Mr. Chairman, I would like permission to submit questions into the hearing record so that our witnesses might provide me with their insight.

Thank you, Mr. Chairman, for allowing me to participate at today's hearing.

Mr. SHUSTER. Gentlemen, I want to thank you for your testimony today. I think it has been both rational and well reasoned. I have seldom seen a piece of legislation which under the banner of doing good, does so much harm to low-cost transportation availability, particularly for the poor and senior citizens.

I hope we can fix it because I certainly hope we can have legislation to take to the floor and get to the Congress so we can provide reasonable improvements for the disabled of America.

Mr. Currey, you talked about reducing the number of communities served from about 10,000 to 5,000 communities. Of the 5,000 communities that would no longer get your service, how many would no longer have other public transportation available to them? In other words, where you are now the sole provider?

Mr. CURREY. In the vast majority of those communities, we are the only provider.

Mr. SHUSTER. We are talking about close to 5,000 communities having no public transportation service if the bill as passed by the Senate becomes law.

Mr. CURREY. And in many of those communities, in addition to the passenger business, we are the life blood through the package express distribution system, literally transmitting blood as a very major category to small town hospitals.

Mr. SHUSTER. Let me come back to a subject which the chairman ended on, which is trying to understand how a small charter company will provide service. Let's say a rural charter bus company has somebody in a wheelchair who wants to go on a charter tour, and we have given them some form of exemption, and they do not have the requirement that they have to have lifts on all their buses. They have no lifts on any buses. You are saying that they would pick up the phone and call a city, a public transit facility, and say, "We want to charter a deluxe transit bus with a lift for a 10-day period," if it is a 10-day charter. What is the requirement, and what is the probability that that public transit system is going to have a bus available and be willing to provide it?

I can see some of my friends in Pittsburgh and Philadelphia not being particularly responsive unless there is some stick that requires them to be. I can see them saying, "Wait a minute, we have that bus out, we are using that bus, we don't have that $200,000 bus sitting there just waiting for a little rural charter company to telephone us once every four months and ask for the bus." How reasonable is it that such a bus would be available?

Mr. CURREY. Well, we think it is quite reasonable should the Department of Transportation establish regulations with respect to the use of such a bus. It is like having a standby vehicle, but a standby vehicle available for use in the community at large as opposed to the capital cost of equipping all the vehicles in the community. So it is not as if that bus would get maximum total usage unless we are all wrong about the demand, in which event we would need more buses.

Mr. SHUSTER. So we could just as easily, instead of giving it to a public transit operator in a city, we could establish a pool of 10 private bus companies and subsidize their having one such bus.

Mr. CURREY. We could. We could.

Mr. SHUSTER. So you are saying-I understand where you are coming from. I have difficulty seeing how this is going to work smoothly, but I appreciate your response.

Let me turn to the Denver lift and your assessment of it. We have had testimony here ranging from its low cost, it works fine, and it is the wave of the future to testimony that it is only a couple of prototypes and we don't know really what it is going to cost, we don't even know if it is going to work.

What is your assessment of the Denver lift?

Mr. CURREY. My assessment of the Denver lift is that, point one, we utilized the suggested cost of the Hubmatic lift provided by Denver RTD in our low-cost estimate, as I have previously testified. However, we went to Stewart & Stevenson Headquarters in Houston, a very, very major distributor of Hubmatic in the United States. Stewart & Stevenson's installed cost ranges from $15,000 to $17,000.

Further, Stewart & Stevenson states that it will require very substantive restructuring of the flooring and package express space, diminishing the place available for luggage or package express by as much as one-half. One-third to one-half are the estimates.

Finally, Stewart & Stevenson has yet to provide us with any estimates about what the maintenance cost is.

Now, I would like, if I could just for one moment, to differentiate that use in inter-city service from use in transit service. Transit service is a hub-spoke service. I worked deeply and for long years in the transit business in a pro bono job. Transit service is a hubspoke service so that equipment sits idle every night between 11:00 to 12:00 p.m. and 6:00 a.m., when the big roll-out is the next morning. Our bus leaves New York City, and it is on the road for four days before it gets to San Francisco or LA, or three days before it gets to Miami, et cetera, et cetera, et cetera. So the ability to sustain and make quality maintenance for the safety of the patrons using the bus is an entirely different proposition.

Further, the pattern of usage of transit buses equipped with wheelchair lifts and those equipped for inter-city purposes is entirely different, as is borne out by the Peter Pan experience, in that transit passengers establish a pattern. So if there is a lift-equipped bus by the spot every 10 minutes during the period of time of going to and from work, people get into a transit pattern to and from work.

That is not the way inter-city travel is accomplished. It is an entirely different decision pattern of deciding to make a trip by intercity bus. It has to do with the fact that we only handle travel for one percent of all Americans, so to conjure up an example that extrapolates the Denver experience into the inter-city experience is nonsense, sir. It is absolute nonsense, and the cost estimate is nonsense, too, even though we have continued to use it.

Mr. SHUSTER. I don't want to put words in your mouth, but what is your assessment, then, of the reliability of the Denver lift as applied to inter-city bus travel?

Mr. CURREY. My assessment is that both on the cost of maintenance and on the original cost of the lift, we have far under-estimated it in our low-cost estimate. We are much closer to our highcost estimate, but no need to argue the higher cost estimate, frankly, because the lower cost estimate is a bullet to the heart to us. Mr. SHUSTER. Does that mean with adequate maintenance, with substantial maintenance, it has worked reliably for sustained periods of time?

Mr. CURREY. We don't know that it is, but I wouldn't say it is not. I am a believer in technology, either the MCI lift or the Hubmatic lift. The lift, there is no mystery about it. It can be made to work, it is only a matter of money and labor dollars to maintain it. I wouldn't argue for a second a lift couldn't be made to work, sir. It is all a matter of price.

Mr. SHUSTER. Let me turn to some of the smaller bus operators. Is it not reasonable for a small bus operator to look at the ADA Senate version, if it passes, and say to himself, "I am going to make a prudent business decision here which is, fundamentally, I am going to disinvest because the bill doesn't take effect for what is it-seven or eight years, six years." The smaller operators, because you have some years, why wouldn't the prudent businessman say, "I will simply run my fleet into the ground, in fact increase my profitability or increase my cash flow in the short run over a period of five, six, seven years and get out of the business or sell off what I have left to whoever wants to stay in the business," maybe to Greyhound or to somebody else, why wouldn't that be almost a classic kind of a prudent business decisions that a small businessman would make?

Mr. BUSSKOHL. I would think that some people would do that, you bet, and one of the things that would maybe force you to that is your banker that says you will pay the rent. If you are going to stay in the business, there isn't a prudent banker in the world that is going to give you a loan, which we always have to have on a $225,000 piece of equipment, that would in his right mind give you a loan on that thing.

Mr. SHUSTER. Is it reasonable, or am I going too far when I say, that in addition to the problems that Greyhound has outlined and your profitability problems of a small bus owner-is it reasonable to assume that there will be an acceleration of disinvestment and getting out of the business by the smaller owners as a result of the ADA bill if it becomes law?

Mr. HENRY. Congressman, I think that there is a very definite issue there. A family corporation like we have, we are now in the fourth generation; my son, this same thing came up, he said, "How do you see the future of this industry?" He doesn't care whether it is buses or planes or boats, he has to make a living for his family. I said we would sit down and see what our ROI was in this industry. Quite frankly, with what we are talking about today, he wouldn't be in this industry. That is a business decision.

Mr. SHUSTER. That is in addition to the ones we have been talking about here today, isn't it? All right. Thank you.

One final point, Mr. Currey. When you talk about serving 10,000 towns down to 5,000 towns, I presume you have calculated-if you have 10,000 towns and if 32 percent of your miles are at a loss today, and if that is going to go up to 51 percent, that means that you have a base that you are serving today which includes 32 percent.

If ADA passes, the base is reduced.

Mr. CURREY. Right.

Mr. SHUSTER. And so you don't have the same percentage of profitability to spread over even a smaller 32 percent base?

Mr. CURREY. That is exactly correct.

Mr. SHUSTER. So the implication is an accelerated leverage to reduce the communities you serve, and I presume that kind of calculation is built into your reduction from 10,000 to 5,000?

Mr. CURREY. Exactly, and that is why we would have to begin almost immediately to rationalize these routes-that is the euphemism for eliminating small towns-to rationalize these routes into a different kind of route structure, because we couldn't do it overnight because we would stand the risk of collapsing the whole system.

Mr. SHUSTER. Let me ask you one final question. As a businessman running a company to make a profit, why do you serve 32 percent of your mileage today when it is operating at a loss? What does your Board of Directors say? Don't they ask you that kind of a question?

Mr. CURREY. Often.

Mr. SHUSTER. I would think so.

Mr. CURREY. It is a balance between the feed that you get from the lost routes and the miles on the profitable routes that that feed runs. It is that balance. Those of you that dealt with matters of air transport during the days of regulation will remember that bal

ance.

Well, that balance is obviously quite precarious for us because last year we lost $17 million on that balance, and don't think that I didn't get interrogated by the Board of Directors about it, because I sure as heck did for a long time. But I have been convinced that that field would be our life blood for the future if we could sustain that, and this year that is proving to be correct.

If I sound desperate about not wanting to reinstitute the divestment program, then that is a true representation of my understanding of the matters. I think it would be a desperately bad thing in the public interest, in our customers' interest, in my own shareholders' interest, and I know in our employees' interest, because we are going to have to get them out of there by large groups.

Mr. SHUSTER. Does part of your thinking in terms of your longterm strategic thinking include the thought with further concentration in the airline industry prices will be going up in the airline industry, and, therefore, you stand to benefit from that in the long run?

Mr. CURREY. Yes, sir.

But I would urge consideration of our actual results. For instance, in the month of August this year we handled 837 million passenger miles versus 785 million passenger miles last year, an increase about which we are quite proud. But I would like to note

that we handled that as a result of a decrease in yield, that is revenue per passenger mile, from 917 to 907.

Mr. SHUSTER. Is that fixed route only you are describing?

Mr. CURREY. Yes, that is fixed route only I was describing. So it is further proof of the fact that demand for inter-city bus travel is closely tied to price, and I would also like to point out that an interesting phenomenon, extremely interesting phenomenon in our business, this route that originates in New York and goes across country through Cleveland and Toledo and Chicago becomes unprofitable west of Chicago going to San Francisco, so you might say that doesn't make any sense.

Well, it isn't because the loads are not on that route. Our average loads on that route are high, 23, 24 passengers. It is because the yield on these miles out here has to be very, very low to get any traffic at all, and we are operating that route, second, because we are cost subsidizing it with the setting between New York and Chicago where population is more dense, the miles are much shorter, so people will ride the bus at a higher rate per mile. But out here we are hauling people from Chicago to San Francisco at five and six cents a mile.

Now, what that means in conjunction with your airline comment is that we are not-I mean, the airlines can triple their price from San Francisco to Chicago, but there is an absolute maximum that a bus passenger can pay that isn't related to air fares, and so we bump up against that price, and that is what we call the stay-athome phenomenon. We say to our people all the time, "Look, we have got three competitors, the airlines, the automobile when it is used against the incremental price of a tank of gas, and "stay at home", and our biggest competitor is "stay at home". We compete against "stay at home" when our service is lousy or our price is too high, and so we have got to keep our service up and our prices down if we expect to survive.

Mr. SHUSTER. Thank you very much. Thank you, Mr. Chairman. Mr. MINETA. Mr. McEwen.

Mr. McEwEN. Thank you, Mr. Chairman.

I have appreciated the testimony very much. Just a couple of questions from the testimony we will receive shortly after you leave, and if you could respond to them, I would be appreciative. We have a general support for a regional transportation district which, as you know, operates with certain flexibilities that those in the private sector do not enjoy, but he is able to make observations such as this, that he provides the accessible wheelchair service without an increase in schedules, safely, reliably and cheaper.

He further points out that—would any of you have any comment on that as to how one can do that?

Mr. CURREY. Does he want to buy a bus company?

Mr. McEwEN. I am asking for some figures as to how much those in the rest of the country get to contribute to his ability to operate more cheaply, but we don't have those numbers as yet.

The same testimony goes on to point out that Denver has lost some four seats in the application of their lift, and then we have further testimony coming right afterwards, that the same manufacturer that Denver uses, when applied to a bus occupies zero bag