Class-action claims bus companies created monopoly on NYC toursDec 20, 2012
A new class-action lawsuit claims two bus companies conspired to create a monopoly on "hop-on, hop-off" tours around New York City.
According to a press release from the national law firm of Parker Waichman LLP and the Law Offices of Jim Bartolomei, a class-action lawsuit has been filed against Twin America LLC, formed between Coach USA and City Sights LLC. It claims the companies aimed to dominate the popular bus tours market in New York City. The lawsuit was filed on Dec. 17 in U.S. District Court for the Southern District of New York.
The lawsuit claims these companies conspired to work together and consume most of the so-called "hop-on, hop-off" bus tours in the city. By doing this, they were able to inflate the prices for these tours and practically guarantee they'd get every rider as theirs. Twin America LLC, Coach USA Inc., International Bus Services Inc., City Sights LLC, and City Sights Twin LLC have all been named as Defendants in the lawsuit.
The statement from the firms indicates that "hop-on, hop-off" bus tours are a $100 million-a-year industry in New York city, alone. They're a standard for a first-time visitor to New York City. These buses travel to and from the major tourist attractions in the city, from the Empire State Building to Times Square. Passengers are transported on open-top double-decker buses around the metropolis and at each stop are free to get off the bus and get on another.
Prior to 2008, Coach USA and City Sights were in direct competition with each other, with Coach taking a majority of the riders on these tours. It was at that point when Coach USA allegedly "tired of the competition" and the companies met, negotiated, and eventually formed Twin America LLC. When they did this, the company was essentially going to be responsible for taking 99 percent of all "hop-on, hop-off" tourists around the city. Prices for these rides were able to rise 10 percent, too, as no other competition really existed.
Coach and City Sights share managerial duties over the monopoly but profits are split 60 percent for Coach and the remainder for City Sights.
The lawsuit also claims that these compenies "failed to obtain approval from the federal Surface Transportation Board (STB) before operating Twin America in March 2009. STB approval is needed when there is a transaction involving a change in control of an interstate motor carrier," according to the Parker Waichman release. And when they companies eventually did seek this approval in 2011 - after being chided by New York's Attorney General's office - it was rejected because it was determined that this company had this market cornered unfairly.
The claim has been filed on behalf of two Tennessee tourists and seeks to include anyone who purchased a "hop-on, hop-off" ticket from Twin America since the company was formed.