04/23/2012 06:33 pm ET Updated Apr 23, 2012

Chinatown Buses Target Of Plan To Rein In New York Discount Companies

Proposed legislation would regulate the cheap, intercity buses that lawmakers said have caused curbside bedlam in some areas of the city -- especially Chinatown -- over recent years, New York City lawmakers and officials announced Monday.

"This legislation is an important first step on the chaos that has reigned at the curbside and will allow us to better manage our streets," said Janette Sadik-Khan, the city's transportation commissioner.

If passed, the law would require curbside bus companies and the state Department of Transportation to agree when and where the companies could pick up passengers, in consultation with local community boards. Officials characterized the current system as a "free-for-all."

To keep costs down, curbside operators, like BoltBus, Megabus and Fung Wah, avoid bus stations that established industry players like Greyhound use in favor of city streets and sidewalks, a strategy that along with cheap fares can lead to double-parked buses and crowds of passengers.

"The legislation we are announcing today will bring order to that chaos by allowing the city of New York to regulate this industry," said New York State Assembly Speaker Sheldon Silver.

But at least one expert on the curbside bus industry -- the country's fastest-growing mode of transportation and also one of its most dangerous, according to the National Transportation Safety Board -- doubts it can be tamed. Even the legislation's proposed fines of up to $2,500 for repeatedly violating pick-up agreements may not be enough to deter less reputable companies.

A similar bill stalled in the state Senate last year, but Silver appeared confident that this year he could have the bill on Gov. Andrew Cuomo's desk by the end of the legislative session in June. He was joined at a press conference announcing the new compromise legislation by Sadik-Khan, city councilmember Margaret Chin, and state Sen. Daniel Squadron.

In March 2011, a bus returning to Chinatown from the Mohegan Sun Casino ran off Interstate 95 and killed 15 people. Another curbside bus accident that same month ended the lives of two Chinatown bus passengers on the New Jersey Turnpike.

"Today, Chinatown is a Wild West when it comes to these buses," said Squadron. "These fly-by-nights, these companies that change their name every two weeks, that have some serious safety problem and then dodge it until the next tragedy, it's going to be a whole lot harder than it was because of this intercity bus permit legislation."

But because the federal government has most of the authority over interstate buses, the state legislation will cover only where curbside carriers can pick up and drop off passengers -- not safety issues directly. At the federal level, Sen. Charles Schumer (D-N.Y.) has proposed forcing companies to display safety letter grades on buses.

Nicholas Klein, a Ph.D. student at Rutgers University who wrote a study on the buses in Urban Geography called “Everything but the Chicken: Cultural Authenticity Onboard the Chinatown Bus,” said regulators can only do so much.

Bigger bus companies like Megabus will be happy to comply if the state law is passed, he predicted. "These established companies want to protect their market share from smaller, less capitalized companies that may cut corners," said Klein.

Megabus spokesman George Lence said the company is careful in choosing its pick-up spots. "We always work closely with the city when selecting workable bus locations for our customers and will continue to do so under this legislation."

But less established buses operating "below the radar," Klein argued, will not be inclined to follow the rules. "Given that many state, local and federal regulators and planners do not even know about these services, I do not see how and why they would follow these regulations."

Klein said cities nationwide are grappling with similar problems as the industry grows. Despite or perhaps because of their sometimes spotty safety record, curbside bus companies have managed to drive down prices for intercity travel on the East Coast to sometimes eye-popping low figures: $12 for a trip between New York City and Philadelphia, or $20 for a trip to Washington, D.C.

"We're real glad there's a whole new low-cost bus industry. It's good for riders, it's good for commerce, it's good for the country," said Squadron.

Nevertheless, older bus companies like Greyhound and Peter Pan that pay for space in the city's Port Authority Bus Terminal are critical of the legislation.

Carolyn Daly, spokeswoman for the Coalition of Port Authority Carriers, said the city lets curbside operators like Megabus off with a $275 per vehicle permit while Greyhound pays more than $2 million a year to use space inside Port Authority. Megabus currently parks its coaches on the street just outside the terminal. Daly said the company should be forced inside.

Using Port Authority, she said, "has kept bus transportation efficient and from clogging our streets ... We just don't understand why they would give Megabus a free ride."

The coalition is currently appealing its loss in a lawsuit that seeks to force Megabus to use Port Authority. Unless Megabus is forced into Port Authority, Daly said, other bus companies could be forced onto the streets to compete. "We are considering all of our options."