Page 1 of 3
[Note to Readers: This article is based on an educational seminar held at the 2012 International LCT Show. Lancer Insurance is an advertiser and exhibitor with LCT].
Many successful limousine companies have provided limo buses, mid-sized coaches and, in some cases, full-sized motorcoaches to their clients for many years. Since the 2007-2008 economic downturn and the economic damage to corporate and luxury transportation, many other chauffeured transportation operators are adding diverse buses to their fleets. Although that is a clear strategy for some operators, most should do some careful research and planning before making the transition.
SIDEBAR ARTICLE: NY Operation Dots The Details On Bus Service & Safety
It’s a different business
The process for expanding your business should begin with a business plan that first identifies the type of service(s) you intend to deliver: shuttle, charter, tour, line run, school, transit and/or private. The service type should be based on a careful market study and assessment of the need in your area. Once that research is done and you have chosen the services you intend to provide, then you can select vehicle type, style and model. A vehicle designed to transport 16 passengers or more, including the driver, is technically a bus. As such, there are many requirements with which you must comply, regardless of whether you are operating intrastate or interstate. Be aware, even if you will be working in-state only, there are still federal mandates with which you must comply, including the need for drivers to have appropriate class CDL licenses with the passenger endorsement and for your company to establish a substance abuse testing program that meets Federal Motor Carrier Safety Administration (FMCSA) requirements.
The second step in the process is to clearly evaluate how the vehicles will be used: either intrastate (operated in one state only) or interstate (crossing state lines or transporting customers who have moved across state lines during their travel). In most instances, opting for interstate authority will provide you with the most business flexibility, but it will require significant knowledge and compliance with state and federal regulations. This decision is perhaps the most critical because non-compliance will result in business interruption and possibly significant fines. The agency of the U.S. Department of Transportation (DOT) that oversees commercial vehicles transporting passengers (and cargo) is the Federal Motor Carrier Safety Administration. Knowledge of FMCSA and your state regulations is critical to your success. The FMCSA website www.fmcsa.dot.gov provides a lot of information, directions and suggestions about compliance with federal regulations. Also, be aware that depending on the size and type of vehicle(s), you may need to obtain and comply with Unified Carrier Registration (UCR) and fuel tax reporting (IFTA) requirements.
Although this article focuses on the federal requirements, remember to register and comply with all applicable state and local requirements for your operating area as well.