Running a Bus or Motorcoach Company: The Federal Rules
Passenger carriers work under the same federal rulebook as trucks, but with different thresholds, different hours limits and much higher insurance floors. This is the map of what applies to you and where each rule lives.
Why passenger carriers need their own guide
Most trucking guides treat buses as a footnote. The differences are not small. A bus company needs authority at a lower vehicle size than a freight hauler, can need nearly seven times the liability insurance minimum of a general freight truck, drives under hours-of-service limits that do not match the property rules, and, if it runs over-the-road coaches, has accessibility obligations under the Americans with Disabilities Act that no truck operator ever sees.
This section covers the federal layer: the Federal Motor Carrier Safety Regulations (49 CFR Parts 380 to 399) and the Department of Transportation's ADA rules (49 CFR Part 37). States add their own rules on top, especially for operations that never cross a state line, and those are flagged where they matter.
Does the federal rulebook apply to you?
The trigger is the definition of a commercial motor vehicle (CMV) in 49 CFR 390.5T. For passenger work, a vehicle used in interstate commerce is a CMV if it is:
- Designed or used to carry more than 8 passengers, including the driver, for compensation (in practice, 9 or more seats counting the driver), or
- Designed or used to carry more than 15 passengers, including the driver, not for compensation (16 or more seats counting the driver), or
- Rated at 10,001 pounds or more gross vehicle weight, whatever it carries.
The commercial driver's license rules use a different, higher line: a CDL is required for a vehicle designed to carry 16 or more people including the driver, or one heavy enough to fall into Class A or B. That gap, where a for-hire 9-to-15-passenger van is a regulated CMV but does not need a CDL, is the source of more confusion than any other rule in this area. The CDL and passenger endorsement guide works through it.
Who regulates what
Four sets of rules overlap, and knowing which agency owns a question saves time:
- FMCSA (Federal Motor Carrier Safety Administration) handles registration, operating authority, insurance filings, driver qualification, hours of service, drug and alcohol testing, and vehicle inspection and maintenance.
- NHTSA (National Highway Traffic Safety Administration) sets the manufacturing standards that new buses, including school buses, must meet when they are built and sold.
- The Department of Transportation's ADA rules in 49 CFR Part 37 set accessibility obligations for over-the-road bus operators.
- States issue CDLs, regulate intrastate passenger service, and run most of school transportation.
The key federal rules at a glance
| Topic | What the rule says | Where it lives |
|---|---|---|
| USDOT number | Required for interstate passenger CMVs, for-hire and private | 49 CFR 390.19T |
| Operating authority | Required for for-hire interstate passenger service; $300 per authority type | 49 CFR Part 365 |
| Liability insurance (for-hire, interstate) | $5,000,000 for 16+ seats; $1,500,000 for 15 or fewer, counting the driver | 49 CFR 387.33T |
| CDL | Required for vehicles designed for 16+ people including the driver, plus a P endorsement | 49 CFR 383.5, 383.93 |
| Entry-level driver training | Required before a first-time P or S endorsement (since February 7, 2022) | 49 CFR Part 380, Subpart F |
| Driving limit | 10 hours after 8 consecutive hours off duty | 49 CFR 395.5(a)(1) |
| On-duty limit | No driving after 15 hours on duty, after 8 hours off | 49 CFR 395.5(a)(2) |
| Weekly limit | 60 hours in 7 days or 70 hours in 8 days | 49 CFR 395.5(b) |
| Drug and alcohol testing | Applies to CDL drivers; 2026 minimum random rates are 50% drugs, 10% alcohol | 49 CFR Part 382 |
| New entrant safety audit | By statute, within 120 days of starting operations for passenger carriers | 49 U.S.C. 31144(g); 49 CFR Part 385 Subpart D |
| ADA (over-the-road buses) | Accessible buses or equivalent service; up to 48 hours' advance notice may be required | 49 CFR Part 37 Subpart H |
| Vehicle leasing between carriers | Written lease with set contents, copy carried on the bus | 49 CFR Part 390 Subpart G |
The five guides in this section
1. Getting authority and insurance
Passenger carrier authority covers the USDOT number, passenger operating authority, the insurance minimums by seating capacity, the BOC-3 process agent filing, and the new entrant program. It also explains Motus, the registration system FMCSA has been moving all applicants into during 2026, which replaces the older Unified Registration System.
2. Licensing your drivers
CDL and passenger endorsement rules explains exactly when a CDL is required, what the P and S endorsements involve, the commercial learner's permit restrictions, and the entry-level driver training a new bus driver must finish before testing.
3. Hours of service
Passenger hours of service walks through the 10-hour and 15-hour limits, the 60/70-hour weekly limit, how the sleeper berth works on a coach, and the specific ways the passenger rules differ from the truck rules, including the absence of a 34-hour restart and a 30-minute break requirement.
4. Starting a charter company
What it takes to start a charter bus business lays out the cost categories: authority, insurance, vehicles, accessibility under the ADA, and drug and alcohol testing. It does not invent prices. It explains which choices move your costs and by how much the regulations themselves fix them.
5. School, church and private buses
School bus and church bus rules sorts out which federal rules apply to school districts, school bus contractors, churches and other non-business groups, and where state law takes over.
Practical points that catch new passenger carriers
- Seat count includes the driver. Every passenger threshold in the federal rules counts the driver's seat. A "15-passenger van" with 14 passenger seats plus the driver is a 15-person vehicle; add one seat and the insurance minimum jumps from $1.5 million to $5 million.
- "Designed or used" matters. Removing seats from a 16-person bus does not necessarily take it out of the CDL rules, which look at design capacity.
- Compensation is read broadly. A trip does not need a ticket price to be for compensation. Shuttles that are part of a paid package are a known gray area, and the CMV definition and its exemptions treat "compensation" and "direct compensation" differently.
- The audit comes fast. Property carriers often have months before the new entrant safety audit. Federal law sets 120 days for passenger carriers. Your driver files, testing program and maintenance records need to exist from the first trip. See the new entrant safety audit guide.
- Leasing a bus from another company needs paper. Since January 1, 2021, borrowing or leasing a passenger CMV from another carrier requires a written agreement meeting 49 CFR 390.403, carried on the vehicle. The main exception is when both carriers hold active passenger authority and one buys transportation service from the other.
- Intrastate is not unregulated. States regulate in-state passenger service, often through a utilities or transportation commission. California's Public Utilities Commission, for example, requires charter-party carrier authority and sets its own insurance minimums by seating capacity.
What applies in addition to this section
Several HaulBrief compliance guides apply to bus companies with no changes: the drug and alcohol testing program, Clearinghouse queries, the annual vehicle inspection, roadside inspection levels and CSA scores. Current federal fees are on the federal fee reference.
Watch
Look Before You Book — FMCSA. The video loads from YouTube only when you press play.
Questions
Do I need operating authority to run a 12-passenger van service across state lines?
If you charge for the service, yes. A vehicle designed or used to carry more than 8 people including the driver for compensation is a commercial motor vehicle, so you need a USDOT number, passenger operating authority and at least $1,500,000 in liability coverage. You do not need a CDL for that van unless it is heavy enough to fall into Class A or B.
Are bus hours-of-service rules the same as truck rules?
No. Bus drivers may drive 10 hours after 8 hours off and may not drive after 15 hours on duty. Truck drivers get 11 hours of driving after 10 hours off within a 14-hour window. The 60/70-hour weekly limits are the same, but the 34-hour restart and the 30-minute break are property-carrier provisions.
What is the minimum insurance for a charter bus company?
For a for-hire interstate passenger carrier, 49 CFR 387.33T sets $5,000,000 for vehicles seating 16 or more including the driver and $1,500,000 for vehicles seating 15 or fewer. These are federal floors; customers and states can require more.
Do the federal rules apply if I only operate within one state?
The CDL and drug and alcohol testing rules apply to intrastate drivers too. Most other federal rules apply to interstate operations, but states adopt similar rules for in-state carriers, often with their own variations and their own authority requirements.
Sources
- 49 CFR 387.33T: Financial responsibility, minimum levels (passenger carriers) — eCFR.
- 49 CFR 395.5: Maximum driving time for passenger-carrying vehicles — eCFR.
- 49 CFR Part 37 Subpart H: Over-the-Road Buses — eCFR.
- Hours of Service for Motor Carriers of Passengers — FMCSA.
- 49 U.S.C. 31144: Safety fitness of owners and operators — Legal Information Institute (Cornell).
General information, not legal, tax or financial advice. Regulations change; confirm current requirements with the agency before acting.