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H.R. 2273 ANNUAL COST FOR CREYHOUND
The following is an analysis of the annual, per bus operating costs to Greyhound of the requirements of H.R. 2273, using the lowest and highest realistic cost estimates. The calculations assume a 9.000 bus fleet with 100 buses being purchased each year and used in the fleet for 10 years. Thus, capital costs, such as purchases and Installation of the lift are amortized over a 10 year life. The total annual cost figures appearing at the bottom of the page represent the per bus costs mulltplied by 4,000 buses.
Loss of Package
High estimate Is due to package express capacity.
Aclual best estimates of those that have used the Illis In question.
Cost of Loss of
$12,000.00 (10 seals)
Annual cost of extra buses due to lour
Annual training costs based on DOT alrllne requirement of one day training and retralning lor
operatlonal personnel. Dillerential Is due to dillerent levels of travel and lodging costs.
Per Bus Annual Operating Cost
Low and high estimale ol tolal annual per bus cost of wheelchair illt and accessible restroom.
These numbers, If anything. are too low. They do not Include estimated Increased Interest and Insurance costs. We have not been able to finalize those cost estimates, but typically capital equipment is linanced and there is consensus that Insurance costs would increase. In addition, the latest Ilgures from the agency supplying the "low estimate" liit purchase ligure Indicate that this estimate needs to be increased by at least 50 percent.
Mr. CURREY. Greyhound first utilized, in arriving at its numbers, the low cost of the Hubmatic lift provided to us initially by the people in Denver; that is $10,000. We have continued on our low cost estimates to use that $10,000, or a 5 percent of a $200,000 bus number.
I would emphasize that that number is not borne out by the estimates given to us by Hubmatic distributors, in that their estimate to us for very large numbers is $15,000, not $10,000 and further, the distributor says that the distributor by no means will guarantee that package express or luggage space is not utilized in that process.
In any event, how we arrived at the numbers; we began at the $10,000, 50 percent too low number from Hubmatic. Our estimates were done on the basis of amortizing that over 10 years. Restroom installation amortized over 10 years, cost of loss of seats due to the lift of $2,400.
A cost of loss of seats due to the restroom of $4,800. We did not provide for any lost revenue figure whatsoever from package express, which is fallacious, frankly, but we could not do so accurately enough to sustain credibility. We provided maintenance costs of $1,000 a year. That is one penny and a half a year on a vehicle that operates 66,000 miles a year.
That is a low, low cost. Keep in mind I have been in the wheelchair lift business with the Dallas Transit System myself, so I know something about the cost of maintaining and operating lifts.
Finally, we provided numbers for training costs, so that we used arithmetic that fully implemented, ADA on the minimum side would cost our company using 10-year amortization schedules, $30 to $40 million. Frankly, I know as a businessman that is a low number but I felt no need to argue with anyone from RTD in Denver or anyplace else, because that number, although low, is so punitive that there is not much need to argue that it is any higher.
Mr. MINETA. If there was an exemption for restroom accessibility, as I said earlier, and that chart you indicated represents $4,800 of that $10,100, does that make a difference?
Mr. CURREY. Well, if that amount were exempted we would have to ask you to take more into account what we believe to be the real cost of the lift, or $35,000. Let me for a moment speak to the restroom accessibility issue.
If you will please visualize the route I was on a few weeks ago going from Santa Barbara to Oxnard, Ventura, Santa Monica to L.A. I rode that route and spoke with every passenger on that route. If a person was on that route and we had utilized a wheel. chair lift promising full accessibility as defined by a wheelchair lift and we did not provide accessibility to the restroom, we would be holding out an inappropriate hope for that passenger.
I don't think that is consistent with what any of us wish to do in that if that passenger needed physical relief to use the toilet during such a trip, it simply would not be available. But there is a further problem with that, in that even with a fully accessible restroom on that route, accessibility to the toilet except at stops, for a person in a wheelchair would be highly questionable because of the way the road weaves up and down.
I think it is important, we hope, for you to try to examine us, as you are doing quite ably with our numbers, because no matter how we cut these numbers the cost is so excessive that it will force a massive restructuring of our business.
The bill as enacted, that second portion which treats us like transit, simply does not represent reality because we are not like transit. That is a different system.
Mr. MINETA. How much of that cost of the $10,100 would recover on the sale of that bus?
Mr. CURREY. That is an interesting question. We believe what we testified to earlier with respect to the numbers of people in wheelchairs; that is using the 1978 figure of 400,000 or the current figure of 760,000. We believe, based on the Peter Pan experience, that the proclivity of Americans in wheelchairs who travel on intercity buses is not substantially higher than the proclivity of Americans at large to travel by intercity bus.
We believe there is such a de minimis factor that the wheelchair lift equipped bus on sale would be a drag on the market, not an asset on the market, and we would be forced to reconvert for very private use, which is to say church or school, or as a school bus it would be exempt and many buses go into the use of church-related activities, it would not be required. We believe that the usage indicates that it would not be needed and rather than an asset on the sale, it would be a liability on the sale.
Mr. MINETA. In looking at their route structure prior to deregulation compared to since that time, what would you say is the cut back in terms of the number of stations or stops?
Mr. CURREY. From 1976 to 1987 when we bought this asset the cut back was 50 percent. This is documented by a DOT study. It went from 20,000 places served to approximately 9,500 places served. We have been able through our rural connection program and through our outright refusal to reduce any rural service except in the most disastrous circumstances—I mean we reduced some in Kansas that were generating 10 cents a mile, but we had net added service and we have added a large increment of service through connecting with the rural systems.
We believe we have now stabilized that. It is right off of our books in Des Moines, which are open to audit by this committee, that we arrive at the 32 percent of our restructure that is cost subsidized by solid routes. So you go from 20 to 10. That is very well documented. We believe with the ADA cost we will have to go from 10 to five.
We believe that is what this structuring would do. If we have the costs out here facing us, we have to get on with this restructuring. It might in the short term enhance profits until such time as ADA came on, but we have to get on with this structure with anticipation of those costs.
Mr. MINETA. You are saying about 50 intercity locations would lose bus service upon enactment of ADA?
Mr. CURREY. Yes, sir. Look at this map from Texas. I just say, Mr. Noonan here from North Carolina.
Mr. MINETA. Do you have all the states of our Members of the committee up there?
Mr. CURREY. I don't have California. No, sir, I wouldn't do that. I hope I am more astute than that. Here is North Carolina. The yellow lines are the connecting carriers. The pink are our routes that would go negative under the ADA cost structure.
The blue are the routes that would remain. What happens is that the whole infrastructure gets collapsed down just like the 20,000 to 10,000 that occurred from 1978 to 1987. That is what we want to avoid. We think that is not necessary if we can get the same definition of accessibility with the same penalties I might add, that school bus operators have, airlines have, et cetera. We don't want anything any different.
We don't want not to be under the gun. You can put us under
Mr. MINETA. How many of those communities would lose service in any event without passage of ADA?
Mr. CURREY. Since 1987 we have increased the number of communities served, we resolved to do that. I wish a Member was here from Ohio, there is one, Mr. McEwen. I can show how our commission agents in Ohio, Lee and Jane Woods, improved service. There is a positive example of the private industry restoring service with no subsidy.
Here is Sandusky, Ohio, you will notice the yellow line from Sandusky to Freemont, Norwalk and back to Sandusky. That is run twice a day by a van service, utilizing our franchise name on the side of the van, by Lee and Jane Woods, our commission agents in Sandusky. What happened there was that this local road had service collapsed, as did a cross road that does not show on this map. What we have here is two private entrepreneurs who have established a pick up and delivery service.
They are serving senior citizens' homes. I rode this van on its inauguration. The mayor of Port Clinton said, "I never thought I would welcome anybody from Greyhound to this town, because when you abandoned us I really hated you." So we have gone back. We are asking you not to put us back into the shape we were in in 1978 yet for a different reason.
We are not pleading not to provide accessibility. We are willing to provide accessibility consistent with the definitions of airlines, school buses and all other public carriers, but not the ones, the definitions for federally funded transit systems.
Mr. MINETA. If Congress were to enact that ADA that requires to provide accessible service, not just accessible vehicles, how will Greyhound determine how many vehicles will be needed to provide access for vehicles with disabilities?
Mr. CURREY. I think there are two ways to address that. The present legislation provides for a study. We do have the Peter Pan example.
Mr. MINETA. You said the present study requirements. I thought that was pretty descriptive.
Mr. CURREY. We believe the study should determine the need. We believe we have a profile of what the need is. We believe that a specially designed chair can permit the use of a intercity bus for charter, tour and regular route by persons in wheelchairs with im.proved grace and dignity.