Baltimore is suing the operator of the city’s free shuttle bus service alleging the company, Transdev North America, overbilled it by more than $20 million.
The lawsuit, filed in Baltimore Circuit Court, alleges that over the past eight years Transdev billed the city for thousands of hours more than were actually worked to provide the bus service known as Charm City Circulator. The city is seeking compensation for the alleged overbilling.
The Charm City Circulator consists of a fleet of buses that provide service on four routes in the city’s central business district. Transdev also operates bus and paratransit services in the Washington region.
Baltimore City Solicitor Andre M. Davis said the city will seek damages “to make taxpayers whole” when companies violate contracts and overbill or underpay the city.
“This lawsuit is wholly consistent with our duty to serve as responsible stewards of taxpayer funds and hold accountable companies doing business with the city who fail to live up to their contractual obligations,” Davis said.
Scott Hagen, a spokesman for Transdev North America, said in a statement that the company is “extremely disappointed that the City of Baltimore elected to pursue this meritless litigation."
The statement continues: “This issue began when Transdev won the bid to operate the Charm City Circulator in 2010. The City was required to provide the full fleet of buses but was unable to do so because it selected nonfunctioning vehicles with unproven technology from a company that ultimately went bankrupt. Because the City was unable to meet the terms of the contract, Transdev agreed to the City’s request for a new contractual and invoicing structure. For months, Transdev has actively engaged city officials to address their concerns and provide them with the relevant facts and documents, which makes this baseless lawsuit a complete and utterly nonproductive surprise.”
Transdev, a French transportation company, is one of the largest private transit providers in North America, serving more than 200 cities and supporting bus, streetcar, ferry, taxi and shuttle operations. It is deeply rooted in the Washington region, where it provides bus and paratransit services for Metro.
The Washington Metropolitan Area Transit Authority recently outsourced about 5 percent of its bus service to Transdev through a five-year, $89 million contract. The company also provides about 50 percent of the agency’s MetroAccess paratransit service for the elderly and people with disabilities. It is one of three companies that provides vehicles and drivers for the service.
The allegations against Transdev are likely to fuel growing criticism of the privatization of transit services in the region as cities turn to private contractors to save money. Labor leaders have called the privatization a “failed concept” that they say results in declining service and safety and in poverty wages for workers. Labor unions and faith-based groups across the Washington region have been pushing to return transit jobs to the public sector, without much success.
Larry Hanley, international president of the Amalgamated Transit Union, which represents thousands of transit workers in the Baltimore-Washington region, said the charges alleged in the Baltimore lawsuit are an example of the problems with privatization. “This is criminal behavior and officers of the company who are responsible should be criminally charged,” he said. “Baltimore should end this contract immediately.”
The office of Baltimore Mayor Catherine E. Pugh (D) said in a statement Wednesday that the city’s transportation department is in the process of selecting a new transit provider to take over the Circulator services. A new three-year contract is expected to be issued next month, but in between operators, the city will use other local companies to keep the buses running.