Federal Register, Volume 64 Issue 93 (Friday, May 14, 1999)

[Federal Register Volume 64, Number 93 (Friday, May 14, 1999)]
[Notices]
[Pages 26475-26476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12255]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Docket No. MC-F-20945]


Coach USA, Inc., and Yellow Cab Service Corporation--Control--
Ross Tours, Inc. [STB Docket No. MC-F-20946] ¹; Coach USA, 
Inc.--Control--2948-7238 Quebec Inc.

AGENCY: Surface Transportation Board.

    \1\ These proceedings are not consolidated. A single decision is 
being issued for administrative convenience;
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ACTION: Notice tentatively approving finance transactions.

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SUMMARY: Coach USA, Inc. (Coach), a noncarrier, and its wholly owned 
noncarrier subsidiaries Yellow Cab Service Corporation (Yellow Cab) and 
Coach Canada, Inc. (Coach Canada), filed an application ² 
under 49 U.S.C. 14303 for Coach and Yellow Cab to acquire control of 
Ross Tours, Inc. (Ross), and for Coach and Coach Canada to acquire 
control of 2948-7238 Quebec Inc., d/b/a Visite Touristique de Quebec 
(VTQ). Persons wishing to oppose the applications must follow the rules 
under 49 CFR 1182.5 and 1182.8.³ The Board has tentatively 
approved the transactions, and, if no opposing comments are timely 
filed, this notice will be the final Board action.

    \2\ Applicants filed a single pleading. Although the proposed 
control transactions are unrelated, applicants seek approval in a 
single application which embraced both transactions. Each 
transaction has been separately docketed.
    \3\ Revised procedures governing finance applications filed 
under 49 U.S.C. 14303 were adopted in Revisions to Regulations 
Governing Finance Applications Involving Motor Passenger Carriers, 
STB Ex Parte No. 559 (STB served Sept. 1, 1998).

DATES: Comments must be filed by June 28, 1999. Applicants may file a 
reply by July 13, 1999. If no comments are filed by June 28, 1999, this 
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notice is effective on that date.

ADDRESSES: Send an original and 10 copies of any comments referring to 
STB Docket No. MC-F-20945, et al. to: Surface Transportation Board, 
Office of the Secretary, Case Control Unit, 1925 K Street, N.W., 
Washington, DC 20423-0001. In addition, send one copy of comments to 
applicants' representatives: Betty Jo Christian and David H. Coburn, 
Steptoe & Johnson LLP, 1330 Connecticut Avenue, N.W., Washington, DC 
20036.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for 
the hearing impaired: (202) 565-1695).]

SUPPLEMENTARY INFORMATION: In Coach USA, Inc., and Coach USA North 
Central, Inc.--Control--Nine Motor Passenger Carriers, STB Docket No. 
MC-F-20931, et al. (STB served Nov. 19, 1998),⁴ we approved, 
subject to comments, Coach's transfer of direct control of its 
operating motor passenger carrier subsidiaries to six noncarrier 
subsidiaries: Coach USA North Central, Inc., Coach USA Northeast, Inc., 
Coach USA South Central, Inc., Coach USA Southeast, Inc., Coach USA 
West, Inc., and Yellow Cab. The published tentative grants of authority 
in these proceedings were scheduled to become effective on January 4, 
1999, unless opposing comments were filed by that date. On January 4, 
1999, Ground Systems, Inc., d/b/a Airport Bus filed comments in 
opposition to the control applications in STB Docket Nos. MC-F-20931, 
MC-F-20932, MC-F-20933, MC-F-20934, MC-F-20935, and MC-F-20937. No 
comments in opposition were filed in STB Docket No. MC-F-20936, in 
which Coach and Yellow Cab sought control of four motor passenger 
carriers, so that grant of authority became effective on January 4, 
1999.⁵
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    \4\ A single decision was issued for administrative convenience 
that included STB Docket Nos. MC-F-20931, MC-F-20932, MC-F-20933, 
MC-F-20934, MC-F-20935, MC-F-20936, and MC-F-20937.
    \5\ Coach and Yellow Cab state that the tentative grant of 
authority in STB Docket No. MC-F-20936 was vacated because comments 
were filed in response to the application. The statement is 
incorrect.
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    In Coach USA, Inc. and Coach Canada, Inc.--Control and Continuance 
in Control--Autocar Connaisseur, Inc., Erie Coach Lines Company, and 
Trentway-Wagar, Inc., STB Docket No. MC-F-20938 (STB served Dec. 17, 
1998), we approved, subject to comments, Coach Canada's ⁶ 
control of Autocar Connaisseur, Inc. (Autocar),⁷ and Erie 
Coach Lines Company, and for continuance in control of Trentway-Wagar, 
Inc.
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    \6\ Coach Canada is a wholly owned subsidiary of Coach that was 
established for the purpose of obtaining direct control of Canada-
based motor passenger carriers that Coach currently controls or may 
seek to control in the future.
    \7\ Autocar subsequently merged with three other affiliated 
noncarrier entities, the parent of which is 3329003 Canada, Inc., a 
noncarrier owned by Coach. See Coach USA, Inc. and Coach Canada, 
Inc.--Control--Autocar Connaisseur, Inc., STB Docket No. MC-F-20943 
(STB served Jan. 27, 1999).
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    In STB Docket No. MC-F-20945, Coach and Yellow Cab seek control of 
Ross.⁸ In STB Docket No. MC-F-20946, Coach and Coach Canada 
seek control of VTQ.⁹ The acquisition of control of Ross 
will be accomplished through stock ownership. According to Coach, the 
stock of Ross has been placed in an independent voting trust pending 
disposition of this proceeding. Coach states that it acquired VTQ in 
the same December 1996 stock transaction in which it acquired control 
of Autocar, a Quebec-based carrier that is part of the same corporate 
family as VTQ. Coach states that, while most of VTQ's operations are in 
Quebec, Coach and Coach Canada have now become aware that VTQ also 
holds federally issued operating authority in the United States. Having 
discovered this unresolved control issue, Coach and Coach Canada now 
seek Board authority to control this carrier.
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    \8\ Ross is a Mississippi corporation. It holds federally issued 
operating authority in Docket No. MC-175674, which authorizes it to 
provide charter and special services between points in the United 
States. It specializes in operations in the Biloxi, MS area, where 
it provides charter services, including airport shuttle services. It 
also holds authority issued by the Mississippi Public Utility 
Commission to conduct intrastate operations. It operates 6 buses; 
employs 7 persons; and earned annual revenues in fiscal year 1998 of 
approximately $406,000. In addition, it operates a fleet of taxicabs 
and holds federally issued authority to conduct operations as a 
common carrier of property, although it does not presently engage in 
any such operations.
    \9\ VTQ is a Quebec corporation. It holds federally issued 
operating authority in Docket No. MC-302514, which authorizes it to 
provide special and charter operations between points in the United 
States. It also holds a variety of operating authorities issued by 
Canadian authorities. VTQ focuses its operations on charter and 
sightseeing services provided in the Quebec City area. On occasion, 
it provides charter transportation between points in Quebec and 
points in the Eastern United States. It operates a fleet that ranges 
up to approximately 25 buses which vary in size depending on the 
season; employs up to 40 persons during peak season periods; and 
earned annual revenues in fiscal year 1998 of $2.6 million.
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    Applicants submit that there will be no transfer of any federal or 
state operating authorities held by the carriers to be acquired. 
Following the consummation of the control transactions, each of the 
carriers will continue operating in the same manner as before and, 
according to Coach, granting the applications will not reduce 
competitive options available to the traveling public. Applicants 
assert that the carriers to be acquired do not compete to any 
meaningful degree with one another and that each faces substantial 
competition from other bus companies and transportation modes.

[[Page 26476]]

    Applicants submit that granting the applications will produce, or 
continue to produce, substantial benefits, including interest cost 
savings from the restructuring of debt and reduced operating costs from 
Coach's enhanced volume purchasing power. Specifically, applicants 
claim that each carrier will benefit from the lower insurance premiums 
negotiated by Coach or its subsidiaries and from volume discounts for 
equipment and fuel. Applicants indicate that the respective subsidiary 
will provide each of the carriers to be acquired with management 
services, such as centralized legal and accounting functions and 
coordinated purchasing services. In addition, applicants state that 
vehicle sharing arrangements will be facilitated through Coach and its 
subsidiaries to ensure maximum use and efficient operation of equipment 
and that coordinated driver training services will be provided. 
Applicants also state that the proposed transactions will have no 
adverse impacts on the employees of Ross and VTQ and that Coach Canada 
and Yellow Cab will honor all collective bargaining agreements.
    Applicants assert that, by further decentralizing certain 
management functions, they will be better able to plan equipment 
utilization, develop financial plans and coordinate other short- and 
long-term operational strategies best designed to meet the specific and 
unique needs of carriers operating in a particular region of the 
country, and their customers. Specifically, Coach Canada and Yellow Cab 
will each maintain a database of the assets, including the vehicles 
operated by each of the operating carriers, which will allow the 
management of Coach Canada and Yellow Cab to more effectively deploy 
vehicles, resulting in more timely and efficient service to the 
traveling public. Further, Coach Canada and Yellow Cab will coordinate 
the safety and compliance programs of the carriers they control, with 
the object of maintaining and raising safety performance levels for 
each of the operating carriers.
    Coach anticipates that Coach Canada and Yellow Cab will be well-
positioned to aid in the assessment of possible future acquisitions of 
motor passenger carriers in the particular area in which they function. 
According to Coach, Coach Canada and Yellow Cab will be able to make 
those assessments in view of the operations of the carriers under their 
control and with a view toward developing and carrying out a strategic 
growth plan. Over the longer term, Coach, Coach Canada and Yellow Cab 
will provide centralized marketing and will further enhance the 
benefits resulting from these acquisitions.
    Coach certifies that: (1) the jurisdictional threshold has been met 
with respect to the transactions that are the subject of the 
applications; ¹⁰ (2) neither Ross nor VTQ has been rated for 
safety by the U.S. Department of Transportation; (3) each of the 
acquired carriers has sufficient liability insurance; (4) neither Ross 
nor VTQ is domiciled in Mexico or owned or controlled by persons of 
that country; and (5) approval of the transactions will not 
significantly affect either the quality of the human environment or the 
conservation of energy resources. Additional information may be 
obtained from the applicants' representatives.
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    \10\ See 49 CFR 1182.2(a)(5).
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    Under 49 U.S.C. 14303(b), we must approve and authorize a 
transaction we find consistent with the public interest, taking into 
consideration at least: (1) the effect of the transaction on the 
adequacy of transportation to the public; (2) the total fixed charges 
that result; and (3) the interest of affected carrier employees. The 
prior consummation of the transaction involving VTQ does not bar 
approval of the application in STB Docket No. MC-F-20946 under section 
14303 if the evidence establishes that the transaction would be 
consistent with the public interest in other respects, and for the 
future.¹¹
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    \11\ Applicants, Coach and Coach Canada, seek nunc pro tunc 
approval of the control of VTQ. While we are granting our tentative 
approval, the need for retroactive effect has not been demonstrated. 
Applicants evidently recognize that they should have sought our 
approval sooner but, under the circumstances, the Board does not 
intend to pursue enforcement actions against applicants for 
previously unauthorized common control.
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    On the basis of the applications, we find that the proposed 
acquisitions of control are consistent with the public interest and 
should be authorized. If any opposing comments are timely filed, this 
finding will be deemed vacated and, unless a final decision can be made 
on the record as developed, a procedural schedule will be adopted to 
reconsider the applications.¹² If no opposing comments are 
filed by the expiration of the comment period, this decision will take 
effect automatically and will be the final Board action.
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    \12\ Under revised 49 CFR 1182.6(c), a procedural schedule will 
not be issued if we are able to dispose of opposition to the 
application on the basis of comments and the reply.
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    Board decisions and notices are available on our website at 
``WWW.STB.DOT.GOV.''
    This decision will not significantly affect either the quality of 
the human environment or the conservation of energy resources.
    It is ordered:
    1. The proposed acquisitions of control are approved and 
authorized, subject to the filing of opposing comments.
    2. If timely opposing comments are filed, the findings made in this 
decision will be deemed as having been vacated.
    3. This decision will be effective on June 28, 1999, unless timely 
opposing comments are filed.
    4. A copy of this notice will be served on: (1) the U.S. Department 
of Transportation, Office of Motor Carriers-HIA 30, 400 Virginia 
Avenue, S.W., Suite 600, Washington, DC 20004; and (2) the U.S. 
Department of Justice, Antitrust Division, 10th Street & Pennsylvania 
Avenue, N.W., Washington, DC 20530.

    Decided: May 10, 1999.

    By the Board, Chairman Morgan, Vice Chairman Clyburn, and 
Commissioner Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 99-12255 Filed 5-13-99; 8:45 am]
BILLING CODE 4915-00-P