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NYC Double-deck Tour Bus Decision


GTJ

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On February 8, 2011, the Surface Transportation Board handed down a decision on the joint application of Gray Line and City Sights to participate in a joint business arrangement. By denying the application, the STB may cause the fare on the popular double-deck "hop-on hop-off" bus tour to decrease.

 

Each of the two companies involved had competed with one another in this lucrative business. In early 2009 the companies joined together in a joint venture in order to increase efficiency and reduce costs. The companies did not follow the correct procedures--since STB approval was required in advance of embarking on this arrangement--and the application for approval was not made until the latter part of 2009.

 

In the course of making its decision, the STB found that the two companies increased their respective fares by 10 to 17 percent as part of the business arrangement. Furthere, the STB found that the joint venture would not provide any significant benefits for passengers, but rather the arrangement would benefit the bus companies and eliminate all effective competition.

 

The STB has now denied the application and has ordered the joint venture to be split-up. If the separation effectuates the STB's intent, the two companies will once again compete with each, possibly leading to lower fares, and perhaps other benefits of open competition. This is probably good news for New York City tourists, including those cruise passengers looking to spend a few days before or after their cruises to enjoy the sights of New York City.

 

The decision is available at http://www.stb.dot.gov/Decisions/ReadingRoom.nsf/WEBUNID/6B2A30654ACC120C852578320068118F?OpenDocument.

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