Taken For a Ride: Major Mainland School Bus Company Considers Hawaii11/23/2011
Editor's note: This article is part of a series on Hawaii's runaway school bus costs. Read other articles in the series.
UPDATED 10/14/11 1:15 p.m. CORRECTION: This article has been updated to reflect the fact that at least one mainland bus company used to operate in Hawaii.
The nation's second-largest school bus company may soon be rolling into Hawaii.
Durham School Services, based in Chicago, has obtained the paperwork necessary to bid on school bus contracts up for grabs next month. A company official says Durham's interest in the market was sparked after reading Civil Beat's Taken For a Ride series, which documents how the lack of competition among local bus companies is to blame for runaway transportation costs.
If it bids and is successful, Durham would be the first mainland company to enter the Hawaii school bus market in recent history.1
"We're in the initial stages of evaluating if it's the right market to enter, whether now is the right time, and if so, by what method," said Rick Klaus, vice president of sales for the company, which operates about 16,000 school buses in 30 states and Canada.
Klaus and a colleague visited Hawaii last week to meet with school district officials, research the local job market and scope out real estate for a potential operating base.
The school district is currently soliciting bids on 17 contracts containing 88 school bus routes. The contracts would begin in July 2012 and run through June 2018. The invitation for bids comes as the federal government investigates possible collusion in setting prices in Hawaii.
Klaus told Civil Beat it appears that local companies' bids are so high that Durham could come in and undercut them.
The company has long been interested in the Hawaiian market. Recently, an online news alert led him to Civil Beat's series that examined why the state is paying twice as much for transportation as it did six years ago.
Klaus' company sees Hawaii's school bus market as a unique opportunity for a new competitor.
"Prices have gone up and competition has essentially ceased to exist in Hawaii," he said. "That's one of the things that piqued our interest because, although those costs have increased nationwide, they have not increased anywhere near the proportion that the prices have increased in Hawaii."