Standing tall is tough in era of over-regulation

My most recent DOT physical was a nightmare. I knew I was old, fat, deaf and nearsighted, but finding out I am 5’7” tall was traumatic.

Holy moly. All my life I’ve been 5’9”. Where did those two inches go?

The coach industry is undergoing a similar experience. The size of the national fleet is shrinking, with small and mid-sized operators disappearing from the scene. Since those (often family-owned) businesses are the mainstay of the used bus market, it’s in disarray.

There’s no single reason we are shrinking, but over-regulation belongs near the top of any list of probable causes.

“Regulatory Capture” happens when the industry being regulated influences officials into helping to hamstring or eliminate competition. Large companies have the economies of scale to survive regulatory overreach, while understanding that it crushes smaller competitors. It also can help protect them from litigation (Gee whiz…We were in compliance with all governmental yada-yada).

Fung Wah became a punch line in our industry, so here’s a question: How many people did they kill or seriously injure?

None. The only fatality I could find related to Fung Wah happened when a stopped bus was clobbered by a dump truck. A lady was struck by a lamppost and died of a heart attack. There were some visible accidents with minor injuries, and Fung Wah certainly did a poor job of complying with regulations, but in terms of actual damage, they seem to have been as safe as their competitors (all of whom have had fatalities).

What really seems to have happened, and this belief was strongly held by Fung Wah’s loyal and vocal customers, is that they upset the semi-monopolistic hold the GBB’s (Great Big Buslines) had on the Boston/NYC route. The GBBs appear to have goaded regulators, journalists and politicians into a chain of events that forced Fung Wah out of business.

Gee, up until the first visible accident, their rating was satisfactory. If they were as bad as subsequent reviews indicated, why wasn’t it caught before? Were any regulators/inspectors disciplined for missing obvious signs?

So far manufacturers appear to have sat on the sidelines. Building in government mandated safety technology adds cost to coaches that are already pricey. Who’s going to argue with “safety”?

Historically, operators could only economically justify the price of new equipment by depending on its extraordinarily long lifecycle, as reflected by high residual values.

Two forces are at work here. The more sophisticated you make a coach, the more expensive it is to maintain as it ages, and as GBBs use regulation to squish small bus lines, the market for used coaches shrinks (along with resale value).

Both of these symptoms of over-regulation will, over time, erode opportunities for both builders and eventually the GBBs (their old buses gotta go somewhere, and there’s no overseas market for used North American coaches).

We’re a bit like the chase scene in A View to a Kill where James Bond hijacks a taxi and roars through Paris losing chunks of the cab’s body until he screeches to a halt. All that remains is the driver’s seat and front end.

As we shrink, we force more people into cars. The ones who aren’t squished produce more pollution.

I’ll never be 5’9” again, but with some long-term thinking by industry folks and regulators, the bus business could regain its former stature.

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