Actually, it is a violation of Federal law for public transit agencies to offer or provide charter services if there are “willing and able” local private carriers available to perform the service. All public transit agencies receive a subsidy from the Federal government and some also get funding from local and state governments. Most of the money for the subsidies come from taxes on gasoline and diesel fuel, much of which is paid by
private business. These subsidies allow public transit agencies to lower some of their costs.
If allowed to compete directly with private carriers for the same business, it would create an unfair competitive advantage for the transit agencies. In the event that private companies cannot provide the requested service, a local transit agency may step in to provide the needed service.