Defending Contractors, Part 1: Lead Agencies and Brokers

For decades, motorcoach providers have provided commuter-express service, under contract, to transit agencies (and, occasionally, to municipalities which do not even have formal transit agencies). Particularly in the past 20 years, this role has expanded: Motorcoach providers are increasingly providing service on local and regional routes, often with regular buses – not even motorcoaches.

Similarly, many motorcoach companies also own schoolbuses, and provide schoolbus service, under contract, to school districts. For decades, roughly a third of all schoolbus service has been contracted out, and this percentage had remained surprisingly consistent. For the same reasons that contracted transit service has been expanding, I expect contracted schoolbus service to soon expand as well.

Other modes, like non-emergency medical transportation (NEMT) or “ambulette” service operate solely under contract to funding agencies or their brokers. These contractors have far worse problems: Their “lead” or funding agencies are not even transportation bureauracies (like transit agencies or departments of transportation), but usually healthcare agencies. In some cases, the lead agencies are not even healthcare agencies: A few years ago, non-emergency services (NEMT, Medicaid and VA service) in New Jersey were “managed” by the state’s Department of the Treasury.

Paratransit services are also contracted out for the most part, where the lead agencies are mostly transit agencies. In small, rural communities, transit service to the general public is often demand-responsive; some of this is provided by public agencies (often municipalities which do not have transit agencies) while some service is contracted out.

Finally, a small amount of special needs schoolbus transportation is contracted out. When it is, the contractors are often the same ones who provide general education pupil transportation to the same school districts. This practice is less common because the students who use these services are far more vulnerable, and many school districts like to maintain tighter control over the quality of service. In contrast, transit and healthcare agencies responsible for paratransit and non-emergency services cannot wait to pawn off the responsibilities to deal with them, particularly as the contractors indemnify them, and “hold them harmless,” for all errors and omissions. When brokers are involved, these lead agencies are insulated by two layers of indemnification.

Trends, Trials and Tribulation

The significant amount of public transportation service contracted out reflects a number of factors including:

  • Contractors almost always provide the service for less money than public agencies – even accounting for the often bloated bureaucracies ostensibly in charge of managing and monitoring them, and the high costs of service, overall, as a result. Since these contractors indemnify their lead agencies, the lead agencies are not often held accountable for safety – even while all types of lead agencies and brokers control critical factors which affect safety. The most obvious of these factors are the design of routes, the selection of stops, the establishment of schedules and/or the assignment of trips.
  • In the case of shared-ride demand-responsive services, they are usually contracted out because they are far more complex to design (when any semblance of design is even performed) and exponentially more complex to operate.[1] Especially where design is non- or barely-existent, operations are even more complex. Transit agencies at least have transit bureaucrats in charge, and most agencies contain staff with varying degrees of skill in at least setting parameters for their scheduling software. The same is not true for school district bureaucrats. However, the complexity of demand-responsive schoolbus service (mostly for “special needs” students) is far less, where routes and schedules are generally the same from day to day, all year long. So, along with a greater concern for more vulnerable students, special needs school transportation is less often contracted out.
  • Regarding fixed route general education schoolbus service, many or most school districts have a weak command of route design, stop selection and the array of things that can go wrong when they are not designed properly (see;;;;; However, the same routes operate largely unchanged throughout the schoolyear. Plus, for decades, routes, schedules and stops have been established by software (which simply optimizes the chaos from the lack of design). So the principal issue is cost. However, with more concern about the passengers than other modes, school districts do not contract out service as commonly as do many other modes: Roughly a third of all general education schoolbus service is contracted out.
  • As noted, contractors are universally required to indemnity or “hold harmless” their lead agencies – effectively relieving themselves of any accountability for incidents. In reality, lead agencies commit many errors and omissions which contribute to incidents, and/or which create an operating environment which makes it challenging and/or unprofitable for their contractors to avoid them.
  • Unlike most public agencies, contractors’ drivers are typically not unionized. But even when they are (the larger contractors more commonly are), the lead agencies can screen out the onerous provisions by disallowing them in the requests for proposals to which contractors are required to submit bids.
  • Most elusive of these factors – and a central theme that will weave in and out of this series of installments – is that few plaintiffs’ attorneys bother to file against lead agencies or brokers who are often largely (and in some cases almost solely) responsible for the incidents. While excellent, honest hardworking attorneys can be found, they hardly abound.

As a result of all these factors, lead agencies effectively operate with near-complete impunity – often insulated by a second layer of brokers. With no accountability (or rare or marginal accountability at best), in a society lacking accountability in general, contracting is a major force: The cost savings, indemnification, elimination or minimization of union-related constraints, and the avoidance of complexity, contracting is hard to resist. The problem is, of course, that contractors do not make many major decisions, and are often victimized by hapless policy-making and planning decisions which lead to incidents for which they are most-often blamed – even where much or all of the errors and omissions are not their fault.

Immunity and Impunity

The degree to which impunity mirrors immunity varies considerably by mode. At one end of the spectrum, despite their many shortcomings (particularly this disregard for system design and efficiency), the school transportation community is vividly distinguishable from fellow modes in that officials, management and staff alike love and adore the passengers. At the other extreme – transit service (and many paratransit services) – officials, management and staff loathe the passengers.

This disposition is particularly true of disabled passengers, and even more so for wheelchair users. Such passengers require more time (particularly wheelchair users – who must be loaded and unloaded via a lift or ramp even when their chairs are not secured) and are clearly more trouble. They involve more “exposure” because of the body of regulations (mostly the Americans with Disabilities Act) designed to protect them. And particularly with the paucity of knowledge about, and disinterest in, designing such services, their costs are considerably higher than those of fixed route services.

Motorcoach operations lie in between these extremes. But other than when contracted by transit agencies, their concern for passengers lies closer to that of school districts. Even where management and drivers may not care about passenger safety as a personal matter, the motorcoach operating environment revolves heavily around the notion of “customer service.” Within this environment, the concern for comfort often trumps the concern for safety.

Motorcoach service is also peculiar in that it encompasses a mix of excellent safety features juxtaposed on a reckless disregard for other aspects of it. An example of this disregard is the common disinterest in fatigue-related factors in the driver assignment process (see; Similar is the disregard for the likelihood of drivers possessing Obstructive Sleep Apnea (see;;; and At the other end of the spectrum, the concern for comfort often ropes in safety along with it. Plus many motorcoach practices (or standards of care) – such as the prohibition of standees, heavily-padded forward-facing seats, pneumatic suspension systems and, since 2015, the requirement for the installation (not the usage) of three-point occupant restraints — provide significant safety advantages which transit service (provided with buses) does not.

Largely because of the factors cited above, more and more private transportation companies continue to operate under contract to public agencies and brokers. With the impunity these factors provide, lead agencies have increasingly asserted more and more control over key operating parameters. And as they do – particularly when they sandwich in brokers to ostensibly oversee and direct operations – the decisions these agencies and brokers make are increasingly responsible for incidents in which their contractors are involved. In some cases, the operating environments created by these agencies and/or their brokers leave the contractors few reasonable choices to operate safely. As a consequence, compromises of passenger, pedestrian and motorist safety abound (see ).

Defending Contractors

Because of these factors and trends, defending contractors is gradually becoming easier – at least for those who understand the complex dynamics involved in both operations and the impacts which the even-more-complex dynamics of the relationships among operating agencies, lead agencies and brokers. This is not to say that contractors are never at fault. But they are not solely at fault. In some cases – most commonly in the NEMT sector when contractors operate under the alleged “direction” of brokers – it is challenging to place any fault on contractors for even the worst incidents.

This reality is not easy for even a seasoned expert to learn. That is because so few attorneys are willing to file against lead agencies and, particularly, brokers, particularly in certain sectors. (The reasons for this will be explored, in detail, in a future installment in this series.) So the opportunity to review the relationships between contractors and brokers is usually limited, and most plaintiffs’ attorneys focus only on the easy, smaller fish directly in front of them whose involvement can be understood or expressed in simple terms.

For such reasons, I have always been reluctant to serve on the defendant’s side of a wheelchair tipover case. However, I recently departed from this pattern on two cases where I agreed to help defend nursing homes whose staff members were blamed for a wheelchair tipover largely because the plaintiffs’ attorneys were too cheap and lazy to file against the brokers which selected the contractors, governed their operations and poisoned their operating environments with reckless disregard, and often a degree of stupidity offensive to anyone with a modicum of knowledge about operations. In one of these cases, I found the brokerage contract so onerous that it was almost impossible for a contractor to operate safely in the operating environment which the broker and its hapless lead agency had created. The unlucky contractor on whose vehicle the incident occurred was, in fact, scapegoated for the incident by the broker, and never assigned any further trips – effectively destroying the company. But while I am not helping to defend that long-gone contractor, I learned along the way that it “never had a chance,” and could only have regularly (if even occasionally) secured a wheelchair at great financial risk.

In future installments in this series, I will explore the relationships between contractors and their lead agencies and brokers in great detail. Armed with such knowledge, and an expert who understands them intimately and has had experience dealing with them as a contractor, a contractor’s attorney (selected by its carrier with even less knowledge of these relationships and focused largely on paying experts as little as possible – when they cannot avoid paying them altogether) can learn about these relationships and defend his or her client. Of course, few or no attorneys read NATIONAL BUS TRADER (although many do review reprints of many of them in excellent attorney-oriented resources like the newsletter of So it is incumbent upon the readers of publications like NATIONAL BUS TRADER to explain these relationships to their carriers’ counsel. And their attorneys must, in turn, explain them to their carriers so that they permit the attorneys to make the effort needed to defend their clients when the facts provide grounds for doing so (or at least sharing the “damage pie”).

Without connecting these dots, contractors’ carriers are simply going to permit their counsel to dance around a bit and try to lower the settlement value through the trio of lies, spoliation and shenanigans which comprises the defense in most cases where genuine fault exists at some level. Armed with this understanding affords both carriers and their attorneys other choices. Quite often, it affords them far better choices.

[1] No better illustration of this is that schoolbus service in the U.S. began largely with buckboards. But after the first day of school, no drivers were needed: The horses effectively learned the routes and stops – although they could not make adjustments for absentees (or “no-shows”). This hardly mattered because, in the era before telephone were common, drivers could not do so either.

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