ITHACA, N.Y. —  For the past six months, the city has been piloting East Green Street as a drop-off and pickup point for intercity buses. To use that spot, the city has required permits and fees for bus companies. When the resolution regarding intercity buses passed in the fall, the co-owner of OurBus threatened to sue, and the company has followed through on that threat.

Last week, OurBus, Inc., which is a third-party bus broker that coordinates trips on buses in and out of Ithaca, filed a federal lawsuit against the city for implementing a fee and permitting system for intercity buses.

A lawsuit filed last week in the U.S. District Court Northern District of New York alleges the city enacted an unlawful ordinance that established a permit system “that purports to regulate the use of its streets by buses, and the bus stops used for the boarding and discharging of passengers” and also “purports to regulate the scheduling of transportation provided by motor carriers of passengers.”

After receiving a permit from the city, OurBus began arranging buses in Ithaca in 2018 with trips to several cities, including New York, Philadelphia, and Washington, D.C. Its transportation is mostly provided by Martz Trailways. The lawsuit said though a “permit could not be lawfully required for a registered motor carrier to exercise its right under federal law to provide transportation to and from the City of Ithaca,” because they were new to brokering in Ithaca, they felt the burden of applying was a lower barrier to entering the market than suing the city at that time.

Related: City discusses needed changes to continue intercity bus stop at Green Street; other PEDC notes

When the bus terminal used by Greyhound, New York Trailways and Shortline closed at 710 W. State St. in October, the city moved those companies to East Green Street. Since the closure, the city has been piloting moving intercity buses there permanently, and Common Council is planning to vote on extending the pilot period Wednesday.

Martz Trailways had already been operating on East Green Street for a year when the other intercity buses were moved there, the lawsuit states.

In November 2018, Common Council passed a resolution charging all intercity carriers $5 per bus to pick up and drop off passengers on East Green Street and requiring companies to submit schedules in advance. Before the vote, OurBus co-founder Axel Hellman said the fees and scheduling requirements would hamper his company’s ability to adapt to customer demand.

“The resolution would make us submit our schedules up to a year in advance and then pay for the fee in advance,” Hellman said. “If something isn’t working, we can’t change it. That’s a recipe for bad service.”

He warned Common Council that the city may face a lawsuit if they passed the resolution and asked them to table the measure.

Council, however, voted unanimously to put the new fees and schedule notice requirements into effect. Mayor Svante Myrick said careful coordination was necessary to ensure safety while four bus carriers share two loading spots on Green Street, and said fees would cover about $200,000 in infrastructure improvements meant to improve accessibility and safety on the block.

“I think the public who are inconvenienced should be reimbursed by the bus companies,” Myrick said in November.

The lawsuit argues the proposed permit was designed to accommodate legacy motor carriers with static schedules, not brokers or companies with frequent schedule changes.

On Feb. 20, the lawsuit states, the city notified OurBus that its permit would not be renewed effective Monday, April 1. Barring buses brokered by OurBus to stop on Ithaca streets and pick up passengers “unduly burdens” and discriminates against interstate commerce in violation of the Commerce Clause of the U.S. Constitution “by regulating only motor carriers that transport passengers in interstate commerce, but not regulating at all, and instead favoring, motor carriers that transport passengers only locally in intrastate commerce,” the lawsuit argues.

The lawsuit alleges the city has advised OurBus to seek out a privately owned off-street bus terminal, though no such terminal exists.

“The city is picking winners and losers, and acting arbitrarily, capriciously, and unreasonably,” the lawsuit states. It further says the city is favoring other companies, such as Greyhound, New York Trailways, and ShortLine, as well as TCAT, and its actions “are designed to put OurBus out of business.”

As relief, the lawsuit asks that the intercity bus permit scheme be declared “unenforceable.”

In response to the lawsuit, City Attorney Ari Lavine, said the city has “by no means” favored one bus company over another.

“Rather, OurBus was too unpredictable in their scheduling and too late—of their own choosing—to sign the necessary permit and pay the required fee for the Green Street Permit Area (other bus companies did so before them; OurBus dragged its feet). That said, the City has long encouraged OurBus to identify alternative loading locations for continued operation in Ithaca, and City staff are actively exploring those options as well,” Lavine said in a statement.

“For safety reasons, the City established a permit and fee system for the Green Street Permit Area that was necessary to manage the volume of buses loading at any time to a safe level.  We otherwise saw buses, including those from OurBus, double-parking in the travel lane, and even loading bags from the travel lane. OurBus’s unpredictable schedules exacerbate this serious safety issue because they have proved unable to consistently mesh their schedule with those of other bus companies in the tight space available on Green Street,” Lavine said.

Devon Magliozzi contributed to this report.

Read the complaint filed in the Northern District of New York below.

OurBus Lawsuit v. City of I… by on Scribd

Kelsey O'Connor

Kelsey O'Connor is the managing editor for the Ithaca Voice. Questions? Story tips? Contact her at and follow her on Twitter @bykelseyoconnor.