Ministry’s tender process could lead to closure of local bus companies

Joyce Marshall says competitive bidding for student transportation might save cash now, but it may mean an inferior level of service and could spell the end for small, independent bus companies.

“In five years there will be three multi-nationals who will  charge whatever they want,” said Marshall, part owner and operations manager of Denny Bus Lines Ltd.

“And it’s the personal touch that will be lost.”

As of September, the Ospringe company, which was started in 1959 by Marshall’s parents, Clarence and Vera Denny, will lose 10 of its 41 bus routes as a result of a Ministry of Education pilot project.

Wellington-Dufferin Student Transportation Services, which is in charge of school buses for Wellington County, was one of three Ontario consortiums selected to participate in the pilot project, which saw 25% of the local consortium’s 439 bus routes put up for competitive bids in January.

In all, 105 routes went to tender, with Denny’s losing all 10 of its pilot routes. Brenmar Transit, of Harriston, lost all eight of its pilot routes, Cook Bus Lines in Mount Forest lost three of four routes, and Epoch’s Garage in Kenilworth lost both of its routes, though it gained one previously held by Brenmar.

Meanwhile, Student Transportation of Canada Inc., a subsidiary of a U.S.-based company which operates locally under the name Elliott Coach Lines, came out of the pilot project with a net gain of 37 routes, for a total of 167 within the consortium.

And Stock Transportation, another multinational firm, had a net gain of 25 routes in this year’s bidding, for a total of 61 within the consortium. In total, 103 of the 105 routes that went to tender went to those two multi-national corporations.

Brenmar president Doug Sargent wonders how handing so many routes to companies “running by remote control” from outside Canada achieves the “level playing field” the ministry was seeking.

Sargent said he understands the need for the ministry to get the most value for its money, but, “The fact is they were already getting that.”

But Greg Seguin, general manager of Wellington-Dufferin Student Transporta-tion Services, said the initial round of tenders will realize an annual savings of $661,000. He noted the new contract is for five years, with an option of three extensions at one year a piece.

Seguin said the savings will be used to offset recent deficits and also to shorten the consortium’s walking distance for students, which is currently among the most stringent in the province.

“Truly, this is what it’s all about – it’s about improving things for students,” he said.

Yet local operators – like Rod Cook, owner of Cook Bus Lines – doubt much will improve.

“I don’t think they’ll find the savings at the end of the day,” Cook said. “It’s definitely going to cost more in the long run … And it’s the service that will suffer.”

Sargent noted his company often provides extra services to local seniors’ groups at a discounted rate – or sometimes at no charge at all. And Marshall cited two recent examples where parents asked that their children be bused to locations other than their regular homes due to an emergency, and Denny’s staff was more than willing to meet the request.

“That’s not going to happen with the multi-nationals; they don’t even know who the kids are,” Marshall said.

But a letter from Angus McKay, president of Elliott Coach Lines, suggests that is not the case at all.

“We retain our local com­pany identity and many of our drivers have taken Wellington County children to school for years,” McKay said, noting the company has been operating in this area since 1947, long before being purchased by Student Transportation of Canada Inc.

He added Elliott Coach Lines pur­chases its fuel from local com­panies and buys vehicles, parts, tires, and insurance from Canadian companies as well.

Marshall disagreed with some of McKay’s assertions, though she did acknowledge seven of the 10 Denny’s drivers have expressed interest in leaving to drive with Elliot Coach Lines. Sargent also said all of the affected drivers at Brenmar are likely going to work for the companies that won the eight Brenmar pilot routes.

But regardless, Marshall feels the ministry’s new competitive bidding process may spell the end for family-owned companies like Denny’s.

“In all three pilots the small to middle-sized operators lost,” she said.

Denny’s has not only lost revenue from its 10 routes, but is also left with 10 empty buses and is forced to try and recoup the loss with increased chartered trips, which may be difficult given the economic outlook.

To make matters worse, the company might lose the rest of its 31 routes come January, when the remaining 75% of the consortium’s routes are likely to go through the public bid process.

“We’ll be forced to gamble 75% of our business on a guess,” she said. “We’re going to try our darnedest to stay in [business].”

Brenmar will have 27 routes go to tender in January, Cook Bus Lines will have 15 up for grabs and Epoch’s Garage will have seven. And other small companies unaffected by the first RFP – including Cherrey Bus Lines, of Drayton (two routes) – could also lose their routes next year.

However, Seguin, for one, does not believe the tender process will lead to the inevitable collapse of independent operators.

“I personally have confidence in our smaller operators and their ability to compete,” Seguin said, noting the smaller operators provide a fantastic level of service and expertise.

“Our goal is to ensure we have competitive practices in place … there is a place for the small operators.”

He also said there will likely be a cap on the amount of routes each operator can hold within the consortium.

Erin councillors were among those upset at the prospect of local businesses like Denny’s losing bus routes.

“I’m a little perturbed our tax dollars are going to an American company,” said councillor Josie Wintersinger last week. “I’d like some answers.”

The rest of council agreed it may not be the smartest decision to consider only price when the safety of children is at stake. Council directed staff to write a letter to school board officials requesting more information.

But according to Seguin, 65% of the request for proposals concentrated on “technical” requirements.

“It isn’t just about the dollars,” he said, adding companies were also required to complete information regarding student safety, driver training, garage facilities and their ability to sustain drivers.