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The driver in the front sticks his hand out the window and waves to the one in the back

The difference is that it was a one-and-done thing rather than leapfrogging back and forth as it sounds like `theluketaylor` was describing.

And yes, the drivers would coordinate. (I've sometimes seen it done with a brief honk for attention followed by a hand wave.)

Why does the loaded bus’ preference matter? If you see a bus stopped ahead of you with the same route number and nobody requested that stop then just continue.