In Bars & Clubs

The shuttle saga continues.

Bar owner struggles to keep shuttles on the road

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On the first day of Summerfest last year, the State Patrol pulled over numerous shuttle buses to ensure they were compliant with state laws. This is not the first time shuttles have been pulled over for inspection, but the volume of shuttles pulled over and the reason why was different and perplexing to some bar owners.

Linda Sackett, the owner of O'Lydia's, has two shuttles: a 22-passenger shuttle and a 28-passenger shuttle. Both were pulled over last summer and the larger vehicle was ordered off the road immediately.

Sackett was told she did not have enough insurance coverage on the bus because of its large size. Specifically, it was considered a "for hire" vehicle weighing over 10,000 pounds with a seating capacity of 16 or more (including the driver) and therefore needed to carry $5 million in insurance coverage.

This was new to Sackett, who had been operating shuttles to and from sporting events and festivals for almost a decade. Sackett had $2 million in coverage on each bus, which in the past was always deemed sufficient by the state.

To keep her larger bus on the road during Summerfest last year, she bought emergency umbrella insurance of an extra $3 million, which cost her $7,000.

"I thought the issue was over after I bought the umbrella insurance because I didn't hear anything else about this for the rest of the year," says Sackett.

In mid-January, however, Sackett received a phone call from her insurance company, Progressive, saying that they were canceling her policies because any vehicle that is "for hire" is a higher and different risk than other vehicles and therefore requires much higher premiums.

Again, the words "for hire" came up and Sackett didn't understand what that meant or why it was causing her to pay so much more – and so suddenly – for insurance. Her shuttles are free and do not require a drink purchase to ride.

"Now, just as the festival season is beginning and Opening Day at Miller Park approaches, I have been quoted a $22,500 annual premium – as opposed to $8,000 – for my two shuttles," says Sackett.

"I will be one of many small shuttle operators forced out of business, if insurance companies do not get proper clarification on what 'for hire' means."

Sackett asked state and local inspectors as well as her insurance company to define "for hire" and received differing interpretations.

"The inspectors said we are not considered 'for hire' because our service is free, but my insurance company said that our shuttle is 'for hire' because a purchase is 'implied' and because the driver accepts tips," says Sackett. "My shuttles have always been free to ride and no purchase at my establishment is required. The 'tip' is for the driver only and is entirely voluntary."

When asked for clarification, the state Department of Transportation told Sackett it is not sure what the guidelines are for determining "for hire."

"This lack of clarification allows insurance companies to gouge small carriers on premiums and is putting a lot of us out of the shuttle business," says Sackett. "I will be forced to take out a small business loan to keep my shuttles in service."

O'Lydia's is not alone in this shuttle struggle. Other bar owners were contacted and admitted off the record that they had similar experiences since the first of the year. Sackett says more will go through this problem on or around Brewers' opening day.

O'Lydia's transports hundreds of people a day during the summer to all of the Henry Maier Festival Park festivals, such as Summerfest, and to sporting events including Brewers, Bucks, Packers and Bruisers games. She says the loss of a shuttle system would be devastating to her business as well as the city.

"The impact this would have on Milwaukee is great," says Sackett. "Thousands of people rely on shuttles to avoid drinking and driving, construction hassles and high parking prices."

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