ALEXANDRIA, Va. — Victor S. Parra is departing an “exciting and dynamic” bus and motorcoach industry that can look forward to increasing customer demand for its services, he believes.
On the other hand, he worries that operators face overly burdensome regulations and barriers to entry that make it difficult for startups to justify the purchase of half-million-dollar motorcoaches.
Parra, 68, has announced his retirement from the United Motorcoach Association, effective March 31, after a career in association leadership and nearly 19 years at the wheel of UMA.
He discussed the motorcoach business and his UMA tenure with Bus & Motorcoach News, one of his contributions to the industry.
B&MC News: What is the state of the bus and motorcoach business? Where is it headed?
Parra: There is a good story and a problematic story. The good story is that companies have become smarter. They have diversified their services. They are doing more contract work. They have smaller equipment. We are seeing limo folks enter our business, which gives us another dimension. It is a very exciting and dynamic industry.
On the downside, we are seeing fewer companies. That is creating more opportunities for those who remain. We are seeing more mergers and acquisitions. FMCSA (the Federal Motor Carrier Safety Administration) is making it very difficult to get into the industry and also to operate. So we are seeing a fair amount of attrition and not seeing enough newer companies coming in to make up the difference.
We went through a couple of very painful periods, 9/11 (2001) being the most painful. After 9/11 our industry dropped off 40 percent. A lot of companies disappeared. Charter companies that were doing trips to Washington and shopping trips to New York went away.
Since then we are seeing companies getting smarter about utilizing their capital assets. How can they maximize revenue from this $500,000 to $600,000 piece of equipment? We as an organization have been doing a lot to help the industry operate smarter. We do a lot of education and training and put out a lot of information.
Bus & Motorcoach News is tremendous. It is probably the source of news and information for this industry. I am proud to say that (retired editor) Bruce Sankey and I launched that back in March of 2003. It is definitely one of our crowning achievements.
B&MC News: How are regulatory issues shaping the industry?
Parra: The president and Congress have made noise about reducing the regulatory burden on American corporations. Whether it comes to fruition remains to be seen. I think that would help encourage people to stay in the business and get in the business.
Certainly we have been hit very, very hard with a lot of regulations that really don’t enhance safety. I was giving a talk at the California Bus Association in October — I had three pages of notes on regulatory initiatives that came out just in 2016. It is insane.
It is discouraging those second- and third-generation owners. Granddad started the business right after World War II, then federal deregulation in 1983-84 opened up the doors for a lot of companies. Now the grandkids are saying, “I don’t know, do I want to put up with all this stuff?”
B&MC News: Where is the line between essential and unnecessary regulation?
Parra: The word “essential” is exactly right. For example, the lease-interchange rule, on the surface, was designed to prevent carriers that were put out of business from getting back into business. Rather than having us go through all the machinations that the rule requires, all they have to do is say, if you are going to subcontract work, make sure you are dealing with a carrier that has proper operating authority.
That is easy to check – we go to the FMCSA SAFER (Safety and Fitness Electronic Records) database and check to see if the company has insurance. The lease-interchange rule is not enhancing safety. It is not making sure the bad guys are off the road. That is a primary example of regulation that is not doing anything.
The irony is that it creates such a burdensome requirement on the part of a company that needs to subcontract buses. Instead of doing that, the company is going to say, “I’ll just get a broker to put it together because the broker doesn’t come under the FMCSA regulations and can hire whoever they want.” We know the problems brokers have created in our industry. This regulation empowers brokers, and the effect is the opposite of what FMCSA is trying to do.
It frustrates me when things like that occur. It tells me the regulators don’t understand the dynamics of our business. These are the kinds of things that we have got to get off the books — things that really don’t add value and don’t increase safety.
B&MC News: On the demand side, what is the outlook for bus and motorcoach travel?
Parra: Our industry has an extraordinarily bright future. First, the government doesn’t have the funding to make sure all transportation problems are solved by public-sector transit systems. They have to involve the private sector and our resources.
Number 2, there are only so many highways we can build. We are seeing cities getting bogged down by traffic. London and other cities are imposing outrageous fees for driving your car into the center city. They are encouraging people to take mass transportation into those center cities to alleviate traffic.
The challenge is, how do we help policymakers understand what is going to happen and the role that we must play in enhancing the mobility needs of this country and solving the transportation challenges that we have? There is no reason why the charter and tour guys can’t play that same role. You don’t have to be a scheduled service carrier to do contract work to support a transit system.
One of the proposals we have had in the highway bill has been to utilize private sector assets as cities spread out and there is the need for additional transit support to suburban and rural areas. Instead of spending taxpayer dollars to buy more equipment, contract that work out to us. That makes a lot of sense. It reduces the deficit and utilizes the private sector.
We are a forgotten part of the transportation world. It is trucks, transit and then us.
B&MC News: Do “mom-and-pop” operators have a future in the industry?
Parra: Absolutely. If, first, we can make it easier for new entrants to get operating authority instead of screening them like they are criminals and then denying operating authority. It has been ridiculous – something like 10 percent of the companies that apply get authority.
Second, if we reduce the regulatory burden. If those two things happen you will see a reintroduction of the American dream. Entrepreneurship is alive and well in this country. It is just not in our industry.
B&MC News: What role will Motorcoach Expo play in UMA’s future?
Parra: The exhibit floor in St. Louis was sold out in August. Our operator numbers are running ahead of last year. I am so thrilled.
We have done a lot to increase the value of Expo. We have enhanced the educational offerings to diversify the floor. We have all sorts of equipment — not just buses, other pieces, other solutions. Our industry has become much more multi-dimensional and our exhibit floor reflects that.
B&MC News: How is Bus & Motorcoach Academy serving member needs?
Parra: For younger people entering the business, learning online is something they are much more comfortable with. We are going to a new learning management system later this year. It is going to enable us to expand the offerings we have.
Now we have one track aimed at the ABCs of running a business, the Cornell School of Business; then we have another focused on driver training, the Prevost Prep Program. ABC Companies and Prevost are sponsors of those two projects, and we thank them for their terrific help. We have run a lot of people through the schools.
The new LMS system will make it easier for people to become more engaged and do the training on an as-needed basis, plus it will give us the chance to introduce timely topics, such as “How do you comply with the lease-interchange rule?” or “How do you choose an electronic logging device?”
B&MC News: How will carriers find the drivers they need to handle tomorrow’s business?
Parra: That is a real challenge. We are meeting it head-on. We have established the driver membership program to help them navigate better and network with their colleagues. We are doing a lot of specific driver training for them.
We have our first driver competition coming up at Expo. In addition to the online training we are going to do some behind-the-wheel training with a school in Richmond. We also will do the training at other facilities if you have a bunch of drivers or if companies want to get a group together.
As the national job situation improves — certainly we are not at full employment but are close to it — it makes it more difficult to recruit drivers. As unemployment rises people are looking at other options and considering us. We have the challenge of creating excitement about becoming a motorcoach driver.
This is a global problem. Drivers are aging out and there are not young drivers replacing them. I have challenged the manufacturers to think about it – why are people willing to fly an airplane for a regional carrier and make $20,000 a year, yet we can’t get them to drive a bus for $30,000? How do we recreate the cockpit to make it more exciting and inviting for someone to want to drive a bus?
Lifestyle issues are another challenge. Maybe we try to recruit the young, unmarried drivers for the over-the-road, over-night stuff and family people for the same-day work.
B&MC News: What role will UMA play down the road?
Parra: Our mission is helping the industry be successful and giving our members a competitive edge. I think we have done a pretty good job. We have seen companies diversify their services and pursue more education and training.
Our “20 Groups” program gives bus operators a better understanding of the nature of this business and of using financial metrics to identify problems and create opportunities for growth.
When I came on board the industry was stuck at a mature stage but didn’t realize the level of stagnation until 9/11 hit. That was a real wake-up call. It made us begin thinking that we have to diversify, we have to look at how we can utilize this half-million-dollar asset. What are other applications for this? Are there groups that should be using motorcoaches that we have not thought of?
B&MC News: What are you going to do after retiring?
Parra: I am thinking about a lot of options. I am not the type to care about the garden or play golf every day. I am a lousy golfer. I am too much of an A-type personality to sit back and do nothing.