Tour Bus Monopoly Case in NYC Nets $7.5M Deal

MANHATTAN (CN) - The end of the road has come for federal antitrust litigation over New York City's "hop on, hop off" tour-bus companies.

Cornering the market with a joint venture operating under the name Twin America will cost double-decker tour buses operating under the names "Gray Line New York" and "CitySights NY" $7.5 million, state and federal regulators announced on Monday night.

The government said City Sights and Gray Line jacked up their prices by 10 percent after forming Twin America in 2009. It has been nearly three years since regulators blasted the new venture as a monopoly in federal complaint.

Times Square, the Empire State Building and Battery Park are among roughly 50 CitySights LLC-owned stops that Twin America must surrender to the Department of Transportation under the terms of the deal.

Urging the judge to accept the agreement, federal regulators told the court that this provision would dramatically open up the tour bus market.

Gray Line, owned by the Delaware corporation Coach USA, and City Sights, a New York-based LLC, have amassed "large portfolios of bus stop authorizations that enable them to stop at or in close proximity to virtually all of New York City's top attractions and neighborhoods," according to the government's competitive impact statement.

The companies gained this edge "without difficulty years before their joint venture" because the city's department of transportation awarded stops on a "first come, first served" basis, the statement continues.

"Recent entrants, by contrast, have faced persistent difficulties securing bus stop authorizations at or sufficiently near key tourist attractions to be competitive with Twin America as NYC DOT has denied the overwhelming majority of bus stops applied for since Twin America's formation," the statement says. "Most of the stops sought by the entrants - particularly those at or in close proximity to top tourist attractions - are now at capacity or are otherwise unavailable, leaving Twin America with the dominant share of competitively meaningful stops."

New York Attorney General Eric Schneiderman praised the deal in a statement.

"By eliminating the competition between them, the largest operators of New York City's iconic double-decker tour buses were able to raise prices and deprive city visitors of the benefits of a free and fair market," he said.

Lawyers for the bus companies have not returned a request for comment.

The deal's announcement triggers a 60-day comment period before U.S. District Judge Andrew Carter determines whether it is in the public interest.

Other filings on the settlement include a proposed final judgment, a stipulation on that proposal, a stipulation on discovery issues, and an explanation of consent-decree procedures.

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