The School Service Rule
Ubiquitous yellow school buses dot the American landscape, delivering millions of children to school every day. Most of these school buses are owned and operated by the local school district. However, in some areas the local school district contracts with private bus companies whilst in others many students take local city buses to school. In conjunction with the charter rule , the Federal Transit Administration has issued regulations in an attempt to prevent local transit agencies who receive federal funds from unfairly competing with private bus companies in the provision of school service.
Tripper Service OK, Exclusive Service Not OK
In the pertinent regulations (49 U.S.C. § 5323(f)), public transit providers who receive capital or operating assistance from the federal government cannot provide school bus transportation that exclusively transports students and school personnel in competition with a private school bus operator.
Traditionally, there has been a "tripper" exception that allows public transit agencies to operate extra service on regular routes to meet the demand caused by school children; these trippers may even make "de minimis" route deviations in order to directly stop in front of a school building.
Some transit agencies have gone farther than merely operating trippers by operating a large number of unique bus routes designed to serve schools and operating only on school days. Transit agencies that have routes like this include two providers in the San Francisco Bay area in California: SamTrans of San Mateo County and A.C. Transit of Oakland. An additional one is the Rochester-Genesee Transportation Authority of New York. These networks have operated in a gray area under this regulation; although the routes are clearly school routes, without exception they are open to the public and thereby do not exclusively transport students.
Rochester-Genesee Regional Transportation Authority (RGRTA) v. Hynes - Cherin
In Rochester-Genesee Regional Transportation Authority v. Hynes - Cherin (No. 07-CV-6378L, United States District Court, W.D. New York, January 24, 2008), union members of a private bus company charged that the RGRTA, which had recently entered into an agreement with the local school district to operate more than 240 express routes to area schools, was unfairly competing with local private bus companies for school service.
The judge ruled for the RGRTA because these new routes did not "exclusively" serve students; although they were designed for students they were open to the general public, stopped at all regular bus stops, and were included in system timetables . Under this ruling, even if few (or even no) members of the public would use a special route, if it was possible for them to do so that would be enough to defeat the exclusivity clause.
As a result of this decision, FTA attempted to rewrite its regulations to outlaw this kind of service provision out of a fear that the decision would allow for a wholesale take over of school bus operations by local transit agencies. As of November 2011 the FTA has not revisited this subject, which leaves the court decision as the current final say on the matter.
This decision has not lead to the wholesale destruction of private school bus operators; instead, it has given local school districts greater scheduling flexibility. No more do high schools have to begin at 7:30 AM to allow for the same school bus to deliver high school, middle school, and elementary school students. As more and more studies demonstrate the academic advantages that accrue to high school students that attend later-starting high schools, this court decision could eventually lead to improved academic performance for America's youth.
In addition to scheduling flexibility, this arrangement allows for financial flexibility. Usually, but not always, the public transit operator can operate service cheaper than a private operator because there are synergies available where the chartered services can be blended in with existing service, which could potentially lower deadhead and layover costs. And with an economic downturn putting extreme pressure on school budgets that has caused school districts to severely cut back on their non-classroom budgets (including transportation), we can expect more of the job of bringing students to and from schools to fall on the local transit agency.