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Port Authority Bus Companies Sue City Over Rogue Megabus Stop

By Mathew Katz | February 14, 2012 6:15pm

HELL'S KITCHEN — There may be no such thing as a free ride.

A coalition of bus companies operating out of Port Authority Bus Terminal have sued the city's Department of Transportation for giving Megabus a free spot outside the station, claiming it fosters a non-competitive environment and breaks city and state environmental and safety regulations.

New York State Supreme Court judge denied the coalition's request for a temporary restraining order that would have blocked Megabus from using the new pickup spot, which is on the south side of West 41st Street, between Eighth and Ninth avenues. 

The street is straddled by the bus station, and since it's a city block, the company won't have to pay to be there, according to city DOT policy.

The company had to move from its old hub at West 33rd Street and Ninth Avenue after developer Brookfield Properties began construction on a massive skyscraper project there. It will begin using the new stop on Wednesday.

The companies behind the lawsuit, Greyound Lines, Peter Pan Bus Lines, and Adirondack Transit Lines, claim the city is promoting a non-competitive environment by giving Megabus many of the same perks outside the terminal as they enjoy inside the station — without requiring MegaBus to pay the same fee. Those companies pay roughly $10 million annually to operate out of the city's bus terminal.

The coalition argues that giving Megabus a permit to operate on the street was "in violation of lawful procedures that mandate that all city agencies follow open and transparent procedures in awarding private parties exclusive rights to city-owned property."

The coalition specifically lists concerns about unsafe loading conditions for riders who will board buses next to active traffic lanes. The lawsuit also claims there will not be proper access ramps for the disabled and that Megabus' many street pickups will cause congestion — interfering with other bus companies' business.

Mark Muschenheim, a lawyer with the city's law department, said in a statement that he was grateful the court denied the temporary restraining order against Megabus.

"As the case proceeds, we're confident that the court will find that [the] DOT's actions were lawful and proper," he said.

A spokesman for Megabus declined to comment.