Years ago, when the Mountain Views Supervisory Union would bid for student busing services, officials would get several competing offers to pick from, the district’s superintendent recently pointed out.
Now, the district is lucky if they get a single bid, Superintendent Sherry Sousa said. And they’re not alone.
Over the past decade, Vermont has seen fewer and fewer companies available for student transportation services, according to interviews with school superintendents and administrators, and a report by the Vermont Agency of Education.
This has limited school districts’ ability to negotiate contracts at competitive prices. The Agency of Education’s report, released in December, highlighted the “rapidly rising and unpredictable cost of transportation services, driven in part by limited vendor competition.”
In a survey of supervisory unions and supervisory districts last year, officials described year-over-year cost increases ranging from 20 to 35 percent, “with some projecting even steeper future growth,” according to the agency’s report.
Without competition in the market, Sousa said it “makes it really hard to negotiate a contract that meets the needs of our communities and is fiscally responsible.”
Now, with the Legislature’s focus on education reform, transportation will almost certainly be on lawmakers’ minds. Act 73, Vermont’s generational effort to reform the state’s public education system, calls for consolidating the state’s 119 school districts and the 52 governing units that oversee them.
But it’s anyone’s guess what that consolidation could look like, or if lawmakers will even agree on a proposal. Issues with transportation will only make that endeavor more difficult.
Meanwhile, the few school transportation companies operating in the state have been bought up or are controlled by private equity companies.
At least four companies that are contracted with school districts in Vermont — including First Student, Butler’s Bus Service, Bet-Cha Transit and Mountain Transit — are owned by private equity companies, sparking worries about service quality among advocates.
Compounded by a general shortage of drivers, the state of the industry has made busing students all the more difficult, particularly for school districts in more rural areas.
“I think this is one of those sleeper issues,” said John Castle, the executive director of the Vermont Rural Education Collaborative and a former superintendent of the North Country Supervisory Union. “You contract out with a mega company that can do this. But how responsive are they to your needs? And at some point, when they control the market, they’re gonna jack up the price, and you’ve got very little say in what you can do.”
‘Not a whole lot of providers’
Vermont’s school districts are required by state law to adopt a school transportation policy but are not required to provide student transportation.
The school districts that do provide transportation can get funding from the state’s transportation reimbursement grant program. Districts may apply to get 50% of their transportation costs covered but are limited by a statewide cap of about $25 million.
With a lack of competition, districts are left negotiating with companies from a position of limited leverage, contributing to disproportionately high per-student costs, according to the Agency of Education’s report.
It’s not clear how many school bus companies operate in the state, or how many districts offer transportation services. The Agency of Education does not track which school bus companies contract with school districts, nor does the state’s Department of Motor Vehicles, which manages the inspection of school buses and issues licenses to drivers.
One prominent company operating in Vermont is First Student, the largest student transportation service provider in the country, which was purchased by the private equity firm EQT Infrastructure in 2021 in a $4.6 billion sale.
First Student is contracted with the Washington Central Unified Union School District, which serves students in Berlin, Calais, East Montpelier, Middlesex and Worcester.
Steven Dellinger-Pate, the district’s superintendent, said First Student’s service has been satisfactory, but he is concerned with the lack of competition in school bus vendors.
“There’s just not a whole lot of providers in Central Vermont,” Dellinger-Pate said. “We have not always had other vendors bid for transportation contracts in the past, so, you know, we certainly appreciate competition where it exists, but we don’t always have that in our transportation bids.”
First Student spokesperson Brenna Rudisill wrote in a statement that the company is operating all planned routes and actively recruiting to offer competitive wages and benefits to increase staffing levels to continue to meet daily service needs. First Student and EQT Infrastructure did not immediately respond to subsequent inquiries on scant vendor competition and the impact of private equity on the student transportation landscape.
Brooke Olsen-Farrell, superintendent of the Slate Valley Unified Union School District, said only one company, Bet-Cha, responded to the district’s last two bids for service. This is despite the supervisory union hiring a transportation consultant to drum up more bids across the Northeast, she said.
Olsen-Farrell said her district faces similar school bus workforce challenges and concerns with lack of vendor competition identified by the Agency of Education’s report.
“This year seems to be a little better than previous years, but there’s many years where we have had to combine runs (or) cancel runs due to lack of drivers,” Olsen-Farrell said.
Bet-Cha is owned by Student Transportation of America, which is owned by pension fund managers La Caisse and Ullico, according to Student Transportation of America spokesperson Mitun Seguin.
Student Transportation of Vermont — the company’s arm here — works with 30 districts and communities, either through direct contracts or through the local divisions Student Transportation of America owns and operates: Bet-Cha Transit and Mountain Transit.
La Caisse and Ullico both invest in private equity globally. But “unlike traditional private equity investors,” Seguin wrote, the pension funds have long-term interest in investments made — like Student Transportation of America’s operations in Vermont.
There are “pocket areas of shortages” for bus workers, but Student Transportation of Vermont has invested in recruiting and retention efforts and has maintained adequate levels of staff, and Seguin rebuffed claims of a shrinking school transportation vendor pool.
“It is important to note that there is, and always has been, competition among privately owned student transportation companies in Vermont,” Seguin wrote.
Orleans Central Supervisory Union contracts with Butler’s Bus Service, which in January 2025 was purchased by Beacon Mobility, a national company operating in 25 states that is backed by private equity firm Audax Private Equity.
Jacquelyn Ramsay-Tolman, the Orleans Central superintendent, said staffing and scheduling problems caused routes to be canceled around four times in the first weeks of the school year.
Butler’s Bus Service representatives were communicative through the challenges, and route cancellations issues have since been resolved, although bus staffing for afterschool activities remain a concern, Ramsay-Tolman said.
Sousa, the Mountain Views Supervisory Union superintendent, which is also contracted with Butler’s Bus Service, said her district, too, has had trouble staffing routes due to a shortage of drivers.
Sousa said Butler’s is the only game in town. While she said the company is reliable, difficulties often arise due to driver shortages. The district was unable to support a school bus route for two months due to labor shortages that “put a huge pressure on families and on the school.”
“There are times, at least once a week, where a driver calls out sick, and within hours we have to inform families that there will not be a bus route,” she said. “It really makes it hard for our families when we don’t have the resources to meet the commitment we’ve made to those families.”
Private equity’s impact
Private equity’s presence in the market has generated concern among advocates and school officials around the quality of service available to school districts. Some fear it could magnify workforce shortages and the small vendor pool.
Azani Creeks, a labor issues researcher and campaigner for the nonprofit Private Equity Stakeholder Project, said the trend is part of an emerging pattern at public schools of outsourcing and privatizing systems like health care, data management and food services to private-equity-affiliated companies.
Private equity companies have been investing in the student transportation sector for at least 15 years, Creeks said, according to tracking by the Chicago-based watchdog organization.
She pointed to a National Education Association article that argued that private outsourcing of student transportation negatively affects student safety and community accountability.
Employees often experience a shift in working conditions when private equity takes over, and private-equity-backed companies employ union busting tactics at higher rates, Creeks added.
Bus workers for the transportation company Travel Kuz experienced this firsthand. The company, which has a contract with the Windham Southeast Supervisory Union, locked out its Vermont workers right before this school year started at the end of August.
Travel Kuz — which was formerly called F.M. Kuzmeskus — was acquired by private-equity-backed firm Beacon Mobility, in 2022. Beacon Mobility did not respond to an email request for comment.
The union bus workers and the company eventually came to an agreement but only after nearly two weeks of an escalating labor dispute.
Since the purchase, the Vermont bus workers who the Teamsters Local 597 union represents saw worsening conditions and operations before the contentious contract negotiations, according to the Vermont Teamsters Local 597 President Curtis Clough.
“The way they operate came with the private equity fund, because F.M. Kuzmeskus was a very, you know, tightly run, very organized company a few years ago,” Clough said. “They were starting to pay late. They started to pay the wrong rates. They started to not give people raises on time. They started to charge the wrong amount for health care.”
‘Dependability of our transportation system’
While many districts contract out transportation services, some Vermont school districts, like South Burlington and Champlain Valley, operate their own systems — albeit not without their own workforce challenges.
Jean-Marie Clark, the South Burlington School District’s director of finance and operations, said having an in-house fleet with drivers on staff allows the district a certain level of flexibility and control that they may not get with a third-party company.
“It feels like we are in control of what’s happening and what routes are running and what routes aren’t running, as opposed to that being told to us,” she said.
Staffing shortages remain a persistent issue, officials said, although some districts have found more stability after they increased wages.
Gary Marckres, the chief operating officer with the Champlain Valley School District, pointed to the “stability and quality” provided by having drivers on staff. His district pays first-year drivers a starting wage of $37 an hour, while drivers with the South Burlington school district who have been employed for more than a year make $39.46 an hour, Clark said.
“I’m not saying that the contracted bus drivers are bad, but these are our drivers and mechanics — they’re our employees,” Marckres said. “They’re part of that team that helps us engage with students. They have consistent routes. They know the kids by name. It’s really about engagement and quality and dependability of our transportation system, which I think is the largest advantage.”
But for many districts in the state, operating a fleet or keeping drivers on staff is not a financial reality.
For years, the Colchester School District owned its own fleet of school buses, according to Amy Minor, the district’s superintendent. But she said they eventually moved away from owning their fleet to save money. They now contract with Mountain Transit, one of the local divisions operated by Student Transportation of America.
In the Mountain Views Supervisory Union, Sousa said operating its own school busing system would require a full-time employee. The district would also have to weigh the cost of depreciation and maintenance on a fleet of vehicles — something the district wouldn’t be able to afford.
In labor leader Clough’s mind, the lack of school bus vendors has an upstream cause: school districts’ practice of choosing the lowest bidder.
By solely looking at price, Clough said the districts make it more difficult for smaller transportation businesses to compete and makes it more likely the smaller company will be bought out by larger firms that may have private equity ties — shrinking the pool of vendors further.
The cost of owning and maintaining buses and establishing depots is a “hurdle” for smaller companies starting up in the state and submitting a bid for a student transportation contract, Olsen-Farrell, the Slate Valley superintendent, said.
While the contracts may cost more, Clough said local, smaller bus companies’ bids may be better in other ways, like providing better services and wages for workers. This, in turn, may help in recruiting bus workers during an ongoing labor shortage.
“You can get yourself in a situation where you’re creating an uncompetitive environment, because the only thing that the bus companies have to concentrate on is cost,” Clough said. “We need to be willing to invest in local companies to do this.”
