The Rebirth of the American City and the Future of Intercity Bus Service

Two kinds of people wait in the Port Authority Bus Terminal near Times Square. Some are waiting for buses. Others are waiting for death.

--McCandlish Phillips, New York Times (18 May 1970)

As is my custom on long weekends, I took a bus (this time, Greyhound’s YO! Bus) from New York City to Boston (en route to Essex County). YO! Bus, which serves the Boston-NYC-Philadelphia market, is one of many players in a curbside bus industry that has proliferated in recent years, as “Chinatown” bus operators and international competitors (like the UK’s Megabus) have entered a market previously dominated by Greyhound/Peter Pan.

This growth, which emerged in the late 1990s after decades of declining ridership, corresponded with the rebirth of American cities—not just in the Northeast Corridor, but across the country. That rise continues unabated, with Inter-city bus travel growing by 7.1% in 2011, compared with 1.5% for air and 1.16% for rail, according to DePaul University.

Many cities, including Boston, require bus operators to use indoor terminals. However, New York City’s main terminal, the Port Authority Bus Terminal (PABT) at 42^nd Street and 8^th Avenue—the world’s busiest (225,000 passengers daily)—has no openings, thanks in part to pitiful trans-Hudson train service, which leads the PABT to be the destination for commuter buses from New Jersey. As a result, operators have sought and received approval for pick-up and drop-off sites throughout Manhattan, Brooklyn, and Queens.

This has led to significant community opposition, with neighborhoods fearful of the effects of pickups and dropoffs late into the night—from idling buses and crowded sidewalks, to noisy travelers and reduced parking. Not only does the curbside model have negative effects on communities, it also is less desirable for travelers, who are forced to brave the elements and who would—all things equal—prefer greater multi-modal access near the city core.

In NYC, the solution to this problem is well known—replacement/expansion of the PABT. However, while the Port Authority recently announced an 18-month study of possible expansion, the 2014-2023 capital plan does not include funding for such a project. At a time in which the Port’s balance sheet is saddled with billions in cost-overruns related to the rebuilding of the World Trade Center and the WTC-PATH terminal, where would such funding come from?

One obvious answer would be from the valuable air rights the Port owns atop its Times Square terminal. A plan in 2008 valued these rights and the rents that could be secured in connection with those rights, to be worth about $500 million. Since that time, the price of air rights in the Midtown area has risen further, especially for residential construction, providing a source of private capital that will help reduce the burden on tolls at Port crossings.

Regardless of the funding mechanism, one thing seems certain—the intercity bus market and the demand for space in Midtown Manhattan isn’t gong away anytime soon. With low barriers to entry (in NYC, permits are issued for three years at a cost that varies based on the number of weekly trips made), the market is ripe for more disruption by smaller players. That very prospect has led the American Bus Association, a trade group representing large operators, to call for more regulation of the industry. While all buses should meet basic safety standards, erecting further barriers to protect the position of the larger players is inappropriate and should be resisted by city and state leaders who must recognize the importance of intercity links to economic growth.

Indeed, while low-cost, environmentally-friendly bus service has been revived by the rise of America’s cities, buses also add fuel to that rise—linking campuses and job corridors to create economic growth opportunities at the regional level. Cities and transit agencies like the Port Authority must do their part to embrace this development by investing in bus terminals—which improve modal connectivity and reduce the burden of curbside pickups on communities—and can, if well-designed, become a destination in their own right.