibility requirement for small fixed-route operators and demand-responsive operators, discussed above.

In addition, with respect to small fixed-route operators, the Department is adding another provision designed to reduce potential economic impacts. Rather than obtaining accessible buses, a small fixed-route operator can commit to providing equivalent service to passengers with disabilities. This service, which has to meet existing part 37 criteria for equivalent service, must also provide service to a passenger in his or her own wheelchair. The Department is not prescribing the form of this equivalent service, but it could involve an alternative vehicle (e.g., an accessible van) that the operator would provide on short notice to carry a passenger where that passenger would have gone on the operator’s bus.

The Department is also adding a regulatory review provision to the final rule. This review provision commits the Department to conduct reviews of the provisions of the rule for demand-responsive and fixed-route service, including data concerning accessible buses, advance notice service, costs and ridership in 2005-2007. This review will allow the Department to make appropriate changes in any provisions of the regulation, based on actual experience concerning costs, service and other matters. We note that comments from the bus industry supported data collection for this purpose and the idea of reviewing regulatory requirements after some time had passed (though bus industry commenters would have preferred to wait until after such a review before requiring fully accessible fixed-route service). Aside from this review provision, the Department will continue to evaluate relevant data about implementation of the rule, its costs and other effects, available funding, and the success of bus companies at providing accessible service as part of our ongoing oversight of ADA compliance.

Environmental Issues

Bus industry commenters made two related environmental arguments. The premise of both arguments is that bus companies will respond to the costs of compliance with the rule by reducing marginal, especially rural, routes. Significant numbers of points and passengers will lose intercity bus service as a result, the commenters assert.

Since intercity bus passengers are disproportionately low-income persons, including members of minority groups, the industry argued that Department should consider the "environmental justice" effects of the proposed rule under Executive Order 12898 and a DOT Order implementing it. In addition, industry comments asserted that reductions in bus routes would lead more people to drive their cars on trips, increasing air pollution. In addition, there would be increased fuel usage because of heavier equipment on buses, needing to keep buses running longer at stops to operate the lifts, etc. These factors should be the subject of an environmental impact statement, pending which the Department should withdraw the rulemaking.

DOT Response: As noted above, the premise of these arguments is that significant adverse environmental and environmental justice effects will flow from the Department’s accessibility requirements, since companies will respond to these requirements by cutting routes. This premise is flawed in two important respects. First, the economic effects of the final rule, particularly but not only with respect to small entities, are greatly mitigated by the variety of steps the Department has taken in response to comments on the NPRM and the significant financial assistance available to operators. These provisions are likely to reduce significantly the extent to which many companies would choose to respond to the requirements of the rule by reducing service. Absent the route reductions, the environmental and environmental justice impacts alleged by industry comments effectively disappear.

Second, route reductions, and any consequent environmental or environmental justice effects, are not mandated by the final rule. To the extent they occur at all, route reductions are the result of free choice by the bus companies themselves. If a bus company’s costs increase for any reason (e.g., higher capital costs, high debt service, increases in fuel prices, increases in labor costs, as well as regulatory compliance), the company must decide how to deal with the increased cost. There is wide variety of potential responses. Does the company raise fares? Does it reduce service? Does it accept a lower profit margin? Does it seek additional subsidies? When a company chooses one or a combination of responses to increased costs, its choice is likely to have consequences for its customers. These choices are the proximate causes of the consequences to customers.

One point that disability community comments made, and bus industry comments did not emphasize, is that people with disabilities are disproportionately poor. If they live in rural areas, they are likely to have even fewer transportation alternatives than other persons. This group, which has traditionally been underserved by the bus industry, would receive service they can use under this rule, often for the first time. It is appropriate, in an ADA rulemaking, to pay particular attention to the needs of people with disabilities in determining what policy to pursue.

The Department will place an environmental assessment (EA) in the docket for this rulemaking. It is our judgment that the environmental effects of the rulemaking are insufficient to call for the preparation of an environmental impact statement (EIS). The EA will address the industry’s air quality arguments in more detail. We would note a few points here, however. The primary air quality argument made by the industry is that people who lose bus availability because of industry decisions to cut service will take trips by car. This forgets that people often ride buses precisely because they are transit dependent (e.g., according to information in the docket, 44 percent of intercity bus passengers do not own a car and 60 percent do not own a car capable of making a 500-mile trip). This substantially limits the extent to which ex-bus passengers are in a position to substitute car trips. In addition, the industry arguments with respect to running buses longer to operate lifts and therefore increase emissions appear to ignore industry commenters’ assertion that, under the industry’s favored approach, there would no fewer lift boardings than under the Department’s requirements. Moreover, there would need to be some "deadhead" trips in order to meet 48-hour advance reservations. These additional trips would probably add to the total of bus emissions.

The Department finds that this rule has no significant environmental impacts that would warrant either the preparation of a full EIS or the withdrawal of the rulemaking.

Rest Stops

The NPRM proposed that operators of accessible buses would have to permit passengers with disabilities to use the lift to get off and back on the bus at rest stops. It proposed that operators of inaccessible buses would have to provide deboarding and reboarding assistance to passengers with disabilities at rest stops, as long as doing so would not unreasonably delay the trip.

Disability community commenters strongly opposed the proposal concerning inaccessible buses. They said the "unreasonable delay" language did not protect the rights of passengers to have nondiscriminatory access to rest stop facilities. Operators should not have the inhumane discretion to determine when, or for how long, a passenger with a disability can use a restroom, they said. Moreover, all or some rest stop facilities themselves should be required to be accessible, so that passengers did not get off buses only to confront an inaccessible restroom.

Commenters proposed two requirements beyond those discussed in the NPRM. First, while acknowledging that the ADA does not permit the Department to require the installation of accessible restrooms on buses if doing so will result in the loss of seats, some comments suggested that many operators now purchase buses with larger seating capacities than Congress contemplated in 1990 when it enacted the ADA. One could install an accessible restroom and have no fewer seats than Congress intended a bus to have at that time, they said, complying with the intent of the statue.

Second, with respect to buses with inaccessible restrooms traveling express routes with long intervals between rest stops, operators should be required to make unscheduled rest stops to accommodate passengers who cannot use the on-board restroom. This is the only way, commenters said, to provide necessary and nondiscriminatory service to passengers with disabilities, who otherwise would unfairly have to take uncomfortable steps (such as dehydrating themselves before a trip) to adjust to the denial of restroom facilities.

Bus industry commenters generally supported the NPRM proposal. They asked for additional guidance on how to determine whether a delay was unreasonable, suggesting that schedule disruption should be an important consideration. These commenters strongly opposed the disability community request for unscheduled rest stops (or more frequently scheduled rest stops) on express bus runs. They said it would fundamentally alter the nature of express service by creating delays that would make it very difficult to meet schedules, causing chaos with respect to interline connections, and reducing competitiveness with other modes of transportation. Industry comments also took the view that most rest stops were either accessible or becoming accessible, and that bus operators should be able to make use of those that were not on the same basis as other persons or businesses.

DOT Response: When the final rule’s requirements begin to apply to an operator, that operator will have to ensure that an accessible bus (or, in some cases, equivalent service) will be provided to passengers, either routinely or on 48 hours’ advance notice. For this reason, the need to provide boarding assistance to paasengers at rest stops should occur only in rare cases (e.g., when there are more wheelchair users on a bus than there are securement locations). Situations involving transportation of wheelchair users on inaccessible vehicles should occur rarely if at all after 2000-2001.

The Department is persuaded by disability group comments that operators transporting disabled passengers have an obligation to assist passengers on and off buses at rest stops, even on such rare occasions. To stop at a restroom or a restaurant, allow everyone else to get off the bus and use the facilties, but refuse to assist wheelchair users or other persons requiring boarding assistance in leaving the bus, would treat the latter class of passengers differently from all others based on their disability. It is difficult to square such different treatment with the language and purposes of the ADA.

The Department is not persuaded by disability group comments that we have the discretion to require accessible lavatory units on OTRBs as long as it will not result in fewer seats than on a typical 1990 OTRB. It is better to read the statute to preclude a requirement for accessible restrooms in any situation in which installing such a unit would reduce the number of seats to less than it would otherwise be. If a 55-seat capacity bus would have space for only 51 seats after an accessible restroom is installed, we believe that this is a seat loss for the bus even though more seats remain available than on a 1990-model 47 passenger bus.

Rest stops themselves are Title III (or sometimes Title II) facilities for ADA purposes. Many, though not all, are or will become accessible. As a general matter, we do not believe it is fair to require organizations who bring people to these facilities to be responsible for the facilities’ accessibility. It would be going too far, in our view, to mandate that bus companies stop only at facilities that are actually accessible. Nevertheless, there are some situations in which it is appropriate to impose obligations on bus operators. For example, if the bus company owns or controls a facility (e.g., a bus station) and uses the facility as the place where it makes rest stop services available to passengers, then use of the facility effectively becomes part of the bus company’s package of transportation services. This is also true if the bus company contracts with a facility to provide rest stop services (e.g., a tour bus company contracts with a restaurant as a place where the bus will make a food and restroom stop). In these cases, it is reasonable to insist that the bus company, on its own or through a contractual relationship, ensure the compliance of the facilities with ADA requirements.

Unscheduled rest stops are a difficult issue. On one hand, if a bus takes three hours to go between Points A and B with no stops and there is an inaccessible restroom on board, non-disabled passengers have the chance to go to the bathroom over the three-hour period and disabled passengers do not. This facially different treatment raises a discrimination issue under the ADA. On the other hand, if a bus making such a trip is scheduled to interline with another company’s bus at the next destination, and incurs an unscheduled 30-minute delay because of a rest stop request, the schedule and transportation for other passengers could be disrupted. Such disruptions, and other effects mentioned in industry comments, could be more than trivial.

The Department believes that, since both sides of this issue have merit, it is reasonable to find a middle-ground solution. The final rule will require bus companies to make a good faith effort to accommodate the requests of passengers with disabilities for an unscheduled rest stop, but will not require the bus company to accede to such a request when doing so would unreasonably delay the trip or disrupt service for other passengers. The bus company would retain discretion with respect to making the unscheduled stop, but would owe the passenger an explanation for a decision not to make the stop.

Final Rule on Over-the-Road Buses
First Section ~ Final Section

Briefing Room