Competitor cries foul over taxpayer-funded busesWith free Wi-Fi, satellite radio, movies, plush seating and extra legroom, a Jefferson Lines Rocket Rider bus is one of the more comfortable ways to ride from Duluth to the Twin Cities.
With free Wi-Fi, satellite radio, movies, plush seating and extra legroom, a Jefferson Lines Rocket Rider bus is one of the more comfortable ways to ride from Duluth to the Twin Cities.
It’s also a ride made possible through federal stimulus money.
Jefferson Lines received $2.65 million from the American Recovery and Reinvestment Act to buy five of the eight Rocket Riders in service; the new buses have been running for the past three months.
That angers Dave Clark, owner of Skyline Shuttle, which provides transportation from Duluth to the Twin Cities. Clark claims it’s unfair for Jefferson Lines to use government money to compete with his business and cut into his revenue.
“When there’s a market and they are competitors, it should be left to the market without government interference,” Clark said. “They could have taken the risk themselves, but they relied on the taxpayer to take the risk.”
Clark said he also believes the federal money has allowed Jefferson Lines to charge lower prices than Skyline. Skyline’s one-way fare to the Twin Cities is $34.50, while Jefferson Lines charges $29, according to the company website.
“The only reason they can offer that is that Jefferson is heavily subsidized,” Clark said.
Not true, responded Charles Zelle, president and CEO of Jefferson Lines, who said that if his company had to use its own money to purchase the buses, the fares would still be the same.
“Government grants are not subsidizing our fares,” Zelle said. “Our prices relate to a much broader network of routes and pricing system.”
The $2.65 million Jefferson Lines received was part of an $8.8 million stimulus grant approved last July and allocated by the Minnesota Department of Transportation to buy nearly 60 buses for inter-city transportation services throughout the state, according to the award statement at Recovery.gov. Much of the other money was awarded to
government-operated bus services.
Tom Gottfried, section director for MnDOT’s transit program, which oversees the allocation of stimulus transportation money, could not be reached for comment.
Though Greyhound also offers daily Duluth-to-Minneapolis service, none of its buses were purchased using federal stimulus money. The company has used several million in stimulus dollars, however, to buy buses for other routes across the country.
Using stimulus money to add the higher-grade buses to the Jefferson Lines fleet was an appropriate use of the money, Zelle argued, because Jefferson doesn’t directly compete with Skyline.
Unlike Skyline, Zelle said, traveling from Duluth to Minneapolis on Jefferson allows a rider to use other Jefferson buses to connect to other cities such as Chicago, Des Moines or Fargo.
“We can connect people to as many as 4,000 points around North America,” he said.
Jefferson travels from Duluth to the Cities three to four times a day and leaves from UMD, downtown and the airport.
But airport travelers are the same clientele that Skyline tries to reach, said Clark.
“We’re in the same business transporting people from Duluth to the Twin Cities,” he said.
And since the Rocket Riders have been introduced, Clark said he’s seen a drop in business and people calling the company to see if Skyline can match Jefferson Lines’ prices.
“Charging what they do wouldn’t be sustainable,” he said.
Clark said he doesn’t want to apply for stimulus money or any other government money to compete with Jefferson, but he’s not sure what to do. He has a meeting planned with MnDOT to ask the agency to “level the playing field,” he said.
“We’re definitely a for-profit business,” Clark said. “If we lose enough passengers, we won’t be able to continue. I’m optimistic that doesn’t happen.”