Week 3: The Gang Goes Bankrupt

Welcome back! If there’s a single thing I’ve learned through this process, it’s how to read better. It’s been another long week of reading, so without further ado, let’s finish filling in our metaphorical timeline of Greyhound’s history onwards from the 1990s.

My focus on literature was more so directed at the industry as a whole this week. It’s important to see how government involvement at this point kept lines running and shaped the entire sector into what it is today. 5311(f) funds, as a reminder, are the federal government’s method of providing grant funds to private operators running rural intercity bus services. That might seem like a mouthful, but it’s a pretty simple system.

5311(f), through its predecessor 18(i), date back to the 1991 Intermodal Surface Transportation Efficiency Act (introduced, by the way, by San Jose native Norm Mineta!). They work by shipping every state a lump sum of cash every year, and having 15% of this cash be apportioned towards intercity bus programs. This manifests itself in many different ways; in states like Oregon, Colorado, and Ohio, funds go to private operators under state mandates to run expansive statewide intercity networks. Other states use a “Request for Proposal” (RFP) system to give money to private operators who wish to run rural routes, while some just simply don’t have 5311(f) programs.

This program has some strange caveats, though. 5311(f) funds can only go towards private operators, and can only cover up to half of the operating deficit on a given route, leading private operators to be less interested in running these routes and state governments being less willing to fund them. Truly public transit — where drivers are hired and paid by a government body — also can’t happen through this framework, and state funding is usually difficult to acquire, and is often inconsistent.

Where, then, do we go from this?

Well, first, let’s look at the bus industry itself. One seismic shift in recent decades within the industry is the introduction of curbside buses. In a curbside model, bus operators pick people up and drop them off at signs on the side of the street instead of stopping in a traditional large terminal, like a train would. It has led to the subsequent selloff of many older Greyhound city center terminals, like the recent suspension of service to the beautiful streamline moderne Cleveland terminal (below — Wikimedia).

This shift is, as always, complicated. For the operator, it’s a more dynamic business model, allowing for companies to easily shift service to the whims of supply and demand than before. But for the passenger, a great deal of comfort is lost on the ride. Making transfers on brutal, long-distance trips is a stressful experience, and the lack of a physical terminal to accommodate that transfer makes a difficult situation worse.

5311(f) covers bus terminal grants as well as running service. It’s a lot of needs crammed into a lump sum in the very low tens of millions for most states, and often falls short of a truly world-class system. Curbside buses are the future way to save money and make a modern bus network, but come at a steep price for the passenger. Intercity buses, going into this decade, are in a weird moment. The next few weeks will be focused around the modern state of intercity buses, and what this industry might look like decades down the line.