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Transportation companies feel financial pinch

Owners question why their industry has been left out of recent grants
December 24, 2020

Rehoboth Beach transportation companies have weathered the COVID-19 shutdown similar to restaurants and bars, but they feel overlooked in the latest rounds of small business grants.

Chip Thompson, owner of Atlantic Transportation Services, said he appreciated the first Delaware Relief Grant of about $46,000 his company received in October, but his industry has been left out of qualifying for subsequent grants. Businesses such as restaurants and bars have doubled their original grants through additional bonuses; a third round announced Dec. 21 states it will give grant recipients a 20 percent bonus, with 50 percent for hospitality businesses – pushing some businesses to more than double their original grant amount.

Thompson said the state considered 10 categories of businesses negatively impacted by the shutdown, with no mention of transportation companies.

“They had retail, restaurants, dentists … not one of them was transportation, and that industry has been decimated,” he said.

Thompson said he reached out to the Division of Small Business but was told his transportation business does not qualify for the latest rounds of business grants. The division is using a tax code for the charter bus industry to determine that business is disproportionately impacted, but Thompson's transportation business tax code does not match it.

“That's when it really got frustrating,” he said.

Thompson said he doesn't begrudge restaurants, bars and other small businesses for the grants they have received, but his business should qualify for additional relief, too.

Since the COVID-19 government shutdown hit in March, Thompson said, his business has been decimated. Of his staff of 18, he said he had to lay off three full-time workers and 12 part-time drivers, keeping only one part-time employee for sporadic work. The company's profit margin was down 325 percent in April and down 90 percent in May – exponentially higher than the 7.5 percent decline required by the grant program. Compared to $900,000 revenue in 2019, Thompson said his company has brought in $270,000 in 2020.

To make ends meet, Thompson said, he has sold five of the company's 14 vehicles, and has spent considerable time helping his employees navigate the unemployment process. Thompson said he personally has been on unemployment twice. He also took out credit on his home, put his home on a mortgage forbearance plan, took an early withdrawal from his IRA, ran up his personal credit card, and borrowed from friends.

Lydia Hastings, operations manager for Transit U Inc., parent company of the Jolly Trolley, said she is also frustrated that the state has excluded transportation companies from additional grants.

Besides the iconic Jolly Trolley that shuttles passengers around Dewey Beach and Rehoboth Beach throughout the summer months, the company has a total of 24 vehicles ranging from airport shuttles to charter buses. Hastings said the company's school bus service has been a saving grace as their core business struggles.

Typically, she said, the year-round business transports over 1,000 people a day. Business dropped 95 percent in April, and 70 percent through August. Overall, 2020 showed a 60 percent drop in business, she said.

“People don't want to travel. You see it at the airports; you see it on the roadways,” Hastings said. “We're just trying to survive.”

Hastings said they have done everything possible to keep their 22 employees working, and haven't laid any of them off.

But because the state uses employee layoffs as a qualifying metric to determine whether a business has been disproportionately impacted and therefore deserves a state grant, Hastings said she believes her company has been unfairly penalized.

“We worked incredibly hard to keep our employees supported ... and it feels like we're being punished for that,” she said.

She said the company received a $17,000 grant initially, but nothing since.

Thompson said he remains optimistic that the state will provide struggling transportation companies with relief. He looks at the state’s seemingly arbitrary choice of disproportionately impacted industries as the sticking point.

“My argument has been, and still is, that businesses in so-called 'disproportionately impacted industries,' specifically chosen by the Division of Small Business, qualified,” even if their business has only been impacted 15 to 20 percent, he said, while at the same time, a transportation business down 70 percent or more because of COVID-19 restrictions is not given a grant because it is not a chosen industry.

Damian DeStefano, director of the Division of Small Businesses, could not be reached for comment before the Cape Gazette's deadline.

Funding approval continues

The Delaware Division of Small Business website posted Dec. 9 that companies that applied for funding before the Dec. 4 cutoff date will be considered even if they have not been approved by Dec. 30. Grants will continue to be distributed after Dec. 30, the division states.

“The guidelines from the federal government require that any funds distributed cover expenses incurred before [Dec. 30] but do not require that all grants be issued by this date,” the division states.

Approvals for grants covering valid expenses incurred generally between April 1 and Dec. 30 may be issued after Dec. 30. The Division of Small Business said it will continue to process applications and issue approvals into January 2021.

“So, if you do not have an approval by Dec. 30, it does not mean you will not receive a grant,” the website states.

The division said since the program is now closed, the goal is to ensure all eligible applications are funded.

“Since a new application cannot be submitted, we will be working directly with applicants to correct the application you submitted. Division staff is actively reviewing all outstanding applications and will prioritize outreach based on those that need the least amount of adjustments in order to get their application into a form that can be reviewed and approved,” the division said.

 

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