Industry Research

What Is The Best Deal In Ground Transportation?

LCT Staff
Posted on May 4, 2011

The American Bus Association shows how private bus operators get the best value for the business dollar while barely burdening U.S. taxpayers.

WASHINGTON, D.C. — A new study released by the AMERICAN BUS ASSOCIATION Foundation (ABAF), titled “Federal Subsidies for Passenger Transportation, 1960-2009,” has found that the private commercial bus industry is the most feasible and efficient mode of public transportation in the U.S.

The motorcoach industry takes travelers on an average of 745 million passenger trips a year and does so with practically no federal subsidy. As legislators contemplate the future of the national transportation network, the ABA says the motorcoach industry should serve as an example of how private sector companies can provide reasonable transportation solutions.

The per-passenger trip subsidies from 2002 to 2009 are as follows:

• Amtrak received $57.04 per passenger trip.

• Private sector commercial air received $6.35 per passenger trip.

• Publicly-funded mass transit received 93 cents per passenger trip.

• Private sector commercial bus operators received 10 cents per passenger trip.

The private sector commercial bus industry subsidy is nearly fully accounted for by its partial exemption from the diesel fuel tax. Even with the exemption, when considering the federal costs buses impose on highways and related services and the excise tax revenues paid by the industry, the industry receives virtually no subsidy. Unlike other forms of passenger transportation, bus industry tax revenue nearly offsets total federal outlays on behalf of the industry. The cost of the overall federal subsidies granted to the private commercial bus industry were less than half of one percent of the subsidies to other modes of transportation.

Without the partial exemption, which is worth 17 cents per gallon of diesel fuel purchased by the industry, private sector commercial bus service would have contributed an additional $56.3 million to the Highway Trust Fund in 2009. This additional amount would have cut the industry’s already negligible subsidy of $83 million in 2009 by two-thirds. Considering the private sector commercial air passenger industry’s subsidy of $5 billion, Amtrak’s subsidy of $1.8 billion, and mass transit’s subsidy of $11.3 billion in 2009, loss of the partial exemption would have insignificant effect on federal outlays, but significant effect on the private sector commercial bus industry.

“This study shows that our industry has a great story to tell the American people,” said Peter J. Pantuso, President and CEO of the ABA. “Our industry provides cost-effective and environmentally friendly transportation. Bus operators serve intercity travelers, commuters, tourists, and in particular, rural communities that lack other transportation options. Motorcoach operations do not require massive new investments in infrastructure and facilities and provide direct employment for over 600,000 Americans.”

Source: AMERICAN BUS ASSOCIATION

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