How the Pandemic is Affecting Limo, Bus and Touring Companies

COVID-19 limo, bus, and transportation industry | DOT Compliance Services | CNS Insurance

The coronavirus pandemic has hit all of us hard in the last 6 months and your plans for 2020 has likely changed at some point this year.

Most of us have reorganized our lives and routines to fit the “Less physical interaction in small, enclosed spaces” mantra of Pandemic Wellness.  

Routines like riding a bus to work or your kids catching the bus to school have been squandered, but it is even worse for the public transit and passenger carrier industries that serve us.  

Most of these companies are facing hardships and pivoting to survive but there could be hope to keep the overall public transportation sector afloat into and through 2021.

Here is a snapshot of how each industry is weathering the economic shift.

How the pandemic is affecting truckers and the transportation industry.

Limousine Industry:

Since the COVID-19 pandemic began, many limousine companies decided to park their fleet in storage facilities where they sat for months.

Nearly 80% of the average limousine business comes from weddings, prom season, and graduations. Those markets disappeared in 2020 with fears that holiday and new year’s business will disappear as well.

We can help with Passenger Carrier Insurance, learn more.

While most fleets idle, companies still face vehicle licensing fees and other operational costs, even with little to no revenue coming in for months.

Many limousine fleets are worried that if vehicle licensing fees are not waived, they will have to close their companies permanently.

But as the economy slowly opens back up, limousine fleets are starting to do a lot more weddings and other group events.

While limousine companies are trying to open safely, there is hope for 2021.

Luxury Limousine Industry

For luxury limousine companies, like KLS Worldwide Chauffeured Services in Los Angeles, important annual events are going online, hitting fleets hard.

For KLS, the Emmy Awards is one of the most lucrative days of the year with 300 to 450 vehicles on the road bringing in as much as $1.6 million transporting A-list actors, powerful network executives and their staff. This year, only about a dozen limousines are on the road.

With most film studios and TV productions shut down since March, KLS is seeing their studio contracts disappear as well. At the beginning of the year, the company was bringing in more than $2 million in sales monthly; today it is only 10% of those sales monthly.

After laying off many long-term employees, KLS is finding ways to adapt. Chauffeurs have started picking up clothing from luxury retailers and bringing it to clients to try on. They also started driving surgeons to and from the hospital when they must operate.

With the format of this year’s Grammys and Oscars still uncertain, KLS worries about what comes next.

Another limousine company is being hit with golf’s Masters week being closed to patrons. This company usually sees about 100-200 clients, which makes up 50% of their annual income.

Bus Transportation Industry:

Between 80% to 95% of motorcoach trips were canceled due to the pandemic, according to the American Bus Association. This accounts to a loss of more than $11 billion since the pandemic hit in March and could shutter 40% of small, family-owned transportation businesses by the end of this year.

“Presently, Coach USA is running between 15-20% as compared to last year,” said Sean Hughes in early September, director of corporate affairs for Coach USA and Megabus.

Hemphill Brothers Coach Company in Nashville normally transports 1,000 people per night, but by June nearly all the company’s 150 drivers have been furloughed, with two or three drivers remaining on call. According to the company’s co-owner Joe Hemphill, the company is running on just 5% of its normal revenue, and the business has lost $10 million since mid-March.

However, many private bus companies, like Greyhound, have resumed operations this summer with new health and safety guidelines in place, although not likely to exceed 50% capacity due to social distancing.

Along with Plexiglass barriers separating the staff at the wheel from the public, some bus lines are implementing contact-free boarding where passengers can look up their boarding pass by providing their name, practice social distancing measures in buses and lines, and mandatory face coverings.

Crews are also disinfecting buses after each trip, paying special attention to high-touch surfaces such as door buttons, handrails, armrests, windowsills, tray tables, and seatbelt latches.

But even as bus transportation reopens, many of these companies are running on limited capacity, and consumers are hesitant to use public transportation as there is fear for a second wave in the Fall.

Now some trade leaders and lawmakers say they hope that will soon change with Congress considering a bailout for them. The Coronavirus Economic Relief for Transportation Services (CERTS) Act was introduced in July and would provide $10 billion in emergency relief funding in the form of grants to the industry. However, this has stalled in Congress alongside the second coronavirus relief package in debate.

Public Bus Transportation

In Bridgeport, Connecticut, the Greater Bridgeport Transit’s buses had maximum daily ridership fall from 17,000 to 5,000 during the first few months of the pandemic.

With Connecticut’s stay-at-home orders gradually lifted during the summer, ridership demand has steadily increased to about 10,000 customers a day.

In September—six months later—the state’s largest municipality and surrounding towns are planning to see return to pre-pandemic service levels after trimming low ridership routes.

If it wasn’t for federal COVID-related aid they received, the company would have “been sunk”.

Touring and Taxi Companies:

Six months after the beginning of the pandemic, dozens of New York City yellow taxi drivers shut down Manhattan-bound traffic on the Brooklyn Bridge in a desperate call for relief.

With tourism all but gone, many Manhattan offices still nearly empty, and competition from Uber, Lyft and other ride-hailing apps, yellow taxis handled 92% fewer rides in June than in June 2019.

According to data from the Taxi and Limousine Commission, the pandemic hurt demand so much that 82% of the city’s 13,500 yellow taxi medallions, which give cabs the exclusive right to street hails in the city, weren’t even on the road in July.

Many of these taxi drivers will not be able to survive in the years to come unless the city pushes through a debt refinancing program, which NYC Mayor De Blasio spokesman Mitch Schwarz said that’s unlikely to happen without help from the federal government.

School Bus Industry:

School bus companies have had to park their fleets since March and as the pandemic worsened, and schools remained shuttered, many school administrators say they could not pay buses to remain idle if students stay home.

Many school bus fleets lost summer school and summer camp revenue with the start of the fall school year starting online.

Privately owned bus companies account for about 40% of the school bus industry and these bus companies worry about getting any income at all in 2020.

Schools that are returning to fully in-person instruction or a hybrid model are projected to have increased cleaning costs and operational overhead expenses to ensure students remain socially distanced.

Since the pandemic began, nearly every mode of public transportation in the United States has been financially crippled by reduced ridership and declining revenue. To prevent collapse, Congress earmarked $50 billion for airlines, $25 billion for public transit and $1 billion for Amtrak.

But privately operated buses were largely left out of the relief. The remaining 60% of school buses are owned and operated by school districts.

Federal lawmakers gave school districts $13.5 billion in aid to weather the pandemic, but lawmakers left it up to district administrators to decide whether to pay their private contractors, including school buses.

In April, nearly 100 members of Congress sent a letter to House and Senate leadership asking them to correct the “grave oversight” of leaving the American bus industry out of the $2 trillion coronavirus aid package passed in March.

In July, a bipartisan group of senators introduced the Coronavirus Economic Relief for Transportation Services Act, which would provide $10 billion in emergency grants to school bus and motor coach companies.

However, there has been no movement on the bill since.


Do you have an Insurance Submission Packet? (upload any relevant information about vehicles, drivers, etc.)

Get your Quick Quote Started Now!

Our Commercial Insurance Specialists are ready to help you!

Do you have an Insurance Submission Packet? (upload any relevant information about vehicles, drivers, etc.)

Related news