By Ben Fractenberg
MANHATTAN —A tourist bus company may have to break up after a federal agency ruled it was operating a monopoly in the city.
The company Twin America controls both the Gray Line and City Sights NY buses after purchasing the latter in March 2009, according to papers released by the Surface Transportation Board, a federal agency that oversees service disputes.
"The transaction creates a combined entity that possesses excessive market power and has the ability to raise rates without competitive restraint and otherwise conduct its operations to the detriment of consumers,” read the STB's Feb. 8 decision.
The board said the company started to control the market soon after two companies — International Business Services and Gray Line New York City— merged to form Twin America.
“Shortly after the transaction took effect, Twin America did indeed raise its rates significantly, and it has maintained this rate increase," STB's statement said. "The approval of this transaction is not consistent with the public interest.”
The company now has until March 25, unless they appeal the decision, to either cede control of one of the bus lines or no longer provide interstate services, which would put it under the jurisdiction of the New York State Attorney General’s Office rather than under federal regulation.
“Our office welcomes the Board’s decision and will continue to use every avenue – including advocating before regulatory agencies – to protect all New York consumers and those consumers who are visitors of New York,” said Attorney General spokesperson Lauren Passalacqua.
The bus lines continued to operate after the ruling. The Transport Workers Union Local 225, which represents the bus operators and tour guides, sent an e-mail to their members after the decision telling them they would go back to their jobs.
“We're all going to work," said TWU Local 225 representative James Muessig."We’re still gonna be doing what we’re happy doing."
Muessig, whose his union just represents drivers on the Gray Line, said his local has a successor clause protecting their contract should a new owner take over.
A spokesperson for the company said they are looking over the ruling.
"We note the findings of the Surface Transportation Board. We will take time to study the report in detail before deciding on the appropriate course of action,” said Twin America spokesperson Ronn Torossian.
The company did not comment further, but the STB ruling said Twin America argued that they weren't a monopoly because they have competition that includes other tours such as helicopter rides, horse-drawn carriage rides and pedicabs.