Jeff Green | Oct 01, 2009
Back to HomeFeature Article - October 1, 2009 Independent bus companies get organizedBy Jeff Green
Small bus companies serving Eastern Ontario school boards think they can see the future by looking at other jurisdictions, and they don't see themselves in that future.
The Ontario Ministry of Education has been promoting a request for proposal (RFP) system for allocating bus routes, and small and regional carriers think this will put them out of business in favour of one of three multi-national bus companies.
The plan, which replaces a system whereby each year, school boards establish a fixed price and fixed safety regulations for all their contractors, large and small, would lead to an auctioning off of all routes to the lowest bidder, according to the Independent School Bus Operators’ Association which sprung up in the early spring of this year.
Shawn Payne, a co-owner of Martin's bus lines, is the president of the new association. He recently made a presentation to Education Minister Kathleen Wynne that included numerous examples from jurisdictions in Ontario, the United States and beyond, in which the RFP system has led to the concentration of busing services in the hands of Stock Transportation, which is owned by National Express Group of the United Kingdom; First Student, a subsidiary of Stage Coach – a Scottish company; or Student Transportation Canada, a subsidiary of Student Transportation of the United States.
Martin's, which is one of the larger operators in Eastern Ontario with 69 buses, compared to companies with one to 10 buses, is tiny when compared to the three large carriers. First Student, for example, operates 60,000 buses in the US and Canada.
“For those companies, the competitive bidding process works. If they lose a contract, they can move their buses somewhere else, but the small independents are mostly based in their own communities. If they lose a contract, they are out of business,” Shawn Payne said.
There was talk that the RFP process would come to our region this year, but in the end the Tri-Board transportation system was left out of a pilot project that went to bus services nearer to Toronto. Tri-Board Transportation serves the Limestone Board, the Algonquin and Lakeshore Catholic School Board, and the Hastings Prince Edward District School Board.
“In the pilot areas, which were limited to 25% of the routes, only two of nine small companies kept their routes,” said Shawn Payne.
In his presentation, Payne told the minister that the school boards already have a pretty good deal in regards to transportation. “The boards have developed contract language about safety standards that we all have to abide by, which is a good thing, and they have developed a benchmark financial formula which determines what the costs will be. We say, there you go - how much better can you get?”
For some of the smallest operators, the RFP could not only lead to a loss of income and employment, it could cause serious financial hardship. “For small operators who are planning to retire and sell their buses, they might find no buyers available; and for younger operators who have or are planning to buy another operator out, a lot of money is spent on the bus, on the understanding that the bus line will be available with the bus. Without that, they will have no way of paying off the bus or buses they are buying. I don't think the government wants to put rural businesses under, but that is what this will do.”
There is a moratorium on the new RFP process until January of 2010 while the province studies the results of the pilot projects, but Payne said there would still be plenty of time for boards to set out RFPs for the fall 2010 school opening.
At the meeting with Kathleen Wynne, the operators received a good hearing, but, said Payne, “She seemed unchanged in her position that the RFP system would be a good thing.”
Any cost savings that might occur under the new system would be short-lived, according to Payne, because in the end there would be fewer operators in the business and they would be able to dictate the price.
“ As the operator pool shrinks through the competitive bid process, competition decreases and eventually a monopoly of the industry ensues – creating significantly higher costs,” Payne told Minister Wynne.
But more than a cost issue, Payne said that the intangibles, such as knowledge of local roads and families, will be lost if independent operators are replaced by large corporate bus companies.
The Independent School Bus Operators Association is mounting a public relations campaign this fall, including a mass petition, aimed at maintaining the current school bus system in Ontario. The petition is currently being circulated at local businesses.