WEBVTT - This Is Why the Nation Is Facing a School Bus Driver Shortage 0:00:10.920 --> 0:00:14.840 Hello, and welcome to another episode of the Odd Lots podcast. 0:00:14.880 --> 0:00:19.320 I'm Joe Wasn't All and I'm Tracy Alloway. So Tracy, Obviously, 0:00:19.560 --> 0:00:23.400 everyone knows about the so called labor shortage this year, 0:00:23.480 --> 0:00:25.960 like we've we've talked about it many times on the show, 0:00:26.400 --> 0:00:30.520 but numerous employers up and down different industries have all 0:00:30.600 --> 0:00:33.760 talked about the difficulty they've had in hiring or at 0:00:33.800 --> 0:00:36.879 least hiring at the same levels and wage points as 0:00:36.920 --> 0:00:40.479 they had a pre pandemic. Yeah, truly, it's been a 0:00:40.560 --> 0:00:44.159 year of shortages or I guess maybe maybe scarcity is 0:00:44.200 --> 0:00:46.080 a better way of putting it, both in terms of 0:00:46.120 --> 0:00:48.760 like the supply chain, which we've spoken a lot about, 0:00:49.120 --> 0:00:50.960 but also in terms of labor market. So a lot 0:00:51.000 --> 0:00:54.800 of employers saying that they can't find the right employees, 0:00:55.040 --> 0:00:57.760 or if they find the right employees, then they don't 0:00:58.000 --> 0:01:00.880 turn up to actually work, or they're all quitting on 0:01:01.040 --> 0:01:02.920 mass to do something else. I have a lot of 0:01:02.960 --> 0:01:06.160 questions about what else is that other people are actually 0:01:06.240 --> 0:01:08.560 leaving to do. But that seems to be you know, 0:01:09.000 --> 0:01:11.360 the anecdotes that we keep hearing over and over from 0:01:11.400 --> 0:01:15.400 the labor market, right, And it's important to note anecdotes 0:01:15.480 --> 0:01:19.480 from the employer's side. Obviously the anecdotes from the labor 0:01:19.520 --> 0:01:23.399 side might look different. One area that from what I understand, 0:01:23.480 --> 0:01:26.119 is have uh and we'll get drilled down into specifics, 0:01:26.120 --> 0:01:29.039 but public sector employment has been tough, and I think 0:01:29.040 --> 0:01:32.120 a lot of governments to particularly areas where people have 0:01:32.319 --> 0:01:35.560 pensions that they can retire to and so forth. You know, 0:01:35.640 --> 0:01:39.039 for a long time post grade financial crisis, the public 0:01:39.040 --> 0:01:41.520 sector cut a lot of jobs. But my understanding right 0:01:41.560 --> 0:01:44.160 now is it's the opposite where the public sector by 0:01:44.160 --> 0:01:46.959 and large is having a really hard time recruiting, and 0:01:47.000 --> 0:01:50.040 of course public sector is more limited budget flexibility and 0:01:50.080 --> 0:01:53.600 so forth then businesses are. But that's a whole area 0:01:53.800 --> 0:01:56.120 or sub component of the labor market shortage that we 0:01:56.120 --> 0:01:59.560 haven't really talked about. Yeah, it's kind of an interesting 0:01:59.560 --> 0:02:02.120 one because is you know, for years, if you worked 0:02:02.160 --> 0:02:04.920 in the public sector, it was considered a very safe 0:02:05.000 --> 0:02:08.520 and stable and to some extent, desirable job. And I 0:02:08.560 --> 0:02:10.959 have to say I'm kind of speaking slightly from experience 0:02:10.960 --> 0:02:13.880 here because I just realized my mother worked in the 0:02:13.919 --> 0:02:18.519 public sector for Austria and she just took early retirement 0:02:18.800 --> 0:02:20.800 last year. I think there's one of the people that 0:02:20.840 --> 0:02:23.920 basically like threw her hands up and said, it's not 0:02:24.000 --> 0:02:27.160 worth it anymore. I'm just going to retire early and 0:02:27.440 --> 0:02:31.280 avoid all this pandemic related stress and um, you know, 0:02:31.480 --> 0:02:34.680 take my retirement benefits and and go live my life. 0:02:34.680 --> 0:02:37.680 So yeah, Now, of course, when it comes to government, 0:02:37.720 --> 0:02:40.960 their varying degrees to which the public actually interfaces with 0:02:41.000 --> 0:02:43.720 the government. But there's no question that for a lot 0:02:43.760 --> 0:02:46.720 of parents, particularly including myself, over the last two years, 0:02:46.960 --> 0:02:50.720 one of the big issues has been schools and getting 0:02:50.720 --> 0:02:52.839 to school, and that is sort of for people, for 0:02:53.040 --> 0:02:55.040 parents who have children kind of one of the key 0:02:55.080 --> 0:02:58.720 ways that they interact with public institutions. And so whether 0:02:58.760 --> 0:03:02.600 those are functioning, whether AHM staffing, whether they can get 0:03:02.600 --> 0:03:04.799 the kids to school h H is to what we're 0:03:04.800 --> 0:03:08.239 talking about. That is a huge way in which these 0:03:08.240 --> 0:03:12.320 shortages can or again these mismatches perhaps are this scarcity. 0:03:12.440 --> 0:03:14.519 I keep using shortages even though I really think that's 0:03:14.560 --> 0:03:17.280 like sort of employers and framing ends up being a 0:03:17.320 --> 0:03:20.320 real issue for the for the general public. Yeah. So, 0:03:20.360 --> 0:03:23.480 the only thing I know about this is basically from 0:03:23.480 --> 0:03:28.440 your tweets, But there is apparently there is apparently a 0:03:28.480 --> 0:03:32.680 shortage of school bus drivers, and as you just pointed out, 0:03:32.720 --> 0:03:36.800 I mean, this is particularly a sensitive issue for parents. 0:03:36.880 --> 0:03:40.160 And you know, we talk about inflation being painful for 0:03:40.240 --> 0:03:43.480 people who feel like they're no longer able to feed 0:03:43.480 --> 0:03:45.480 their families or it's going to cost them a lot 0:03:45.520 --> 0:03:48.000 more than it used to. And I feel like you're right, 0:03:48.240 --> 0:03:51.440 this is probably one area where the labor shortage would 0:03:51.480 --> 0:03:56.200 actually be particularly felt by parents. And the question I 0:03:56.240 --> 0:04:00.880 have is whether or not this is an idiosyncratic development, 0:04:00.960 --> 0:04:05.240 because maybe there are individual things around the school bus 0:04:05.320 --> 0:04:08.720 driver market that make it more difficult to hire the 0:04:08.840 --> 0:04:12.160 right people, or whether this is a reflection of that 0:04:12.200 --> 0:04:15.680 broader trend that you were just describing of people really, 0:04:16.040 --> 0:04:18.719 you know, the great resignation that we keep hearing so 0:04:18.800 --> 0:04:21.720 much about and people just deciding that they don't want 0:04:21.760 --> 0:04:24.880 to drive school buses for a living anymore. Well, I'm 0:04:24.880 --> 0:04:26.800 really excited. We're going to dive right into it. Before 0:04:26.800 --> 0:04:28.919 I do, I just want to say my daughter, she 0:04:29.000 --> 0:04:30.839 goes to school very close to our house, as she 0:04:30.839 --> 0:04:32.840 could walk, but she did go to summer camp on 0:04:32.880 --> 0:04:35.479 Staten Island uh the summer, so she did have to 0:04:35.480 --> 0:04:37.400 take a school bus for the first time. So this 0:04:37.440 --> 0:04:40.039 is an important topic for me, and we have the 0:04:40.440 --> 0:04:43.479 perfect guest to discuss it. We're gonna be speaking with 0:04:43.640 --> 0:04:46.880 Corey Muirhead. He's the executive vice president at Logan Bus 0:04:46.880 --> 0:04:50.040 Company and Affiliates. It's the largest New York City public 0:04:50.040 --> 0:04:53.760 school UH bus contractor in the area, has two thousand 0:04:53.839 --> 0:04:56.440 buses in New York City plus another five on Long Island, 0:04:56.600 --> 0:04:59.000 and up until very recently, he was the president of 0:04:59.000 --> 0:05:02.839 the New York School Bus Contractors Association. So we have 0:05:02.920 --> 0:05:05.000 the perfect guest to talk about what is going on 0:05:05.520 --> 0:05:08.440 with school bus drivers. Corey, thank you for coming on 0:05:08.440 --> 0:05:11.000 outlots Hey, Joe and Tacy, thank you very much for 0:05:11.040 --> 0:05:14.280 having me. So obviously we're going to talk about the 0:05:15.320 --> 0:05:18.440 claims that there's a school bus shortage or a driver shortage, 0:05:18.480 --> 0:05:20.800 to be more specifically. But before we do, and before 0:05:20.800 --> 0:05:23.640 we get into current conditions, why do you give us 0:05:23.680 --> 0:05:28.600 like a brief overview of what a what pre pandemic 0:05:28.760 --> 0:05:31.560 normal look like in terms of how the market works 0:05:31.600 --> 0:05:34.919 and how many drivers you employed and how much they're paid, 0:05:34.920 --> 0:05:37.360 and just sort of like just what what normal looked 0:05:37.400 --> 0:05:41.200 like pre pandemic. So, pre pandemic people were coming through 0:05:41.200 --> 0:05:44.760 the door and they wanted to be hired. One of 0:05:44.760 --> 0:05:48.560 the things that we see now post pandemic that was 0:05:48.600 --> 0:05:51.320 still very prevalent pre pandemic, and one of the big 0:05:51.360 --> 0:05:53.760 things that we're pushing as an industry is no matter 0:05:53.839 --> 0:05:57.159 what time frame it was, it's always extremely difficult to 0:05:57.200 --> 0:05:59.599 become a school bus driver. It's one of the most 0:05:59.640 --> 0:06:03.839 heavily regulated industries and it is a regulatory marathon. But 0:06:04.000 --> 0:06:06.720 for good reason, right you want to put on the 0:06:06.760 --> 0:06:12.400 most professional, expert people drivers that are transporting kids. You know, 0:06:12.440 --> 0:06:17.000 we're transporting the most precious cargo. So for obvious and 0:06:17.120 --> 0:06:20.680 for safe reasons, you need to have those regulatory hurdles 0:06:20.800 --> 0:06:23.000 in order to put the best and brightest on the road. 0:06:23.200 --> 0:06:26.280 So be that as it may. Back before the pandemic, 0:06:26.320 --> 0:06:28.880 people were coming through the door, but there was certainly 0:06:28.920 --> 0:06:32.680 a little bit of a a stagnant, a stagnation happening there. 0:06:32.920 --> 0:06:35.520 And you know, was it wages? Was it because the 0:06:35.640 --> 0:06:39.599 drivers were only getting six hours per pay. A lot 0:06:39.640 --> 0:06:43.480 of the companies outside of New York City don't offer pensions, 0:06:43.880 --> 0:06:46.600 and they don't they offer four one ks or the benefits. 0:06:46.800 --> 0:06:48.400 You know. One of the things that you see there's 0:06:48.400 --> 0:06:52.479 a dichotomy between New York City and the surrounding areas 0:06:52.480 --> 0:06:55.440 of Westchester, Long Island, et cetera. Because New York City 0:06:55.480 --> 0:06:59.440 offers family benefits, full time, forty hour paying jobs with pension, 0:06:59.720 --> 0:07:02.200 and a mound in Westchester do not. So you certainly, 0:07:02.360 --> 0:07:05.680 you certainly saw some people leaving the industry because with 0:07:05.720 --> 0:07:08.839 everything going on, people were coming into this industry. The 0:07:08.880 --> 0:07:11.640 pay may have not been as good as other industries, 0:07:11.720 --> 0:07:14.000 but they were coming because of one the stability of 0:07:14.000 --> 0:07:16.840 a pension and two because of the family health benefits 0:07:16.840 --> 0:07:19.880 that you were able to receive. Now, another big thing 0:07:20.000 --> 0:07:21.760 about the city and Long Island, and this is what 0:07:21.800 --> 0:07:24.560 we're all kind of getting together and racking our brains about, 0:07:24.840 --> 0:07:27.400 is you have a job is like despite being the 0:07:27.480 --> 0:07:29.440 length of a school year, like a teacher, when the 0:07:29.440 --> 0:07:31.960 teachers are obviously that are paid than school bus drivers. 0:07:32.080 --> 0:07:35.360 School bus drivers are paid basically forty weeks out of 0:07:35.360 --> 0:07:38.160 fifty two weeks of the year. So if you're looking 0:07:38.160 --> 0:07:41.520 for a full time job, that's extremely difficult to not 0:07:41.680 --> 0:07:44.640 be paid for three months out of a twelve month year. 0:07:44.840 --> 0:07:47.400 So we started to really see people exit the industry 0:07:47.400 --> 0:07:51.000 there as well. A lot of times this industry was 0:07:51.040 --> 0:07:56.600 flooded with retirees because of just the flexibility of the hours, 0:07:56.640 --> 0:07:59.720 the shortness of the routes, certain things that you were 0:07:59.760 --> 0:08:02.160 able to do that it was you know a lot 0:08:02.240 --> 0:08:06.120 of retirees in the NYPD, f D and Y sanitation 0:08:06.280 --> 0:08:09.400 other second jobs that people would retire forty fifty and 0:08:09.440 --> 0:08:11.560 then come and drive a school bus because it only 0:08:11.600 --> 0:08:13.680 took a couple of hours a day for them. That 0:08:13.760 --> 0:08:16.560 was all great and well pre pandemic. Now we'll get 0:08:16.560 --> 0:08:20.360 into why post pandemic that is just completely non existent. 0:08:20.600 --> 0:08:22.800 But that was the flexibility we had where we had 0:08:22.840 --> 0:08:25.360 the full time people in the part time people. So 0:08:25.440 --> 0:08:27.280 can I just press you on this point because I 0:08:27.280 --> 0:08:29.680 think it will inform the rest of our discussion. But 0:08:29.720 --> 0:08:32.120 can you give us, like, you know, if you were 0:08:32.160 --> 0:08:35.440 trying to sell someone on becoming a school bus driver, 0:08:36.080 --> 0:08:39.360 what would be the big selling points that you would 0:08:39.360 --> 0:08:41.600 give them, What is the attraction about the job, and 0:08:41.640 --> 0:08:45.160 historically what kind of people I realized you just mentioned retirees, 0:08:45.200 --> 0:08:47.800 but what kind of people would have been most interested 0:08:47.920 --> 0:08:52.400 in becoming drivers? The people that would be most interested 0:08:52.440 --> 0:08:56.920 in becoming drivers are community members. Flex time flexibility, right, 0:08:56.960 --> 0:08:59.680 So you have people that maybe haven't been in an industry, 0:08:59.679 --> 0:09:03.120 are are new to entering uh the job workforce, and 0:09:03.160 --> 0:09:05.360 they say, hey, what can I do that's something around 0:09:05.440 --> 0:09:07.439 the block or that gives me the flexibility if I 0:09:07.520 --> 0:09:09.880 have children, I five, if I have other things to do. 0:09:10.120 --> 0:09:12.000 So the reason why a lot of people became school 0:09:12.040 --> 0:09:14.440 bus drivers because you got your job done early in 0:09:14.440 --> 0:09:16.800 the morning, you have the flexibility to do some of 0:09:16.800 --> 0:09:18.200 the things in the middle of the day what you 0:09:18.200 --> 0:09:20.440 needed to do, and then you did the afternoon route 0:09:20.720 --> 0:09:22.240 and you got to do whatever you need to do 0:09:22.280 --> 0:09:25.800 at night. As well as being a part of your community, 0:09:26.000 --> 0:09:28.600 you were around your neighborhood. Many of these school buses, 0:09:28.679 --> 0:09:33.000 school bus companies facilities are in heavily densely populated neighborhoods, 0:09:33.120 --> 0:09:35.520 so a lot of people work walked to work. There's 0:09:35.920 --> 0:09:39.000 very seldom do I have many drivers that are driving 0:09:39.000 --> 0:09:42.480 to the facilities. So that was another big, big sticking point. 0:09:42.720 --> 0:09:46.760 Now once again probably the largest thing, and it with 0:09:46.880 --> 0:09:52.000 certain companies was the stability of the industry pre pandemic. 0:09:52.640 --> 0:09:55.760 Our industry is recession proof, but it's not pandemic proof. 0:09:55.920 --> 0:09:58.240 So what we saw during the Great Financial Crisis back 0:09:58.240 --> 0:10:00.560 in o eight oh nine we saw we had so 0:10:00.640 --> 0:10:03.400 many people applying for jobs that there had to be 0:10:03.480 --> 0:10:07.719 layoffs and waiting lists. That has completely gone done A 0:10:07.760 --> 0:10:09.960 one eight. So it's very interesting to see in this 0:10:10.080 --> 0:10:12.200 life cycle, you know, from two thousand and eight to 0:10:12.200 --> 0:10:15.880 two one it's uh, it's the complete opposite. But like 0:10:15.920 --> 0:10:18.400 I said, you had people lining down the block because 0:10:18.400 --> 0:10:20.240 you were able to do and and as you know, 0:10:20.280 --> 0:10:22.400 as we get into it there, as you continue to 0:10:22.559 --> 0:10:26.800 escalate through your years of longevity and tenure, you get 0:10:26.840 --> 0:10:30.280 paid more. But because of that flexibility, some people do 0:10:30.360 --> 0:10:34.000 have second jobs. And when the financial crisis happened, that's 0:10:34.000 --> 0:10:36.400 what we saw. A lot of people were retirees or 0:10:36.440 --> 0:10:39.040 people from you know, the finance sector. We're saying, you 0:10:39.040 --> 0:10:42.240 know what, I need a job. They are hiring, school 0:10:42.280 --> 0:10:45.240 buses aren't going away. I can do this job in 0:10:45.280 --> 0:10:47.200 the morning, in the afternoon, and then I could do 0:10:47.240 --> 0:10:48.599 what I need to do in the middle of the 0:10:48.679 --> 0:10:51.160 day and at night as well. So that was the 0:10:51.240 --> 0:10:55.199 attractiveness of the industry pre pandemic. You know, it's interesting 0:10:55.200 --> 0:10:59.400 you mentioned regulation, and we have high barriers to entry 0:10:59.400 --> 0:11:02.440 into space for a very good reason because you know, 0:11:02.520 --> 0:11:05.840 it's children and it's the same with daycare and childcare. 0:11:06.480 --> 0:11:10.040 But there's also this tension in childcare and daycare where 0:11:09.840 --> 0:11:13.439 the very the regulation of childcare facilities is extremely high, 0:11:13.480 --> 0:11:16.160 but a lot of the people who are in childcare itself, 0:11:16.240 --> 0:11:20.040 particularly teachers, aren't paid particularly well. Can you just give 0:11:20.080 --> 0:11:21.600 it a little more clarity out of sort of like 0:11:21.840 --> 0:11:25.320 what school bus driver pay grades looked like a normal time. 0:11:25.960 --> 0:11:28.480 So we'll talk about the greater New York area, and 0:11:28.720 --> 0:11:31.800 for New York City, it's forty hours paid pay per week, 0:11:32.320 --> 0:11:35.599 and there's an average between twenty and twenty two dollars 0:11:35.640 --> 0:11:39.359 per hour. When you get outside to Long Island in Westchester, 0:11:39.720 --> 0:11:42.360 that average dips down to about eighteen dollars an hour. 0:11:42.600 --> 0:11:46.200 There are certain different you know, companies offer different packages. 0:11:46.440 --> 0:11:49.080 If you don't take benefits, then you can be offered 0:11:49.120 --> 0:11:51.319 a package as high as twenty five dollars an hour, 0:11:51.720 --> 0:11:54.360 but then you start to tail that you cut back 0:11:54.480 --> 0:11:57.040 on the number of hours that you're paid. So many 0:11:57.080 --> 0:11:59.920 times in Westchester, along Island and even upstate, you'll start 0:12:00.000 --> 0:12:02.640 to see a five hour guarantee or a six hour guarantee. 0:12:02.760 --> 0:12:04.880 And that's really the problem with our industry right now 0:12:04.880 --> 0:12:06.880 that really needs to be addressed is if you want 0:12:06.920 --> 0:12:08.760 to attract people, this has to be more of a 0:12:08.760 --> 0:12:11.240 full time job. That's something that the industry has really 0:12:11.640 --> 0:12:14.839 it's really shined a light on what's going on right 0:12:14.840 --> 0:12:17.400 now that no longer do people just want the twenty 0:12:17.400 --> 0:12:19.600 five dollars an hour for five hours a day. You 0:12:19.640 --> 0:12:21.760 need to give them a full day's paid work. The 0:12:21.840 --> 0:12:25.600 retire re section. That's kind of where that that marriage 0:12:25.679 --> 0:12:28.720 came from, because these retirees only wanted to work part 0:12:28.760 --> 0:12:31.840 time or quote unquote part time, and that's non existent 0:12:31.880 --> 0:12:34.360 as I said before, So you know, it runs the 0:12:34.400 --> 0:12:37.600 gamut between eighteen dollars and twenty two dollars. There's different 0:12:37.600 --> 0:12:39.719 types of school buses that we can get into a 0:12:39.760 --> 0:12:42.120 little bit longer of why other people aren't coming into 0:12:42.120 --> 0:12:44.839 this industry. As you mentioned before the Great Retirement. There's 0:12:44.880 --> 0:12:49.960 type A, which is minivans. These minivans transport special needs 0:12:50.120 --> 0:12:52.920 education children. And then there's type C, which is your 0:12:52.920 --> 0:12:55.280 conventional big school bus that you guys see on the 0:12:55.360 --> 0:12:58.600 road quite often and that transports the general education children. 0:12:59.440 --> 0:13:03.679 Could you may describe how the contracting system works in 0:13:04.000 --> 0:13:06.920 New York because I think not a lot of people 0:13:06.920 --> 0:13:09.240 will necessarily be familiar with it. But you know, if 0:13:09.320 --> 0:13:13.240 a district needs school bus drivers, how do they actually 0:13:13.280 --> 0:13:17.800 go about acquiring those or um, you know, striking a 0:13:17.880 --> 0:13:21.880 deal with a company that can provide them. So there's 0:13:21.960 --> 0:13:25.440 two different ways that this industry operates. There's the public 0:13:25.440 --> 0:13:29.800 sector and the private sector. So let's go micro to macro. 0:13:30.080 --> 0:13:33.600 New York City is a hundred percent privately contracted. New 0:13:33.679 --> 0:13:40.080 York State is sixty privately contracted. The nationwide is forty 0:13:40.160 --> 0:13:44.320 private contract privately contracted. So the majority of the majority 0:13:44.360 --> 0:13:47.440 of the nation is publicly contracted, but New York State 0:13:47.600 --> 0:13:51.360 is majority privately contracted. How you get a private contract 0:13:51.480 --> 0:13:54.000 or a public contract, so it works two ways. It's 0:13:54.040 --> 0:13:56.840 an RFP or an RFB, and RFP is a request 0:13:56.880 --> 0:13:59.480 for proposal and an RFB is a request for bid. 0:13:59.640 --> 0:14:01.599 The DIP prince between the two is very simple. And 0:14:01.800 --> 0:14:05.760 RFP has a select criteria of about ten agenda items 0:14:05.800 --> 0:14:09.120 that you have to master and you get scored based 0:14:09.120 --> 0:14:14.200 on that criteria. So it's safety, operational history, insurance, age 0:14:14.200 --> 0:14:18.240 of vehicle driver abstracts. It's it's a it's a select 0:14:18.280 --> 0:14:21.240 criteria so that you are you are the most fit 0:14:21.840 --> 0:14:25.240 and professional operation and obviously prices, of course one of 0:14:25.280 --> 0:14:29.320 the bigger ones. But there's there's a myriad of different 0:14:29.360 --> 0:14:32.560 things that you need to score the highest on to 0:14:32.640 --> 0:14:35.400 be selected as that vendor. And you are selected by 0:14:35.440 --> 0:14:37.680 a panel of about three people within the school district 0:14:37.800 --> 0:14:41.800 or the municipality, and they look at your entire proposal 0:14:41.880 --> 0:14:44.960 and they say, we deem this operator the most fit 0:14:45.280 --> 0:14:48.840 operationally financially, and we would like to go ahead with them. 0:14:48.880 --> 0:14:50.640 On the opposite side of that is what's called a 0:14:50.680 --> 0:14:53.320 request forbid. A request for bid is very simple. It 0:14:53.400 --> 0:14:56.960 is the lowest responsible bidder. So if you bid the 0:14:56.960 --> 0:14:59.880 lowest number, so long as that district of municipality goes 0:15:00.040 --> 0:15:02.720 in there and they say, okay, they have the facilities, 0:15:02.760 --> 0:15:05.360 they have the buses, they have the drivers there will 0:15:05.400 --> 0:15:08.720 go with them. It's very simple. A lot of the districts, 0:15:08.920 --> 0:15:12.520 the majority of the districts opt for an RFP because 0:15:12.520 --> 0:15:15.520 of all of the extra things that you have to 0:15:15.520 --> 0:15:18.520 put in there. Right, you know, you want a safe, reliable, 0:15:18.600 --> 0:15:21.360 good company, You want newer buses on the road. So 0:15:21.400 --> 0:15:23.360 a lot of people in their RFPs they'll put in 0:15:23.560 --> 0:15:27.520 we're gonna promise to purchase forty brand new vehicles you know, 0:15:27.560 --> 0:15:30.040 if you do an RFB, you don't have to put 0:15:30.040 --> 0:15:32.520 in the age of your fleet. Now, if you're a 0:15:32.560 --> 0:15:36.240 school district, then you don't want to have fifteen year 0:15:36.280 --> 0:15:39.520 old buses, dirty diesel buses for every single bus on 0:15:39.560 --> 0:15:41.800 the road. No, when you look at that, and as 0:15:42.160 --> 0:15:44.760 when you're a board of education or superintendent and you're 0:15:44.760 --> 0:15:46.840 looking at these rfp s and RFPs, you have a 0:15:46.840 --> 0:15:50.520 fiduciary responsibility to put the safest, most reliable, and also 0:15:50.760 --> 0:15:54.880 environmentally friendly vehicles on the road. So many oftentimes they 0:15:54.880 --> 0:16:13.600 opt for an RFP rather than an RFPA. So let 0:16:13.600 --> 0:16:16.560 me ask you another question. You as a Logan bus company, 0:16:16.640 --> 0:16:20.240 your company largest NYC contractor, you have two thousand bus 0:16:20.240 --> 0:16:23.480 and NYC how do what is the market share of 0:16:23.560 --> 0:16:26.200 your of those two thousand buses in New York City? 0:16:26.480 --> 0:16:29.760 And how do market share decisions work? How can they 0:16:29.920 --> 0:16:33.280 change over time? To what degree do you compete with 0:16:33.440 --> 0:16:36.920 other operate fleet operators within that our New York City 0:16:37.200 --> 0:16:42.160 school bus contractors? So there's very little competition outside of 0:16:42.200 --> 0:16:45.160 the two bids that went on in two thousand thirteen 0:16:45.200 --> 0:16:47.560 and two thousand fourteen as far as market share, where 0:16:47.560 --> 0:16:51.000 about twenty two to fluctuating on how many routes are 0:16:51.160 --> 0:16:55.400 created each year. And how it works is you you 0:16:55.440 --> 0:16:57.480 get you pick your routes at the beginning of each year, 0:16:57.520 --> 0:17:00.440 the d o E and OPT have to route each child, 0:17:00.520 --> 0:17:02.640 and you know, you have a certain of what's called 0:17:02.680 --> 0:17:06.400 restoration rights and you get restored your contract routes. But overall, 0:17:06.440 --> 0:17:08.880 with including pre K, there's about ten thousands school bus 0:17:08.960 --> 0:17:11.280 routes in New York City and we operate two thousand. 0:17:11.560 --> 0:17:15.720 So just you know, for easy context of the market. Now, 0:17:15.760 --> 0:17:18.320 as far as competition and how we grow and and 0:17:18.320 --> 0:17:21.040 and you know what, how we scale or things like that, 0:17:21.400 --> 0:17:25.360 this is an extremely difficult job. It's an extremely difficult industry, 0:17:25.359 --> 0:17:28.720 I should say job. Excuse me, uh, it's extremely extremely 0:17:28.800 --> 0:17:32.400 capital intensive. And a few of the things that are 0:17:32.680 --> 0:17:36.280 i'd call threats to the industry in terms of businesses 0:17:36.320 --> 0:17:40.000 staying in business are the cost of vehicles, the cost 0:17:40.040 --> 0:17:43.679 of real estate, and the cost of insurance. Obviously, because 0:17:43.720 --> 0:17:47.879 we are school buses transporting children, we have very high 0:17:47.960 --> 0:17:51.920 levels of insurance, and with high levels of insurance come 0:17:52.280 --> 0:17:57.320 high levels of litigation. So many school bus companies have 0:17:57.560 --> 0:18:00.640 gone out of business or they have was up shop 0:18:00.760 --> 0:18:04.480 because they could not afford to pay for these expenses. 0:18:04.920 --> 0:18:08.920 Vehicles are six figures. You know, brand new type C 0:18:09.200 --> 0:18:12.040 school bus costs about anywhere from a hundred to a 0:18:12.160 --> 0:18:15.880 hundred and twenty grand, depending on which original equipment manufacturer 0:18:16.200 --> 0:18:19.040 you're coming with. And then, of course the other thing 0:18:19.160 --> 0:18:22.919 being who can pay the most for the same pool 0:18:23.040 --> 0:18:26.159 of people. We all operate in the five boroughs of 0:18:26.160 --> 0:18:28.600 New York City, and some of us have the same 0:18:28.720 --> 0:18:32.280 collective bargaining agreement with unions. Some of us have other unions. 0:18:32.320 --> 0:18:35.639 But when you are all operating in the same space 0:18:35.720 --> 0:18:38.119 and you're fighting for the same person, you have to 0:18:38.160 --> 0:18:40.760 get very creative and crafty on what you're willing to 0:18:40.800 --> 0:18:43.520 offer these people. So a lot of the smaller companies, 0:18:43.760 --> 0:18:45.560 you know, if I were to go and offer an 0:18:45.600 --> 0:18:48.840 extra five days paid off on top of the New 0:18:48.920 --> 0:18:52.800 York City five page leave a smaller company that operates 0:18:52.800 --> 0:18:55.600 a hundred or two hundred busses, it's gonna be very 0:18:55.680 --> 0:18:59.440 difficult for them to offer an additional five paid days 0:18:59.480 --> 0:19:02.480 off for a hundred people. That's going to really really 0:19:02.520 --> 0:19:07.080 handstring their operations. So that's where we see a lot 0:19:07.160 --> 0:19:11.040 of companies fold and consolidation of the industry out, whether 0:19:11.119 --> 0:19:15.640 it be acquisition or for the most part, it's just 0:19:15.960 --> 0:19:19.760 it's companies throwing in the towel and then the Department 0:19:19.800 --> 0:19:24.600 of Education distributing the work to the vendors. So this 0:19:24.680 --> 0:19:27.040 is something that I wanted to ask you based on 0:19:27.080 --> 0:19:30.520 your previous description of how the contracting process actually works. 0:19:30.560 --> 0:19:33.000 But if you're a school bus company, how do you 0:19:33.040 --> 0:19:38.000 actually make money in this business while providing a sort 0:19:38.040 --> 0:19:43.960 of economic rate to the people who are buying your services? 0:19:44.040 --> 0:19:47.600 Because I imagine the ceiling on running a school bus 0:19:47.640 --> 0:19:51.040 operation could in theory be almost limitless. You know, you 0:19:51.040 --> 0:19:55.320 could have totally brand new school buses because everyone would 0:19:55.359 --> 0:19:58.679 love to have their kids driven in a brand new vehicle. 0:19:59.160 --> 0:20:03.000 You could have the us possible school bus drivers, people 0:20:03.000 --> 0:20:05.600 with years and years of experience, because obviously parents would 0:20:05.640 --> 0:20:08.640 feel more comfortable with that. It feels like the cost 0:20:08.760 --> 0:20:13.760 could rapidly spiral out of control. But clearly people are 0:20:13.800 --> 0:20:16.679 in this industry. You have lots of companies competing for 0:20:16.760 --> 0:20:19.359 these contracts, So how are they actually making money and 0:20:19.520 --> 0:20:22.720 how do they sort of balance safety with the need 0:20:22.840 --> 0:20:26.960 for profit. So that's a great question, and it's it's 0:20:27.000 --> 0:20:30.159 a very difficult one. So here the couple of easy 0:20:30.280 --> 0:20:34.000 answers to that, and I say easy facetiously. But the 0:20:34.040 --> 0:20:38.520 ways that we maintain and mitigate exposure when you talk 0:20:38.560 --> 0:20:41.600 about being able to turn a profit is you have 0:20:41.680 --> 0:20:45.040 to stay on top of your insurance and your insurances 0:20:45.040 --> 0:20:47.640 and safety. So what I mean by that is accident 0:20:47.720 --> 0:20:50.960 courses to limit the number of vehicles a vehicular accidents 0:20:50.960 --> 0:20:53.920 you get into so that your order liability claims stay low. 0:20:54.560 --> 0:20:58.639 Workers compensation. We have such an extensive workers compensation program 0:20:58.640 --> 0:21:00.680 because as I'm sure you could imagine, I have two 0:21:00.680 --> 0:21:04.480 thousand buses employees, we have quite a bit of workers 0:21:04.480 --> 0:21:07.760 compensation claims. So to stay on top of that program, 0:21:08.040 --> 0:21:12.240 mitigate the workers compensation claims, mitigate the losses, return to 0:21:12.280 --> 0:21:14.840 work policies, things like that when you can, when you're 0:21:14.880 --> 0:21:18.040 able to control and mitigate those type of costs, that 0:21:18.280 --> 0:21:21.880 is way to turn profit. You know, you can't sacrifice safety, right, 0:21:21.920 --> 0:21:23.879 so you still have to put the best, latest and 0:21:23.920 --> 0:21:26.119 greatest vehicles on the road. But what you can do 0:21:26.200 --> 0:21:28.639 by that is if you have great credit and you 0:21:28.680 --> 0:21:31.840 build a grood company, you can leverage debt. So if 0:21:31.920 --> 0:21:33.840 I'm going to make sure that I pour the money 0:21:33.920 --> 0:21:36.159 in my company, back into labor and back into and 0:21:36.160 --> 0:21:39.359 I reinvest into my vehicles. I can, I can buy 0:21:39.560 --> 0:21:43.359 vehicles at an extremely large number of quantity, and I 0:21:43.359 --> 0:21:46.920 could have great rates to buy those vehicles. So that's 0:21:46.920 --> 0:21:49.439 a great way to leverage debt in our industry is 0:21:49.440 --> 0:21:52.520 that if you want to have a good, safe operation, 0:21:52.840 --> 0:21:55.760