After 10 people died in a charter bus crash in California, state lawmakers last year tried to tighten safety regulations. But State Senator Ricardo Lara said that when he proposed sweeping measures recommended by the National Transportation Safety Board, such as installing safer windows and keeping data recordings of trips, he ran into legal hurdles because when it comes to buses federal law pre-empts local law. In the end, the state adopted far weaker legislation requiring bus drivers to instruct passengers on using emergency exits and safety equipment and mandating that charter buses built after July 2020 be equipped with automatic emergency lighting.

“It is frustrating that local legislatures can’t do more to make buses safer, even if it just means putting recommendations made at the federal level into state law,” Mr. Lara said. “We got the most we could with safety lights and training for passengers, but our hands were tied by outdated federal safety regulations.”

The chief obstacle in trying to drive out a company like Yep, Mr. Marlow said, is the patchwork system of regulation and oversight by federal, state and local governments. The main regulator of buses that run across state lines is the federal Department of Transportation, but aside from compiling performance data on companies, the agency rarely penalizes bus lines for repeated safety violations. The states have licensing powers, but local agencies do not have many tools to limit the activity of these companies.

Indeed, lawyers for Yep Tour, which is incorporated in Massachusetts, cited the commerce clause of the United States Constitution when they sued New York City in February for refusing to grant the company a permit. They argued that the city had no right to interfere with an out-of-state company’s interstate operations.

The suit was settled in April when the city relented and gave Yep a six-month permit. Jeremy Walker, Yep’s owner, said his company paid $172,000 to get its buses back and had paid at least $150,000 in weekly installments toward paying off all of its fines.

Mr. Walker said “there were some issues” with the way Yep operated, but he said he had taken an aggressive approach, including retraining his drivers and punishing them for getting caught speeding. He said he hoped that the city would approve a renewal of Yep’s permit because the company is providing a service by offering low-cost transportation.