Struggling private bus companies are abandoning commuter service. Can NJ Transit step in?

The decision by the owners of A&C Bus Company to close shop and end service next month on four Jersey City bus routes marks the end of several eras.

One is the 96-year history of the bus company, which has been passed down to three generations of the Checchia family. The other is that of the profit-making commuter bus company — A&C was one of few still in operation in the country, let alone New Jersey.

A&C’s decision to end its bus service for the West Side of Jersey City after nearly a century follows similar moves by other New Jersey motorcoach businesses, including 153-year-old DeCamp’s decision to end commuter service in Essex County, Coach’s decision to end Newark service to the Oranges and Elizabeth, and TransDev's move to end its contract with NJ Transit to serve the seven-route Monmouth County service.

Coach and TransDev are both large, international transportation companies with more profitable charter and interstate aspects to their businesses; DeCamp is a small, six-generation family-owned company, but also has charter service to keep its business alive.

But for A&C, this is the end of the company.

Jack Callahan, whose wife and sister-in-law took over the business in 2005 from their father, said at its peak A&C operated about 30 buses.

The company “employed almost 50 individuals, all people from the community, Jersey City, men and women of every color, and ran a very difficult business, a very challenging business, ran it for all these years and COVID hit and changed the dynamics of everything,” Callahan said, adding that only 60% of riders have returned compared to pre-pandemic numbers.

Story continues after photo gallery

"What had been a longstanding, proud tradition of a family business, a family business that had survived all these years through all different hardships — this was untenable," he said.

'Devastating impact'

The question now is what should happen to those bus routes and how — or whether — the residents who rely on them will be served.

William O’Dea, a Hudson County commissioner, urged NJ Transit to come up with an interim and long-term plan, including taking over A&C’s routes.

“I have grave concerns over the proposed termination of those lines and the effect it will have on both senior citizens and low-income communities,” O’Dea said, who added that he took the Montgomery West Side bus to school as a student. “The devastating impact upon those vulnerable populations is something that cannot be tolerated.”

Tanisha Garner, a bus rider who lives in the Ironbound, said she is concerned about people who rely on those Newark buses to get to the mall for work, the VA hospital, or to get to school.

"What is the school system going to do about the children that utilize those buses to go to school," said Garner, who raised these issues at a NJ Transit board meeting in July and emailed a board member the next day but said she never heard back.

In the case of DeCamp, which ended its commuter bus services in April, NJ Transit stepped in and modified some of its existing routes to cover some of DeCamp’s stops.

But to continue absorbing additional routes, NJ Transit needs dedicated funding for these broader initiatives to bring back service, said Talia Crawford, an advocate with the Tri-State Transportation Campaign.

NJ Transit President and CEO Kevin Corbett told reporters after a recent board meeting that agency officials are examining the A&C and Coach routes to see how many people are riding, what their service is like and how many stops they serve to see if it’s possible to step in.

In Monmouth, the agency is working with Transdev to see if NJ Transit can lease their bus garage and hire their drivers as the agency takes over the routes in the interim.

“It’s going to cost money,” Corbett said. “I don’t have the budget right now. The governor, the Legislature, our board is aware of that so we’ll stretch as far as we can, but at some point we need resources.”

A case of déjà vu?

The decision by private companies to stop providing commuter bus service is reminiscent of the mid-20^th century when bus and rail businesses started going bankrupt. That spurred the creation of NJ Transit in 1979, the launch of its bus operations in 1981 and its rail services in 1983.

Many of NJ Transit’s current routes were former trolley lines that became bus lines.

Philip Plotch, the principal researcher at the Eno Center for Transportation and a Fair Lawn resident, said what’s happening now with the private bus operations is not so much a case of “history repeating itself,” but “more of it’s just a trend that hasn’t stopped over the past 100 years.”

More:Three decades later, the Hudson-Bergen Light Rail line still has no Bergen spur. How come?

More:As fierce competition grows, NJ school districts grapple to find qualified bus drivers

“Since cars got popularized, private transit has become less and less financially feasible for any private company,” Plotch said. “People wouldn’t use (public transportation) to just go to work, so you’d take a trolley line to a sports game or a cemetery, to school, to your friends’ house — you’d be using it all the time in all sorts of directions but once it just became used for commuter services it became a lot less popular … losing the ability to make money.”

The advent of public transportation agencies largely took shape in the 1960s and 1970s, including NJ Transit, which began offering public transportation at subsidized rates in the 1980s.

At the same time, the Reagan administration wanted to see more competitors in the public transportation market, thinking they could provide the service more efficiently and cheaper. Therefore, NJ Transit gave grants and subsidies to private bus companies to run commuter bus routes, which created a working but oft-strained relationship between the public agency that was both competitor and business partner to the private bus companies.

A&C, Coach, DeCamp and other private bus operators all received buses from NJ Transit for an annual lease of $1 or a similar nominal fee, and the private companies could keep the fares they earned, but they had to cover all other costs, including labor, maintenance, fuel and personal injury insurance, which NJ Transit doesn't have to have.

In exchange, NJ Transit could report the private bus companies’ passenger service miles to the federal government for annual financial aid disbursements for the agency’s use. The bus companies’ routes — and the fares they could charge — were controlled by the Motor Vehicles Commission.

COVID pandemic seriously cut into volume

The relationship between the private bus carriers and NJ Transit was often strained, but it worked for several decades, though bus companies have slowly dropped off over the years as the costs of doing business increased and competition for the same riders, in some cases, got stiffer.

Jonathan DeCamp’s family, whose motor coach business dates back to 1870 when stagecoaches were used, has weathered all kinds of commuter disruptions over more than a century, including the Spanish Flu pandemic of 1918, the terror attacks on 9/11 and Superstorm Sandy.

But with the COVID pandemic, “the major difference there was technology,” DeCamp said. “We’ve gotten really good at not having to go to the office to conduct our business.”

By the time DeCamp ended its commuter bus service in April, only about 20% of the 7,000 or so daily passengers had returned to using the service.

“The commuter business really relies on the volume — you need a bus to be able to make multiple trips with 80% occupancy to make the business model work,” DeCamp said. “Those mid-day trips we knew were going to be light but you would have enough volume in the a.m. rush hour, p.m. rush hour to offset the costs midday.”

Coach’s routes in Newark that are ending Oct. 8 had a similar story, with only 50% of ridership returning after the pandemic, according to Dan Rodriguez, vice president of public affairs.

“If we had other revenue streams, we could facilitate some kind of cushion but that doesn’t exist in this new world,” Rodriguez said. “Ridership is still significantly down for all of us.”

Callahan, of A&C, said multiple issues and costs made continuing their service impossible.

“It’s a compounding of lack of fare increases, lack of subsidies on top of ridership really put us in a bind,” Callahan said.

Not enough aid

Three federal COVID aid packages sent billions of dollars to support the transportation sector, with $69 billion in federal aid going to public transportation agencies and $62 billion to airlines. NJ Transit received $4.4 billion in federal relief grants.

Even with that aid, many agencies are facing large fiscal operating deficits. NJ Transit expects a $1 billion deficit in 2026, as ridership still lags behind pre-pandemic numbers.

More:NJ Transit's 'most outstanding' award surprises some frustrated riders, despite successes

More:'This is the start': Contracts approved for first phases of Gateway tunnel project

Private bus companies, however, did not receive the same level of federal COVID relief aid that the transit and airline industries got. They had to rely on the PPP loan program or CERTS grant program that divvied up $2 billion to more than 1,400 small businesses.

Carol Katz, whose firm lobbies on behalf of and represents the Bus Association of New Jersey, urged NJ Transit back in 2020 to share some of its aid with the private bus companies because their passenger miles generated a portion of the money the agency received. A NJ Transit spokeswoman at the time said the private carriers were not eligible to receive federal funds, though a statement from the FTA disputed that.

'No indication of a rainbow'

New Jersey’s Economic Development Authority board approved a $25.6 million COVID relief program in February 2022 that made grants available for private bus carriers in the state, but for some companies it wasn’t enough — or came too late.

DeCamp said if more aid was provided it could have bought them more time for ridership to return.

“I don’t expect it to ever return to 100% of what it was, but if it returned to 75% of what it was, we would have been fine,” DeCamp said. “We needed the funds to weather the storm until that ridership returned and unfortunately the state and federal government wasn’t able to provide that.”

That left these companies to make the difficult decision to end service, what DeCamp called “gut-wrenching.”

Callahan said it was “painful” for A&C.

“The independents can’t afford to lose money, it would be one thing if maybe short term, let’s see if we can lose some money and get to a rainbow, but there’s no indication of a rainbow out there,” Callahan said. “When you add up all the increased costs and the lack of any kind of subsidies it really, really became painful.”

Reimagining bus service

The issue of lagging commuter markets is not unique to New Jersey, said Joseph Schwieterman, a professor at DePaul University and director of the Chaddick Institute for Metropolitan Development.

“The commuter market is by far the worst performing of the bus industries,” Schwieterman said. “Just about everything else has bounced back to at least 70% to 80% of pre-pandemic, but not the case with commuting.”

Schwieterman said a “large scale strategic realignment is needed” because “the old approach to scheduling won’t cut it anymore.”

NJ Transit is undergoing three bus network realignments in Newark, Hudson County and South Jersey to examine how to adjust service for the most in-demand markets, an exercise that coincides with discussions about where the agency may need to make cuts as it faces fiscal deficits.

There are signs that the agency’s takeover of some routes could be a net plus. Last year, NJ Transit took over the Nos. 10 and 119 instead of outsourcing through a private contract carrier agreement. By adding more buses to these popular routes, ridership has exploded beyond pre-pandemic levels.

Jersey City Mayor Steve Fulop said NJ Transit should be getting out of doing business with private bus carriers and taking over these routes, including the ones A&C will no longer be servicing.

“It would work better because NJ Transit coming into the bus routes and understanding that they’re not trying to make money out of it and their priority is moving people, as opposed to making money, will basically translate into a better system that is more reliable than what you have today,” said Fulop, who is running for governor and made transit reforms like this a part of his platform.

Asked whether Jersey City should have considered subsidizing A&C, similar to the way it subsidized the Via rideshare service, Fulop said no because it’s not sustainable to have municipalities stepping in to offset the costs of public transportation. Via is a microtransit shuttle service that can be summoned on-demand from a phone app and costs no more than $5 to transport riders to transit centers or short trips.

“We subsidized Via because Via was going into transit deserts, so there was no transportation infrastructure whatsoever in that area of the city that we would have Via operate in,” he said.

NJ Transit has begun to wade into rideshare app partnerships with a pilot program for Access Link users, the service the agency provides for seniors or those with disabilities. Th program has become popular, with more than 3,000 customers opting in since it launched in May.

Schwieterman said there is a lot of opportunity for transit agencies to rethink how they provide service in more creative and innovative ways. He cited the new branded Virginia Breeze bus system that is doing well to connect rural Virginia with the D.C. area and the on-demand microtransit service that launched in rural Virginia that serves aging residents or those without access to a car.

Branded systems that are marketed and invested in with reliable service are having success, he said.

“What we’re seeing is bus lines in which the states put some investment in, creating a coherent network — that’s seen as something more than public transit — does really well,” Schwieterman said.