The compounded costs of federal mandates from 2000 – 2010 and the estimated implementation costs of MAP-21 will increase the purchase price of a motorcoach by as much as 60%. The unprecedented increase in capital costs not only damages companies, ends jobs and impacts local tourism markets it also increases the age of the fleet and slows the integration of safety technology into operations.
Over the last 10 years federal mandates that include four Environmental Protection Agency (EPA) engine mandates and the American’s with Disabilities Act (ADA) accessibility requirements have increased the average purchase price of a new motorcoach from an estimated $340,000 in the year 2000 to nearly $500,000 in 2010. The enactment of MAP-21 will result in a new round of rulemakings stemming from the Federal Motor Carrier Safety Administration (FMCSA) and the National Highway Traffic Safety Administration (NHTSA) which are estimated to add an additional $40,000 - $60,000 to the purchase price of a new vehicle.
While similar ADA requirements have been imposed on publicly funded transit systems they have enjoyed granting and funding programs that cover 100 percent of the compliance costs associated with the purchase of equipment and training. We also anticipate that new safety mandates prescribed in MAP-21 from the Federal Transit Administration (FTA) impacting publicly funded modes will be fully subsidized by additional federal support.
The motorcoach industry has borne the increased costs of federal mandates with little support from the federal government. However as mandated costs rise, margins are forced lower which decreases capitalization of new vehicles. As an example in 1999 the industry sold 3,200 new motorcoaches compared to 2012 in which 1,500 were sold. This in turn slows the adoption of new safety technology and design. In effect the congressional goal of safer vehicles is compromised by the actions of multiple federal agencies working from separate mandates. In addition our industry competes with heavily subsidized modes in the form of Amtrak, public transportation and domestic air carriers. The net result is that our industry is shrinking through closure and consolidation while our fleet is aging.
The motorcoach industry needs capital assistance to offset compounding and ongoing federal mandates. Pathways to achieve this could be through the implementation of investment tax credits and granting programs aimed to support small business. Ultimately, such investment could have multiple economic and safety benefits including:
- Faster incorporation of new safety technology into the fleet
- Encouraging capital investment in the nation’s motorcoach industry
- Promoting the expansion, improvement and affordability of motorcoach service to both rural and underserved areas of the United States
- Supporting job creation, local tourism economies and economic growth.