Blue Bus lines

Unlike Rose City Transit, the "Blue Bus" companies did not have a franchise agreement with the city of Portland, because their service came under the authority of the state Public Utilities Commission. The companies were required to obtain the PUC's permission for any fare increases on routes primarily serving areas more than 3 miles (5 km) outside the Portland city limits. The employees of the four Blue Blue companies shared a common union, Local 1055 of the Amalgamated Transit Union's "Motor Coach Employees Division", and negotiations over labor contracts were undertaken jointly for all four companies. In addition to passengers, the Blue Bus companies carried freight, under a PUC-issued permit, but only on certain routes, and only some of their buses were equipped to accommodate goods.

In 1964–1965, the Blue Bus lines negotiated with Rose City Transit Company on their possible acquisition by RCT, but the two parties were far apart on a price, and never reached an agreement. In 1965, the Blue Bus consortium argued against a request by RCT for city council permission to extend certain of its routes into areas southwest of Portland that were outside the city limits, in areas served by Tualatin Valley Buses. However, the city council approved the extensions, which among other places included service in the Hillsdale, Vermont Hills, Maplewood and Multnomah districts and to Lewis & Clark College. The following year, after the city council approved another expansion of RCT service into areas then served only by "blue bus" routes – this time including extension east of the city, to Hazelwood and adjacent suburbs, as well as additional extensions in the southwest – the consortium said it would file a lawsuit against RCT and the city, to try to stop the expansion. The case was heard in Multnomah County circuit court in December 1966, and in January the court ruled in favor of the city and RCT.

Final years

In its last years, the consortium's financial situation shifted sharply. As happened with Portland's Rose City Transit and transit systems in many other U.S. cities, the 1960s were a time in which the Blue Bus lines experienced declining patronage, as private car usage greatly expanded, while labor costs were rising. Their shrinking profits made it all the more difficult for them to afford to add service to newly developed suburban neighborhoods. Net annual operating revenue (excluding revenue from carriage of goods) of $47,000 in 1964 turned into a net loss of $118,000 in 1969. Some elected officials said that a public takeover of Portland-area transit was inevitable, in order to ensure that an acceptable level of service would be maintained.

Following a period of intense disagreement between Rose City Transit and the Portland city council, and the threat of a strike and possible suspension of all service, the council took action in late 1969 which facilitated the takeover of the RCT system by Tri-Met on December 1 of that year.

Takeover by Tri-Met

Soon after the takeover of RCT, negotiations for Tri-Met to take over the Blue Bus lines began. The pace of negotiations was very slow, frustrating the Blue Bus owners, who, starting in January 1970, had been obliged to begin paying Tri-Met's 0.5% employer-payroll tax established to help finance creation of the new regional transit district. The drivers' union was also frustrated and called for a strike on July 1 if the process did not move more quickly, but later pushed back its strike deadline. The Blue Bus companies' owners wanted to sell to Tri-Met, but the two sides were far apart on price, the same situation as had existed during negotiations preceding the RCT takeover. In early August, both sides agreed to proceed with a takeover condemnation, under which process the final value for compensation to the sellers would be determined later by a court. Another delay followed, as Tri-Met waited for approval from the U.S. Department of Transportation, a "Letter of No Prejudice" assuring the agency that a takeover in this manner would not make Tri-Met ineligible for federal grants it was counting on, to help fund the acquisition; this delay again brought a strike very near. Federal approval was received on September 1, and later the same day Tri-Met announced that the takeover would proceed the following Sunday, September 6, 1970. Following a two-day period without service, to allow for relocating vehicles to Tri-Met's garage (and with most Blue Bus routes having had no service on Sundays and holidays, anyway), the first day of Tri-Met operation of the former Blue Bus service was the day after Labor Day, September 8, 1970.

At the time of the takeover by Tri-Met, average daily ridership on all Blue Bus service was only about 8,000. About 100 drivers and maintenance personnel were transferred to Tri-Met, along with 23 routes and 85 buses. With most of the Blue Lines' buses deemed by Tri-Met to be in very poor condition, the agency was already making plans to purchase 75 new buses as soon as possible.