Continental Trailways says the New York-New Jersey Port Authority is charging "extortionate" rates for use of its downtown Mahhattan bus terminal.
Because the bus company is forced to use Port Authority facilities if it wants to enter mid-Manhattan, Trailways has asked the Interstate Commerce Commission to investigate the entire situation, including the possibility of antritrust violations.
Meanwhile, beginning today, Trailways will pay only what it considers to be "reasonable" charges to the Port Authority for use of its facilities. The bus company says that about $650,000 of the $1.85 million it pays to the authority every year is "overcharge."
"We have to pay 17.5 cents of every dollar of fares we collect to the Port authority," says Trailways vice president T. C. Knappen. "They are charging us that much because they have a monopoly, and we are captive carriers - they have told us as much."
In a letter to Port Authority Chairman Alan Sagner last week, Trailways president J. Kevin Murphy accused the authority of trying to "gouge the public" and Trailways with the high rates.
"Ours riders . . . are primarily (over 70 per cent) people with average income of less than $10,000 per annum, senior citizens, youth and minorities that use intercity bus service because it is the only means they can afford," Murphy said in the letter.
Murphy further charged that the Port Authority, which also runs the airports, gives airline passengers a break at the expense of bus riders.He point out that while Trailways pays up to $101 per square foot for space, "The Port Authority is charging the airlines for the luxurious space they occupy at the airports from $5 to $40 per square foot."
Murphy included with the letter an analysis of what Trailways should be paying, written by William White & Sons, a real estate consulting firm.
"A new bus facility with more space than presently occupied by Continental Trailways near the (present Port Authority terminal) could be build and operated at a cost of approximately $1.2 million per annum," the report claims. "This would result in a savings of approximately $650,000 per annum over and above the present rent being paid."
Murphy also charged that his firm's own investigation had "revealed that other tenants in the bus terminal are paying substantially less rent and commission rates than Trailways." he added that the Port Authority would not supply the expense figures it uses to compute the charges.
According to Murphy's letter, "We are paying $101.15 per square foot for space immediately adjacent to other commercial customers paying as little as $11.43 per square foot."
Port Authority officials would not release the expense figures.
In a telephone interviews from New York, Sagner responded by calling Trailways' president Murphy "just a hot-shot, new cost-cutter. We entered into a contract with Trailways for their use of terminal facilities, and it was entered into by consenting adults," Sagner said.