By offering low prices and picking up passengers curbside in hip
neighborhoods, discount bus companies have reversed a long decline
in ridership and are gaining ground on trains and planes.
The low-cost niche started with companies offering cut-rate fares
between the Chinatown sections of New York and Boston. It took off
eight years ago when major carriers such as megabus.com, a unit of
Britain's Stagecoach Group Plc, arrived, offering online bookings
and tickets as a low as $1.
"It's really a whole new mode of transportation. There's been
nothing quite like it, and it has been made possible by the
Internet," said Joseph Schwieterman, director of the Chaddick
Institute for Metropolitan Development at Chicago's Depaul
The number of daily curbside departures in the United States has
doubled since 2010 to more than 1,000, a Chaddick Institute study
found. Intercity bus ridership overall has been on the rise since
2006, after having declined since 1960, according to the National
Transportation Safety Board.
The newfound popularity is spreading to business class, with upscale
services offering non-stop intercity travel to a variety of areas
across the United States.
Portsmouth, New Hampshire's C&J bus company launched a once-a-day
service to New York three years ago for business travelers. It now
runs twice daily, with more than 2,000 passengers a month, owner Jim
Megabus.com and its rival BoltBus "have created huge new markets and
they've also created a competing mode to passenger rail," he said.
"You can move a lot of people in a big manner."
Switching to discount bus travel from planes, trains or private cars
saved U.S. consumers an estimated $1.1 billion last year, the
Chaddick study found.
The appeal was clear among a group of passengers who boarded a New
York-bound discount BestBus on a Washington street last week. A
last-minute ticket cost from $30 to $40, well below the price of
train and air travel.
"It's considerably less expensive than Amtrak and since I'm not in a
rush ... I can take the risk of there being traffic," Jane Dolkart,
66, of Washington, said as she waited to board.
Last year the number of discount intercity bus departures rose 4
percent, outpacing 1.6 percent rises both for airlines and for
Amtrak and a 0.6 percent upturn for car driving.
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The rise followed geographic expansion for buses from their core on
the Boston-to-Washington corridor and Chicago region into California
and Nevada, Texas and the South, with Greyhound Express, BoltBus and
Yo!, all part of Britain's Firstgroup Plc looking to expand.
The rapid growth has raised concerns about safety, especially after
eight crashes in 2011 in which 28 people died.
An NTSB study after the accidents found that bus mishaps overall
were infrequent. But it said that based on 2005-11 data,
curbside carriers were still seven times more likely to have fatal
accidents than conventional carriers, who generally operate out of
Oversight of discount buses had lagged because of a lack of
inspectors, low requirements for operating licenses, inconsistent
enforcement and language barriers with company employees, it said.
The Federal Motor Carrier Safety Administration shut down 110
passenger carriers last year, including the Boston-to-New York
discount companies Fung Wah and Lucky Star. Lucky Star has since
To continue their growth, discount carriers must persuade more
people that traveling by bus is not only inexpensive but as
convenient and comfortable as trains and planes.
Or as Mike Alvich, a vice president at megabus.com, put it: "The
challenge for us at megabus.com was to get people to take a bus as a
(Editing by Scott Malone and Chizu Nomiyama)
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