The Megabus Effect

http://www.businessweek.com/magazine/content/11_16/b4224062391848.htm

by dangoldin • 15 years ago

63 35 15 years ago

ams6110• 15 years ago

Short summary: Megabus are one of a few companies operating low-overhead, curbside pickup intercity bus service.

"On most city-to-city trips under 300 miles, the curbside bus offers tickets that cost a tenth of those of Amtrak and far less even than the price of the gas to get there by car."

Passengers book online, tickets are delivered to cell phones, busses are equipped with WiFi and power outlets at each seat.

Article points out the advantages of busses over high-speed rail, which has tended to get more press as being the future of mid-haul intercity travel. Building rail lines requires years of time and bureaucratic approval, and you better hope you were right about the demand for the route. Busses can go wherever needed on existing roads and reconfigure routes easily.

jnw2• 15 years ago

Even lengthening existing Amtrak trains can take years of time and bureaucratic approval. The design of the Acela trainsets is such that Amtrak could add four more business class cars, which would double the number of business class seats per trainset, while keeping the current power cars.

Transportation improvements over time tend to make some trips possible in much less time than was previously possible; this is true of the automobile, the Interstate highway system, the jet airplane, and the Golden Gate Bridge. Nobody has demonstrated a 150 MPH bus running on the existing Interstate highway network yet. High speed rail has the potential to increase the distance that can be covered in a 60-90 minute commute.

melling• 15 years ago

Boston, NYC, Philly, and Washington DC could all be commutable with existing technology. It'll probably take 25 years before we decide to build it. This went live in 2004: http://en.wikipedia.org/wiki/Shanghai_Maglev_Train

anamax• 15 years ago

> High speed rail has the potential to increase the distance that can be covered in a 60-90 minute commute.

Yes, but at what cost?

And then there's that pesky "and how many people will benefit?" problem.

awakeasleep• 15 years ago

Just to put the lid on the kettle here, WIFI works on about 1/10 Megabus trips.

ENOTTY• 15 years ago

Does the power strip work? Given the ubiquity of 3G coverage, I don't mind lacking wifi that much anymore.

_delirium• 15 years ago

> Busses can go wherever needed on existing roads and reconfigure routes easily.

This can be a pro, but also a con; in particular, it means people are unable to assume stable routes when planning things like new developments or where to live/work. Bus routes change all the time, but I can count on the subway station near my apartment probably still being there in 10 years, and probably still running roughly the same line as it does now.

Anechoic• 15 years ago

>Article points out the advantages of busses over high-speed rail, which has tended to get more press as being the future of mid-haul intercity

It doesn't have to be an either-or situation, as both modes have their strengths and weaknesses. For example, while bus is cheaper than rail, it still has to deal with the same problems that automobile traffic has to deal with (weather and traffic delays being the most common). HSR is more expensive than bus, but is faster (talking about real HSR, not the Acela) and it's cheaper to add capacity.

That said, buses and HSR are complementary in lots of ways and there's no reason why they can't work together (just like no one is asking people to choose between buses and cars, we can have both). One example is the joint-ticketing arrangement between the Amtrak Downeaster (Portland ME) and Concord Coach Lines. Buy a bus ticket and miss the bus? Just jump on the next train (and vice versa).

epistasis2• 15 years ago

I vastly prefer these busses to air travel for routes like New York to Boston. Lots of space, lots of comfort, Internet, power, nobody groping my body (at least not anybody in uniform), don't have to undress or wait in long lines, and probably 10x more eco-friendly.

eftpotrm• 15 years ago

probably 10x more eco-friendly

I don't claim to have done the numbers myself, but during the volcanic shutdown last year, More Or Less' (http://www.bbc.co.uk/programmes/b006qshd) presenter was stranded on the far side of Europe and calculated the emissions cost of travelling back overland by various means as he did. The answer - it was roughly level; the problem wasn't so much the plane as the long-distance travel.

epistasis2• 15 years ago

I'd love to see the numbers on this, I agree that it's usually long-distance travel that's the problem.

A typical single passenger automobile trip has about equivalent CO2 emissions, per-passenger, as a typical jet trip. (At least whenever I've run the numbers.)

But since the bus ride is less than the cost of gas for an automobile, I would think that the bus must be per-passenger somewhat more efficient. It's hard to get much of a discount on commodities like fuel.

danielharan• 15 years ago

CO2 emissions depend on distance travelled, since take-off consumes a lot more than being at cruising altitude - short-haul is about 50% more costly. This doesn't take into account increased impacts from night travel for planes, or that buses will tend to be fuller.

See e.g. http://www.greenrationbook.org.uk/resources/footprints-air-t...

jberryman• 15 years ago

I started taking the megabus from Cleveland to Chicago in 2006 or so. It was kind of ridiculous how much better and cheaper it was than any other way of getting to the places it went.

ghurlman• 15 years ago

The Bolt Bus from NYC to Boston and back for $30 round trip was one of the best decisions I'd ever made. Clean, quiet, and room enough to get my work done along the way.

desigooner2• 15 years ago

FWIW, in the multiple times I've taken these buses between Boston <-> NYC, the wi-fi on Bolt Bus seems a lot more reliable than Megabus.

brianbreslin• 15 years ago

In the article they mentioned an old greyhound promo of $99 for 99 days of unlimited travel. Anyone know if the us equivalent of eurail passes exists? Or the modern bus equivalent?

desigooner2• 15 years ago

IIRC correctly, Greyhound has/had passes for a certain duration that allowed you to travel any place, any number of times within that time period.

nigggle• 15 years ago

What a coincidence, just got off an over night Megabus one hour ago. However here in the UK they do not seem to have Wi-fi which is a great shame. Also they are normally very cramped here, so much so sometimes people are left to sit on the stairs whilst going down motorways or they call a bloke in a car to drive down the one or two extras ( which happened on my trip today ).

But in the end the price really does make up for it, and also each trip always has some weird goings on which is always fun. For example one trip there was a man who could not speak english at all who proceeded to drink himself stupid, get off at a random service station on the M6, fall asleep on a bench and refuse to come back on the bus. What a horrible morning he must have had.

boredguy8• 15 years ago

What does "curbside pickup" mean in this context?

And I've often wished for an LA->LV option that wasn't either shady or as expensive as the cost of a Southwest ticket.

natrius• 15 years ago

Instead of picking up passengers at a bus terminal like Greyhound buses do, these services pick up passengers at designated points in each city without any real infrastructure.

nkurz• 15 years ago

There are some Mexican bus lines that do this route, and while their terminals aren't in great locations, they aren't shady. No on-board Wifi or anything, but the experience is usually more pleasant than Greyhound. Check out http://www.eplalimo.com/

JCB_K• 15 years ago

I still don't understand their business model though. On the UK website, I've never seen prices over £5. Multiply that by often not completely filled up buses, say 50 people, and you've got 250 pounds for a 100-mile trip.

bendtheblock• 15 years ago

Same here - I remember when I was a student, everyone would use MegaBus rather than the trains as they were always much cheaper.

I've seen them remove unprofitable routes, but even then I can't figure it out, since running a fleet of buses must be a fairly costly operation.

icegreentea• 15 years ago

Did you actually attempt to buy a ticket though? On the Canadian site, the front page advertises the 'cheapest' rate, which you can only get if you buy the first couple tickets on any given ride. After that, the prices escalate (they don't hide that from you though... it just not on their front page).

corin_• 15 years ago

Megabus also have a presence in the UK, although their coaches (buses) usually leave from the same places as any other company's, often a coach station, and picking up at normal bus/coach stops.

What they also do, though, is partner with other non-discount companies, so if you get a ticket from Megabus (and their biggest selling point is that you can get fares from as low as £1), there's a reasonable chance that you won't actually be on a Megabus vehicle, they will have just sold off another company's seat that would otherwise have gone un-sold.

(Megabus is actually owned by Stagecoach, a UK company with some presence in the States, and the fact that Stagecoach is one of the biggest travel operators in the UK obviously helps them, as Stagecoach will often by the company Megabus customers travel with when there weren't enough tickets sold to justify a Megabus vehicle.)

keeptrying• 15 years ago

Private bus operators in India use the same model. It's very interesting.

Even furniture stores in India will sell you a competitors piece of furniture if he doesn't have anything you like in return for a commission.

bitsoffreedom• 15 years ago

It's a shame that here in Germany, the railway has a state-guaranteed monopoly on long-distance ground travel (this is a law that goes back to the Nazi era!)

So, there are hardly any long-distance bus routes within Germany, only to Berlin (which was an exception from the person transport law that was made in the Cold War era), and to neighboring countries.

chokma• 15 years ago

There is still hope - the government is about to abolish the state-guaranteed monopoly.

http://www.welt.de/wirtschaft/article12492654/Bahn-verliert-... [German]

Of course, public transport is a complex issue - the government as the current owner of the railway system is still trying to protect some routes, so we have to wait and see how the licensing for long-distance routes is working out.

And the Deutsche Bahn (German Railways) is also the biggest provider of bus travel, so it will be quite hard for new companies to get into the market.

frankdenbow• 15 years ago

Funny to see this as I was just researching Bolt and Megabus for a quick trip to Pittsburgh this weekend. I was really wishing there was a way to do comparison shopping with bus, train, and airline travel. Its something I would like to work on, but it seems as though the data is locked off for the time being. Would anyone else get anything out of a site like this?

roller• 15 years ago

I took a round trip on the Chicago to Des Moines route last summer, it wasn't a good experience. The wifi was spotty, apparently provided by the same 3G cell service that wasn't working on my phone. Not that it mattered, I didn't have enough room to have a laptop open in front of me. A shorter person may have had a better time. I now feel lucky every time I'm on an airplane in the spacious standard economy seats. I would have gladly payed a bit extra for "Economy Plus" on the megabus.

bturner• 15 years ago

I've had a similar experience. WiFi doesn't work, no room to use laptop anyway. Also, something be aware of, if you book a trip with a connection and your bus misses the connection, they will not take responsibility. You will be stuck where you are unless you book a new ticket. Customer service is extremely difficult to contact as well, I was in this situation and the "Sales Representative" only offered to sell me a new ticket. I couldn't even talk to anyone from customer service.

seanwoods• 15 years ago

This article reinforces the cost arguments that libertarian types have made for years against expanded subway/rail. Not even counting the regulatory hurdles buses are easier to get "moving."

johnwatson11218• 15 years ago

The thing I like about riding the bus and trains versus plains is how low tech they are. When I fly it seems like 1000 people had to work together to ensure my safety, with buses it seems like 10 or 20.

AlexMuir• 15 years ago

Stagecoach, the parent company of Megabus, began growing shortly after UK bus services were deregulated and privatized (mid 90s). Their tactic was to take the busiest (and most profitable) routes in a city and saturate them with buses, charging lower fares. The 192 route in Manchester suddenly went to literally a bus every two minutes, and Stagecoach buses were half the price of everything else.

They made losses but took nearly every passenger on the route. They then bought the company which previously ran the route and fares rapidly escalated. Manchester now has extortionate bus fares and Stagecoach run virtually all routes.

I imagine that their business model is almost identical with Megabus: sink the competition by undercutting their profitable routes, buy them out/bankrupt them and then reap your rewards.

sidenote: I used to vaguely know the chap who almost founded Stagecoach with his wife. They divorced and she took what was a small local bus company and built it up with her new partner. He started a new company called Highwayman (robs the stagecoach). It remained a small (< 8 buses) operator in scotland until he died a couple of years ago.

The Megabus Effect

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