In 1939, the first American buses equipped with hydraulic transmissions are introduced in New York City. Up to this point, transmission technology in other parts of the world failed to achieve interlock at high speeds. However, developers at Yellow Coach Factory are able to overcome this technical problem on American hydraulic transmissions, ushering in a new phase of bus dominance tah is solidified in the post-war era. Coincidentally, 1939 also sees the first dedicated bus lane constructed in Chicago. Later, 1940 becomes the first year that bus ridership exceeds railway ridership in the U.S.

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