United States Transit Funding, Inc.

United States Transit Funding, Inc. – Position Paper on Insurance Limits for Passenger-Carriers & Brokers

February 24th, 2015

From the Desk of Barry Lewis, Chief Executive Officer
United States Transit Funding, Inc.
PO Box 133
Cherokee, Iowa 51012
(712) 221-4095

 

Re: Docket Number FMCSA-2014-0211

On behalf of United States Transit Funding, Inc., I am writing in opposition to one topic and in support of one separate topic related to Docket Number FMCSA-2014-2011.

In accordance to the Bus Regulatory Reform Act of 1982, United States Transit Funding, Inc. continues to support the statutory minimum of $5,000,000 that is currently set for passenger-carrier companies regulated under 49 CFR 387.

Within the passenger-carrier industry, more than 90% of the passenger-carrier companies in the industry have less than 100 commercial motor vehicle (CMV) units within their fleet and more than 30% of the industry have between one and 25 motor coach units.

We are a proponent that increased levels on the minimum standard for insurance coverage would have a concerning and mitigating effect on the passenger-carrier industry leading to less of a competitive business environment, with a specific focus on passenger-carriers that provide transportation services for 15 passengers or more and would lead to a more concentrated focus on larger operators able to centralize the competitive market and would lead to negative safety results because of the reduction in workforce levels needed to maintain a competitive labor market.

Additionally, we have seen no cause and effect between companies that have had a significant insurance loss schedule because of FMCSA safety regulatory violations and how it mitigates the risks of other companies within the same industry or service.

Because of this evaluation, we see no benefit for other companies that do follow FMCSA passenger-carrier safety regulations with minimal loss schedules that should have to have an increased statutory minimum in comparison to companies that have accrued repetitive violations across the BASIC categories, including accident thresholds requiring passenger-carrier safety intervention.

It is our opinion that the FMCSA should maintain current levels of $5 million for passenger carriers in order to enable small operators of 25 bussing units or less a competitive and level playing field.

With that said, we applaud the FMCSA’s efforts to impose bond or insurance requirements on brokers for motor carriers of passengers pursuant to 49 USC 13904(f).

Throughout the United States of America, there are for-profit companies, like US Coachways, Subout.com, TPA Group, Inc. of Chicago, BusBank, and Charter Sales LLC of Maryland, which have not met state regulations in order to declare their business purposes and legally work with state and federally-regulated companies within the passenger-carrier industry.

Furthermore, brokers are frequently deemed unregistered, unlicensed and uninsured by state regulatory bodies, including public utility commissions and Departments of Public Utilities, that govern statewide passenger-carrier safety rules. We are a proponent of brokers being subject to fines and requirements to be regulated on a state and federal level as broker companies continue to take business from consumers who then broker that business to passenger-carrier companies without taking the necessary precautions needed for the consumer to ensure safe, effective and affordable passenger transportation pursuant to MAP-21.

Additionally, since brokers feel that they are not subject to passenger-carrier regulations, they feel that they are able to book business without proper due notice to ensure that a company is able to have a bus unit and driver available and more importantly eligible to operate safely, effectively and affordably. This has been a very common pattern of business practice by “brokers”.

Historically, brokers have not properly screened drivers through a company dispatcher to ensure that a hired motor coach operator is eligible to complete any booking and brokers have had a historical pattern of not providing timely and accurate information related to a booking to ensure hours of duty status, among other passenger-carrier safety regulations.

It is our view that brokers, like US Coachways, TPA Group, Inc., Subout.com, Bus Bank, and Charter Sales, LLC of Maryland, should be subject to the same standard of filing evidence of financial responsibility with each consumer that it does business with in accordance to 49 USC 13904(f) and within each state jurisdiction, similar to an IRP (International Registration Plan) requirement for each passenger-carrier company within the jurisdiction of the United States.

The consumer and accrued benefit is consumer and passenger protections so that someone that purchases passenger-carrier transportation services receive safe, effective and affordable passenger transportation while also ensuring an equal playing field throughout the United States so that passengers and consumers can make fair decisions on whom they are going to do business with.

We are strongly recommending that 49 USC 13904(f) have a change in its statutory language from “may” to “shall”.

 

Sincerely,

 

Barry Lewis, Chief Executive Officer
United States Transit Funding, Inc.
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