Local Passenger Transportation, NEC

SIC 4119

Companies in this industry

Industry report:

This industry classification includes establishments primarily engaged in furnishing miscellaneous passenger transportation, where such operations are principally within a municipality, contiguous municipalities, or a municipality and its suburban areas. Establishments primarily engaged in renting passenger automobiles without drivers are classified in services, Industry Group 751: Automobile Rental and Leasing, without Drivers. Establishments primarily operating ski lifts, tows, and other recreational lifts are classified as SIC 7999: Amusement and Recreation Services, Not Elsewhere Classified.

A diverse range of transportation modes makes up this industry classification. Among the types of companies in this group are ambulance services, limousine services (with drivers), and aerial tramways and cable cars that are not for amusement or scenic use. Sightseeing buses (noncharter), vanpool operations, and hearse rentals with drivers are also classified in this industry.

One of the industry leaders in the early 2010s was American Medical Response (AMR) of Greenwood Village, Colorado, which had $2.5 billion in annual sales and more than 18,000 employees. With vehicles operating in 40 states, AMR was the largest contract provider of ambulance services, both emergency and nonemergency, in the United States in 2010. Another major nonemergency ambulance service provider was Rural/Metro Corp. of Scottsdale, Arizona, which had almost 8,000 employees and sales of $498.8 million in 2009. Founded in 1921, Washington, D.C.-based Carey International Inc. provided chauffeured vehicle services, mostly to business travelers, in 65 countries. Annual sales in the mid-2000s were about $230 million with 700 employees. Finally, VPSI Inc., headquartered in San Jose, California, was the world's largest vanpool service with more than 5,000 vans in operation. VPSI had annual sales of $273 million in the mid-2000s.

About 21,480 establishments employed 288,600 workers in this industry in 2010. Total industry sales were $16.1 billion in 2009. A majority of the businesses operating in this industry were small, with almost 70 percent employing fewer than 10 people, but almost half the industry employees worked for establishments that employed more than 50 workers. New York employed the most workers in this industry, with 36,200. California was second, with 23,900, followed by Pennsylvania with 19,000; New Jersey with 16,500; and Texas with 15,200. Colorado, home of industry leader AMR and 6,300 industry employees, was the top state in terms of revenue, accounting for almost 20 percent of the nation's sales in 2009. New York claimed 10 percent of total sales and California, six percent. Every state in the country was home to businesses in this industry, with the fewest in Wyoming, which had 27 in 2009.

Ambulance Services.
Collectively, ambulance services in the United States generated about $7 billion a year in revenue. Following a wave of consolidation in the 1990s, two clear industry leaders emerged: American Medical Response (AMR) and Rural/Metro Corp.

The outlook for growth in the ambulance business was favorable, due to an aging population and health care reform measures, which resulted in patients being shifted between facilities more frequently. The industry faced increasing competition, however, for hospital and health maintenance organization contracts from public fire departments, whose personnel were also trained to respond to medical emergencies. Nearly 60 percent of all calls to fire departments in the mid-1990s were medical aid requests.

The Balanced Budget Act of 1997 had significant effects on the ambulance industry, tightening the criteria for Medicare reimbursement of emergency ambulance claims. By 1998, the Health Care Financing Administration had published its Medicare ambulance fee schedule and final rules for determining "medical necessity." The new rules required physician certification for nonemergency ambulance services. Most ambulance companies relied heavily on Medicare claims for business. In some states with large Medicare beneficiary populations, Medicare ambulance services could constitute as much as 60 percent of all transport revenues.

By 2002, ambulance services had to contend with increasing medical malpractice lawsuits. Unlike years ago, when ambulances were basically hospital-run vehicles, the privatization of the industry and the rising expectations for health care in general were contributing to the increase. Such lawsuits had no cap on the award amount a jury could make, and paramedics were sued under the same laws that applied to doctors. In addition, ambulance workers often had to perform their duties with the victims' families watching, a situation doctors are generally spared.

By 2010, ambulance service was a $11 billion industry. The 5,700 establishments employed 148,700 workers, although the industry was highly fragmented, with the top 50 companies accounting for about 45 percent of total revenues.

Limousine Services.
Limousine services made up another significant share of the miscellaneous local passenger transportation industry. By 1999, there were more than 9,000 limousine companies in the United States controlling a $4.4 billion industry. However, as with many other industries, there was a general decline in limousine service companies in the early 2000s following the September 11, 2001, terrorist attacks. Many smaller companies did not survive. When the economy began to rebound, the companies that had hung on saw their business increase as a result of less competition.

As the industry grew in size during the 1990s, and as the economy took a downturn during the 2000s, limousine services sought to widen their customer base by appealing to businesspeople in addition to their usual wedding and prom ridership. In particular, gains were made in the limousine industry's battle against taxicabs and shuttles for airport runs. Indeed, the cost of limousine service was not much higher than for a cab in some places. In New York and elsewhere, however, proposals to allow liveries and limousines to make on-street pickups (strongly opposed by taxicab associations) continued to be a controversial issue in the area of local passenger transportation.

Many of the companies that survived the economic downturn of the early 2000s had an increase in international business. Clients, both corporate and private, were relying on U.S. companies to arrange limousine travel on their behalf in other cities, both domestically and abroad. In addition, some companies were specializing in moving groups of people from place to place for corporate events. In the early 2000s, there was a general trend toward luxury sedans, as opposed to the stretch vehicles typically thought of as limousines. By 2010, there were 10,400 establishments offering limousines with drivers, and these firms employed 69,500 people. The Taxicab, Limousine, and Paratransit Association estimated that the United States' fleet of limos totaled 126,000.

Other Services.
In the 1990s, vanpools sprang up to fill the gaps left by ordinary forms of local transit. VPSI (formerly Van Pool Services Inc.) was founded in 1973 as an in-house ride-sharing program for Chrysler employees during the energy crunch of that year. It subsequently blossomed into a profitable company subsidiary. By 2009, 115 other companies provided similar services. Other companies found their niche in major cities such as New York and Chicago, transporting patrons between bars, restaurants, sports arenas, and other nightspots. Kids Kab, founded in 1991 in the Detroit area to take children to their various activities, was an immediate hit among suburban working parents. By the 2000s, hundreds of similar companies had cropped up nationwide.

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