Ensuring Fair Competition in Bus Services for the 2024 DNC Convention

This article was updated July 22, 2024.

The upcoming Democratic National Convention (DNC) in Chicago, scheduled for August 19-22, 2024, has sparked a contentious debate over the provision of charter bus services. The Chicago Transit Authority (CTA) has requested an exemption from federal charter bus regulations, which the American Bus Association (ABA) argues would undermine fair competition for private bus operators.

Recently, the ABA filed a formal opposition statement/filing to CTA’s petition for an exception. The Association urges the agency to deny the CTA petition for an exception to federal charter bus regulations for the 2024 Democratic National Convention (DNC). The ABA asserts that the CTA did not follow proper procedures in consulting registered private charter providers, and, despite the CTA’s claims of exhausting all efforts to secure private charter services, ABA members have reported inadequate outreach and consultation:

The ABA believes CTA has not met its responsibilities under 49 CFR 604.11(b)(4)(i) and urges FTA to deny its petition for exception. Specifically, ABA believes the petition should be denied based on the following reasons: 1) CTA and the event organizers did not follow proper procedures pursuant to 49 CFR 604, there was no good faith consultation by either the event organizers or CTA with registered charter providers; 2) CTA did not exhaust the inventory of all available private providers prior to filling its petition as directed under 49 CFR 604.11(b)(4); 3) CTA made unreasonable/unnecessary equipment demands in its request to private operators; and 4) the Convention does not meet the conditions of any other category under 49 CFR 604.11(a) warranting an exception.

The ABA highlights that over 40 private operators expressed interest in providing services for the convention, contradicting the CTA’s assertion of unavailability. Moreover, unreasonable equipment demands and a pre-determined conclusion to utilize CTA vehicles indicate a lack of good faith negotiations. This issue is further underscored by the fact that no similar exception requests were made for the Republican National Convention in Milwaukee, which faced similar logistical demands. The ABA thus calls for the FTA to uphold the integrity of the federal charter regulations and ensure fair competition in bus services for the 2024 DNC.

The ABA represents over 3,800 members, including 1,000 motorcoach operators, and has significant concerns regarding the CTA’s request for exemption. The CTA’s request to bypass the established federal protections (49 CFR Part 604) would unjustly disadvantage private charter bus companies, which should be safeguarded against competition from federally subsidized public transit operators.

Federal charter bus regulations are designed to ensure that private bus operators have the opportunity to compete for contracts, particularly for large-scale events such as national conventions. The rules distinguish between publicly funded transit services, meant for regular route operations within urban areas, and charter bus services, typically private operators’ domain. By seeking an exemption, the CTA aims to monopolize transportation services for the DNC, potentially sidelining private operators who rely on such events for significant revenue. This potential outcome could significantly disrupt the balance of competition and fairness in the bus services sector.

The Association’s opposition to the CTA’s exemption request is grounded in the principle that public transit agencies should not use their federal subsidies to outcompete private businesses in the charter sector. This principle is especially pertinent given that no similar exemption has been requested for the Republican National Convention (RNC) in Milwaukee, WI, set for July 15-18, 2024. Both conventions are expected to draw large crowds with similar transportation needs, making the CTA’s exemption request appear inequitable.

We previously submitted a letter to Secretary of Transportation Pete Buttigieg, dated June 7, 2024, underscoring the importance of adhering to federal charter bus regulations. Peter Pantuso, President and CEO of the ABA, emphasized that “public transit agencies like the CTA are intended to complement private bus operations, not replace them.” The ABA contends that the CTA has not demonstrated that their request aligns with the intended use of public subsidies, which are meant to cover services where private operations are not viable and not to compete directly with private sector services. “Upholding these regulations is crucial to maintaining a fair and competitive bus services market,” says Pantuso.

The argument hinges on the legislative history, which underscores the role of public transit as a supplementary service, filling gaps rather than displacing private operators. The ABA’s stance is clear: the DNC represents a significant economic opportunity for private bus operators, and denying them access to compete for service contracts by granting the CTA’s exemption would be contrary to the spirit and letter of federal regulations.

This debate is more than a bureaucratic squabble; it touches on fundamental issues of fair competition and the appropriate use of public funds. The ABA’s position is that the CTA’s request, if granted, would set a dangerous precedent, allowing public agencies to leverage their subsidized status to crowd out private competitors in the charter service market. This potential precedent could have far-reaching implications for the future of fair competition in the bus services sector.

As the DNC approaches, the decision on this exemption request will have significant implications. It will determine whether private bus operators can fairly compete for business generated by such significant events or whether public agencies can override established protections designed to foster a balanced and competitive market.

Ultimately, the ABA’s appeal to Secretary Buttigieg is a call to uphold federal charter bus regulations and ensure that private bus operators have a fair opportunity to participate in the economic benefits of the 2024 DNC. The outcome of this issue will likely reverberate beyond this single event, influencing the landscape of competition between public and private bus services in future large-scale events.

What can you do to help?

Sign up today with the FTA Charter Bus website to prevent CTA and other transit agencies from unlawfully obtaining charter bus contracts. Stay informed and seize charter bus opportunities sought by transit agencies. Remember to renew your registration every 2 years to stay current. Join now to safeguard your chance for future charter bus work.