Taken For A Ride: Roberts Hawaii's Very Own Race to the Top of School Bus Biz
01/26/2012
flickr: roboppy
Editor's note: This article is part of a series on Hawaii's runaway school bus costs. Read other articles in the series.
Twenty years ago, the Hawaii school bus industry was dominated by a powerful contractor who formed phony companies to circumvent the state’s efforts to prevent a monopoly.
Back then, the competition for school transportation contracts was fierce, and the big contractor became the target of his smaller competitor, who filed a lawsuit to expose the bigger company's shady practices.
After a court battle that lasted years, the little guy finally won.
And that's how Roberts Hawaii, perhaps better known for the stylized yellow rabbit on its large fleet of tropical green tour buses, came to be the biggest school bus contractor today.
"In the old days, when I was there, Roberts was not even part of the Hawaii School Bus Association," George Okano told Civil Beat. Okano is a veteran state transportation procurement officer who started in 1980 and became head of the procurement office in 1991. He left the job in 2001.
"At that time, there was a lot of fear among the smaller guys that Roberts was out to get them," Okano said.
As it turned out, the smaller operators weren't necessarily the ones in Roberts' crosshairs. The company set its sights on Chiaki Matsuo, whose two companies, Laupahoehoe Transportation and Central Transportation, dominated the school bus industry. Matsuo was intent to keep it that way.
Roberts had only been in the business a few years, but it was Matsuo who found himself on the losing end of a lawsuit alleging that he was setting up shell corporations and engaging in other unfair practices in order to drive out competitors.
The lawsuit diminished Matsuo’s power, drained his financial resources and eventually put him out of business. He died while the appeal was still going on.
The legal victory gave Roberts the leverage it needed to gain a stronger foothold in the student transportation industry.
And it made state officials back away from a bidding process they'd put in place to fight monopolization and collusion in the school bus business.
When Laupahoehoe went under, Okano said, Roberts Hawaii was the only one positioned to take over its state contracts — many of which were on the Big Island.
Roberts soon grew into the state's single largest school bus contractor, a position it has held ever since. In the years since the court case, Roberts Hawaii School Bus has won more than half of school bus routes put out for bid by the state, according to a Civil Beat analysis of hundreds of bid documents spanning 11 years. In 2011 alone, the company was low bidder on $7 million worth of student transportation contracts.
