July 2010

Express Bus Service Drives New Rider Trends

by Nicole Schlosser, Associate Editor

MegaBus, a subsidiary of Coach USA, began operations in 2006, and was the first company to bring express service with the yield price product to the market.

Express bus services are reaping the benefits of an increase in passengers, particularly those in their twenties and thirties, opting for bus travel instead of other forms of transportation, such as rail, discount airlines or their own car.

Part of what is driving the ridership spike is that the perception of buses is changing. A drastic difference from the so-called "Chinatown buses," transportation companies, including MegaBus and BoltBus, are also redefining business travel with new technology, such as free Wi-Fi and 110-volt plug-ins for electronic devices. In addition, they are marketing to budget-conscious travelers, with a yield pricing model for seats, allowing customers to purchase a ticket for as cheaply as $1, depending on market demand, offering a more appealing experience. 

Tapping the tech-savvy

MegaBus, a subsidiary of Coach USA, began operations in 2006, and was the first company to bring ­express service with the yield price product to the market. In just slightly more than four years MegaBus' ridership has reached 5.3 million. "It's been a very robust growth and there continues to be a very significant growth in demand," says Dale Moser, president and COO, Coach USA.

Parent company Stagecoach Group, based in the U.K., had started this same initiative a year and a half earlier, first in Scotland and then England. "It was quite successful, so [they] decided we would roll it out in North America," Moser says.

Fifty-five percent of MegaBus' passenger demographic is made up of 18 to 34 year olds, whom they categorize as "young professionals."

This group tends to watch their spending on travel and is looking for value, convenience and amenities such as free Wi-Fi plug-ins for cell phones and other electronic devices; they want all those features that currently they can't always get on other modes of transportation, Moser says.

At 60 percent, the majority of the customers who use MegaBus tell the operator they would have otherwise taken their car for their trip. "We're getting what we believe to be a modal shift, getting people out of their automobiles. With fuel prices, the cost of driving your car, parking in these cities, wear and tear on your car, and just the hassle of driving in some of these cities has [caused] people to look for alternatives," Moser says. He adds that these amenities allow riders to keep their connectivity with the rest of the world while traveling economically  when going from one city to another.

In April 2006 MegaBus operated in seven cities in the Midwest. Since then, the carrier has grown its operation to 40 cities in the Midwest and the Northeast. After a recent expansion, travelers in the Northeast can now go to Pittsburgh and State College, Pa., and travelers in the Midwest can now go to Des Moines, Iowa and Iowa City, Iowa.

Moser attributes growth of the service to the additional city pairs, but adds that demand for existing services has also been growing.

BoltBus, a division of Greyhound Lines and affiliated with Peter Pan Bus Lines, began operations in March 2008. The first scheduled routes ran between New York and Washington, D.C. Soon after the launch, the carrier had to implement new schedules including from New York to Boston, Philadelphia and Baltimore, due to a surge in demand.

In 2009, BoltBus transferred more than 1.4 million passengers. Timothy Stokes, company spokesperson, says the company has seen year over year growth in passenger numbers. "The majority of our riders are in the 18 to 34 age range. They're technology-savvy. Most have a college degree or are pursuing one," Stokes says.

BoltBus attracts a high number of college students and young professionals with free Wi-Fi, power outlets, and extra legroom. The majority of their passengers tend to carry a laptop or a data-enabled phone. To further accommodate their tech-savvy riders, the carrier launched BoltBus mobile, allowing them to buy a ticket from their mobile phone. "We have seen a sizable increase in sales [since], further proving that our customers tend to be technologically savvy," Stokes says. Tickets start at $1 plus a booking fee, and prices increase on market demand.

The carrier also simplifies operations with their boarding process. Riders can order tickets online, and then print out and bring the form or show the ticket confirmation on their phone.

In addition, the transportation provider rewards customer loyalty with their "Bolt Rewards" plan. After taking eight trips on BoltBus, a rider receives one free one-way ticket. "Our customers are looking for value and a good deal. The experience on the bus is important to them. I believe our pricing is something that attracts our customers," Stokes says.

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