Greyhound is in trouble, their major city stops are being bought-out by a hedge fund. What will many people do for public transportation? ...sad

[World B Free]

Greyhound bus stops are valuable assets. Here’s who’s cashing in on them​

New YorkCNN —
You can’t get here from there. That’s the increasing problem facing around 60 million people who depend on intercity buses.

Intercity bus lines like Greyhound, Trailways and Megabus, an overlooked but essential part of America’s transportation system, carry twice the number of people who take Amtrak every year. But the whole network faces a growing crisis: Greyhound and other private companies’ bus terminals are rapidly closing around the country.

Houston, Philadelphia, Cincinnati, Tampa, Louisville, Charlottesville, Portland, Oregon, and other downtown bus depots have shuttered in recent years. Bus terminals in major hubs like Chicago and Dallas are also set to close. Greyhound and other companies have relocated their stops far away from city centers, which are often inaccessible by public transit, switched to curbside service or eliminated routes altogether.

These stations built decades ago are shuttering because of high operating costs, government underfunding and, surprisingly, the entrance of a hedge fund buying up Greyhound’s real estate for lucrative resale.

Greyhound terminal closures in one state can unravel service in others, and the closures threaten to break the comprehensive web of national bus routes. Greyhound suspended service for a year in Jackson, Mississippi, after the terminal closed and also left Little Rock, Arkansas, after a closure.

All this happening at once is really startling,” said Joseph Schwieterman, a DePaul University professor who researches intercity bus travel and directs the university’s Chaddick Institute for Metropolitan Development. “You’re taking mobility away from disproportionately low-income and mobility-challenged citizens who don’t have other options.”

Roughly three-quarters of intercity bus riders have annual incomes of less than $40,000. More than a quarter would not make their trip if bus service was not available, according to surveys by Midwestern governments reviewed by DePaul University.

Intercity bus riders are also disproportionately minorities, people with disabilities, and unemployed travelers.

A spokesperson for Greyhound, which is now owned by German company FlixMobility, said it strives to offer customers the most options for connections, but has “encountered challenges in some instances.” The spokesperson also said they “actively engage with local stakeholders to emphasize the importance of supporting affordable and equitable intercity bus travel.”

The terminal closures have been accelerating as Greyhound, the largest carrier, sells its valuable terminals to investors, including hedge fund Alden Global Capital.

Last year, Alden subsidiary Twenty Lake Holdings purchased 33 Greyhound stations for $140 million. Alden is best known for buying up local newspapers like The Chicago Tribune, New York Daily News and The Baltimore Sun, cutting staff, and selling some of the iconic downtown buildings.

Alden has started to sell the Greyhound depots to real estate developers, speeding up the timetable for closures.

I don’t know the specific details of each building, but it is clear what is happening here: an important piece of transit infrastructure is being sacrificed in the name of higher profits,” said Stijn Van Nieuwerburgh, a professor of real estate at Columbia Business School.

Twenty Lake Holdings did not respond to requests for comment. Attempts to reach Alden were unsuccessful.

Greyhound selling stations​

The closures are the latest pressure point for intercity bus travel, which has been neglected for decades.

Local, state and the federal agencies have underinvested in intercity bus travel and relied on private companies to provide an essential public service for mostly low-income passengers. Some cities have been hostile to intercity buses and blocked efforts to relocate terminals.

The public sector has turned a cold shoulder to buses,” DePaul’s Schwieterman said. “We subside public transit abundantly, but we don’t see this as an extension of our transit system. Few governments view it as their mandate.”

Bus terminals are costly for companies to operate, maintain and pay property taxes on. Many have deteriorated over the years, becoming blighted properties struggling with homelessness, crime and other issues.

But terminal closures cause a ripple effect of problems.

Travelers can’t use the bathroom and or stay out of the harsh weather get something to eat while they wait. People transferring late at night or early in the morning, sometimes with long layovers, have no place to safely wait or sleep. It’s worse in the cold, rain, snow or extreme heat.

Bus carriers often try to switch to curbside service when a terminal closes, but curbside bus service can clog up city streets with passengers and their luggage, snarl traffic, increase pollution, and frustrate local business owners. In Philadelphia, a Greyhound terminal closure and switch to curbside service after its lease ended turned into a “humanitarian disaster” and “municipal disgrace” with people waiting on street corners.

In Cincinnati, the Greyhound terminal downtown closed last year after a sale and relocated to a suburban area far from public transportation.

A trailer in a parking lot became the new Greyhound stop, with limited seating inside, two restrooms and no food. It’s open 12:30 a.m. to 5:30 p.m.

“It was plopped in the middle of nowhere,” said Cam Hardy, president of Better Bus Coalition, a transit advocacy group in the Cincinnati area. Hardy himself takes the Greyhound bus to Indianapolis frequently.

“It’s suffering big time. I’m really concerned,” Hardy said. “I think about my elders and people waiting in inclement weather. People need a secure, safe place to wait and clear instructions if there’s a delay.”

Rise and fall of intercity buses​

Although intercity bus travel is an afterthought to many people today, it has been an important part of American transportation since the early 20th century, delivering both rich and poor families across the country.

Greyhound, which was started in Hibbing, Minnesota in 1914, became the largest intercity bus company in the United States.

Beginning in the 1930s, Greyhound built hundreds of modern bus terminals, often in the “Streamline Moderne” architectural style in the largest cities to match its streamline buses.

In many cities, bus terminals were the only business open 24 hours a day. The terminals and intercity buses were sometimes symbols of Americana and adventure, used as scenes in numerous films ranging from Midnight Cowboy to Forest Gump.

But demand for intercity buses weakened as the interstate highway system grew, car ownership increased, air travel expanded, and city centers deteriorated. Companies cut service and closed terminals starting around the 1960s.

Cities lost nearly one-third of intercity bus service between 1960 and 1980 and more than half of the remaining service between 1980 and 2006, according to DePaul University research.

Federal deregulation of the intercity bus industryin the 1980s sped up service cuts. Deregulation allowed carriers to abandon their unprofitable routes, resulting in a wave of service reductions in smaller cities.

Ridership dropped from 140 million passengers in 1960 to 40 million by 1990.

Traditionally, buses operated from their own private terminals or from city-owned facilities. But beginning in the late 1990s, buses going from Chinatown to Chinatown in different cities along the Northeast Corridor emerged. These discount carriers avoided terminals and operated from the curb.

The success of the so-called “Chinatown bus” model led to a boom in curbside carriers, offering slightly more perks (free internet!) and newer buses with sleek branding and lower prices than Greyhound buses.

In 2006, Megabus debuted, followed by BoltBus a year later. Companies found that operating curbside saved money by reducing labor costs and eliminating high costs of running their own terminals.

“The industry has been increasingly leaving the terminal to operate on the curb,” said Nicholas Klein, an assistant professor in Cornell University’s department of city and regional planning who studies intercity bus travel.

While the growth of curbside carriers like Megabus has helped the intercity bus industry draw new riders, curbside carriers usually only operate in major cities and typically do not offer routes that require transfers.

“Losing out on terminals means that cities are going to have to regulate curbside service,” Klein said. “Someone has to deal with the consequences of lots of people waiting for buses where there’s not sufficient services.”

New solutions​

As Greyhound terminals close, transit advocates say the public sector needs to step in to play a larger role in supporting intercity bus travel.

“Intercity buses should no longer be an invisible mode to city governments,” said Joseph Schwieterman. “The era of privately-run stations is rapidly ending, so governments need to figure out how to assure that service continues without pushing people out into the rain and cold.”

One promising model is in Atlanta, where Greyhound opened a new 14,000 square-foot dedicated terminal this year with financial support from the federal government. The station is used by other intercity bus operators and is near public transit.

Some public transit advocates note than train stations are more anchored and less movable than bus stations. And, in many cases, they can serve as dual train and bus stations. Milwaukee and Boston, for example, also have municipal intercity bus terminals located next to train stations.

Access to publicly owned intermodal facilities is crucial for providing communities across the U.S. with intercity bus service,” the Greyhound spokesperson said. “We strongly urge local and regional governments to support intercity bus access to these centers.”

In Houston, Greyhound last month closed its centrally-located terminal and moved to a smaller stop with less access to public transit.

Gabe Cazares, the executive director of transportation advocacy group Link Houston, wants to see a publicly-owned, centralized transportation hub in Houston as a permanent replacement for the Greyhound terminal.

“As long as public sector takes a hands-off approach, we’re going to continue to see the cascading problems every time a bus operator closes,” Cazares said. “We’re going to have to come up with creative solutions to tackle this.”

https://www.cnn.com/2023/12/17/business/greyhound-buses-transportation-cities/index.html

Source: https://www.cnn.com/2023/12/17/business/greyhound-buses-transportation-cities/index.html

 

[killagram]

I'd rather walk than ride that crack infested hooptie...brah

 

[World B Free]

I'd rather walk than ride that crack infested hooptie...brah

Well everyone does have money like you, the Greyhound was for generally low-income people or for people who wanted a low cost way to travel: this is a big loss for the common person.

 

[World B Free]

The Larger Issue:

The Secretive Industry Devouring the U.S. Economy​

Rogé Karma

12–15 minutes

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Private equity has made one-fifth of the market effectively invisible to investors, the media, and regulators.

Illustration by The Atlantic. Sources: Shutterstock; Getty.

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Updated at 9:30 a.m. ET on October 30, 2023
The publicly traded company is disappearing. In 1996, about 8,000 firms were listed in the U.S. stock market. Since then, the national economy has grown by nearly $20 trillion. The population has increased by 70 million people. And yet, today, the number of American public companies stands at fewer than 4,000. How can that be?

One answer is that the private-equity industry is devouring them. When a private-equity fund buys a publicly traded company, it takes the company private—hence the name. (If the company has not yet gone public, the acquisition keeps that from happening.) This gives the fund total control, which in theory allows it to find ways to boost profits so that it can sell the company for a big payday a few years later. In practice, going private can have more troubling consequences. The thing about public companies is that they’re, well, public. By law, they have to disclose information about their finances, operations, business risks, and legal liabilities. Taking a company private exempts it from those requirements.
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That may not have been such a big deal when private equity was a niche industry. Today, however, it’s anything but. In 2000, private-equity firms managed about 4 percent of total U.S. corporate equity. By 2021, that number was closer to 20 percent. In other words, private equity has been growing nearly five times faster than the U.S. economy as a whole.
James Surowiecki: The method in the market’s madness
Elisabeth de Fontenay, a law professor at Duke University who studies corporate finance, told me that if current trends continue, “we could end up with a completely opaque economy.”

This should alarm you even if you’ve never bought a stock in your life. One-fifth of the market has been made effectively invisible to investors, the media, and regulators. Information as basic as who actually owns a company, how it makes its money, or whether it is profitable is “disappearing indefinitely into private equity darkness,” as the Harvard Law professor John Coates writes in his book The Problem of Twelve. This is not a recipe for corporate responsibility or economic stability. A private economy is one in which companies can more easily get away with wrongdoing and an economic crisis can take everyone by surprise. And to a startling degree, a private economy is what we already have.
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America learned the hard way what happens when corporations operate in the dark. Before the Great Depression, the whole U.S. economy functioned sort of like the crypto market in 2021. Companies could raise however much money they wanted from whomever they wanted. They could claim almost anything about their finances or business model. Investors often had no good way of knowing whether they were being defrauded, let alone whether to expect a good return.

Then came the worst economic crisis in U.S. history. From October to December of 1929, the stock market lost 50 percent of its value, with more losses to come. Thousands of banks collapsed, wiping out the savings of millions of Americans. Unemployment spiked to 25 percent. The Great Depression generated a crisis of confidence for American capitalism. Public hearings revealed just how rampant corporate fraud had become before the crash. In response, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws launched a regime of “full and fair disclosure” and created a new government agency, the Securities and Exchange Commission, to enforce it. Now if companies wanted to raise money from the public, they would have to disclose a wide array of information to the public. This would include basic details about the company’s operations and finances, plus a comprehensive list of major risks facing the company, plans for complying with current and future regulations, and documentation of outstanding legal liabilities. All of these disclosures would be reviewed for accuracy by the SEC.
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This regime created a new social contract for American capitalism: scale in exchange for transparency. Private companies were limited to 100 investors, putting a hard limit on how quickly they could grow. Any business that wanted to raise serious capital from the public had to submit itself to the new reporting laws. Over the next half century, this disclosure regime would underwrite the longest period of economic growth and prosperity in U.S. history. But it didn’t last. Beginning in the “Greed Is Good” 1980s, a wave of deregulatory reforms made it easier for private companies to raise capital. Most important was the National Securities Markets Improvement Act of 1996, which allowed private funds to raise an unlimited amount of money from an unlimited number of institutional investors. The law created a loophole that effectively broke the scale-for-transparency bargain. Tellingly, 1997 was the year the number of public companies in America peaked.
From the November 2018 issue: The death of the IPO

“Suddenly, private companies could raise all the money they want without even thinking about an IPO,” De Fontenay said. “That completely undermined the incentives companies had to go public.” Indeed, from 1980 to 2000, an average of 310 companies went public every year; from 2001 to 2022, only 118 did. The number briefly shot up during the coronavirus pandemic but has since fallen. (Over the same time period, the rate of mergers and acquisitions soared, which also helps explain the decline in public companies.)

Meanwhile, private equity has matured into a multitrillion-dollar industry, devoted to making short-term profits from highly leveraged transactions, operating with almost no regulatory or public scrutiny. Not all private-equity deals end in calamity, of course, and not all public companies are paragons of civic virtue. But the secrecy in which private-equity firms operate emboldens them to act more recklessly—and makes it much harder to hold them accountable when they do. Private-equity investment in nursing homes, to take just one example, has grown from about $5 billion at the turn of the century to more than $100 billion today. The results have not been pretty. The industry seems to have recognized that it could improve profit margins by cutting back on staffing while relying more on psychoactive medication. Stories abound of patients being rushed to the hospital after being overprescribed opioids, of bedside call buttons so poorly attended that residents suffer in silence while waiting for help, of nurses being pressured to work while sick with COVID. A 2021 study concluded that private-equity ownership was associated with about 22,500 premature nursing-home deaths from 2005 to 2017—before the wave of death and misery wrought by the pandemic.

Eventually, the public got wind of what was happening. The pandemic death count focused attention on the industry. Journalists and watchdog groups exposed the worst of the behaviors. Policy makers and regulators, at long last, began to take action. But by then, much of the damage had been done. “If we had some form of disclosure, we probably would have seen regulatory action a decade earlier,” Coates told me. “But instead, we’ve had 10-plus years of experimentation and abuse without anyone knowing.”

Something similar could be said about any number of industries, including higher education, newspapers, retail, and grocery stores. Across the economy, private-equity firms are known for laying off workers, evading regulations, reducing the quality of services, and bankrupting companies while ensuring that their own partners are paid handsomely. The veil of secrecy makes all of this easier to execute and harder to stop.
Private-equity funds dispute much of the criticism of the industry. They argue that the horror stories are exaggerated and that a handful of problematic firms shouldn’t tarnish the rest of the industry, which is doing great work. Freed from onerous disclosure requirements, they claim, private companies can build more dynamic, flexible businesses that generate greater returns for shareholders. But the lack of public information makes verifying these claims difficult. Most careful academic studies find that although private-equity funds slightly outperformed the stock market on average prior to the early 2000s, they no longer do so. When you take into account their high fees, they appear to be a worse investment than a simple index fund.

“These companies basically get to write their own stories,” says Alyssa Giachino, the research director at the Private Equity Stakeholder Project.

“They produce their own reports. They come up with their own numbers. And there’s no one making sure they are telling the truth.”
In the Roaring ’20s, the lack of corporate disclosure allowed a massive financial crisis to build up without anyone noticing. A century later, the growth of a new shadow economy could pose similar risks.

The hallmark of a private-equity deal is the so-called leveraged buyout. Funds take on massive amounts of debt to buy companies, with the goal of reselling in a few years at a profit. If all of that debt becomes hard to pay back—because of, say, an economic downturn or rising interest rates—a wave of defaults could ripple through the financial system. In fact, this has happened before: The original leveraged buyout mania of the 1980s helped spark the 1989 stock-market crash. Since then, private equity has grown into a $12 trillion industry and has begun raising much of its money from unregulated, nonbank lenders, many of which are owned by the same private-equity funds taking out loans in the first place.
Meanwhile, interest rates have reached a 20-year high, posing a direct threat to private equity’s debt-heavy business model. In response, many private-equity funds have migrated toward even riskier forms of backroom financing. Many of these involve taking on even more debt on the assumption that market conditions will soon improve enough to restore profitability. If that doesn’t happen—and many of these big deals fail—the implications could be massive.

Joe Nocera and Bethany McLean: What financial engineering does to hospitals
The industry counters that private markets are a better place for risky deals precisely because they have fewer ties to the real economy. A traditional bank has a bunch of ordinary depositors, whereas if a private-equity firm goes bust, the losers are institutional investors: pension funds, university endowments, wealthy fund managers. Bad, but not catastrophic. The problem, once again, is that no one knows how true that story is. Banks have to disclose information to regulators about how much they’re lending, how much capital they’re holding, and how their loans are performing. Private lenders sidestep all of that, meaning that regulators can’t know what risks exist in the system or how tied they are to the real economy.

“Everything could be just fine,” says Ana Arsov, a managing director at Moody’s Investors Service who leads research on private lending. “But the point is that we don’t have the information we need to assess risk. Who is making these loans? How big are they? What are the terms? We just don’t know. So the worry is that the leverage in the system might grow and grow and grow without anyone noticing. And we really don’t know what the effects could be if something goes wrong.”

The government appears to be at least somewhat aware of this problem. In August, the SEC proposed a new rule requiring private-equity fund advisers to give more information to their investors. That’s better than nothing, but it hardly addresses the bad behavior or systemic risk. Nearly a century ago, Congress concluded that the nation’s economic system could not survive as long as its most powerful companies were left to operate in the shadows. It took the worst economic cataclysm in American history to learn that lesson. The question now is what it will take to learn it again.

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This article originally stated that Ana Arsov works for Moody's Analytics. In fact, she works for Moody's Investors Service.

https://www.theatlantic.com/ideas/archive/2023/10/private-equity-publicly-traded-companies/675788/

 

[Politic Negro]

 

[tallblacknyc]

Seen a few segments about this topic