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U.S. Bus Riders Surge as Free Wi-Fi Beats Driving

Megabus.com and BoltBus led U.S. curbside bus companies that boosted trips by 32 percent this year as travelers opted to leave their cars behind and surf the Internet while traveling, DePaul University researchers said.

The popularity of U.S. intercity buses picking up passengers at the curb rather than in a terminal has been growing since the industry reversed a 46-year decline in 2006, Joseph Schwieterman, director of DePaul’s Chaddick Institute for Metropolitan Development in Chicago, said in a telephone interview. Bus traffic including traditional service grew this year at the fastest pace since 2008, the institute said in a study released today.

Higher gasoline costs make driving a car more expensive at the same time as buses offer access to free Wi-Fi and cheaper fares than on planes and trains, Schwieterman said. Once viewed as a last resort in the U.S., bus travel is now attracting more affluent riders, students and women traveling alone, he said.

“Bus travel is suddenly cool,” Schwieterman said. “There’s a fatigue over driving combined with a revitalized image of the bus.”

Exceeds Airline Gains

Daily intercity curbside bus departures increased to 778 from 589 a year ago, according to a DePaul study to be published today. Scheduled departures for the total bus industry, which includes Greyhound Lines, increased 7.1 percent to 2,693. That compares with a gain of 1.5 percent for airline seat miles and 1.2 percent for rail seat miles, according to the study.

The institute’s annual snapshot of the bus industry is based on the number of industry wide departures on one Friday in December.

As bus customers come back, fares are increasing, Schwieterman said. Routes where fares of $20 or less were once common are now seeing tickets priced at $35 or $40, he said.

Megabus and BoltBus offer a limited number of seats for as little as $1 with advanced booking. Typical one-way New York-to- Washington Megabus fares range from $17 to $26, according to its website. BoltBus tickets range from $15 to $27.

Safety Questions

Regulators are questioning the safety of bus travel after 28 people died in eight crashes this year. The National Transportation Safety Board warned in an Oct. 31 study that curbside operators are seven times more likely to be involved in a fatal wreck than intercity lines with more conventional business models.

Neither of the two largest U.S. curbside operators -- Stagecoach Group Plc (SGP)’s Megabus and FirstGroup Plc (FGP)’s BoltBus, a partnership between Greyhound and Peter Pan Bus Lines Inc. -- were involved in this year’s fatal accidents. A Megabus coach traveling to Toronto crashed into a bridge outside Syracuse, New York, in September 2010, killing four.

The NTSB’s warning about the dangers of curbside buses included so-called Chinatown operators, which can operate under multiple names, the board said. The DePaul researchers don’t include Chinatown companies in their calculations because the operators tend to pool their buses, may not run them under independent brands, and may also use unmarked, leased buses, Schwieterman said.

Adding Routes

New routes helped drive growth. BoltBus set up a hub in Newark, New Jersey, with 40 daily buses to Baltimore, Boston, Philadelphia and Washington, the study said. Aberdeen, Scotland- based FirstGroup also began Greyhound Express in Chicago and on the East Coast, and plans to expand further, according to the study.

FirstGroup is experiencing across-the-board growth on U.S. routes, said Timothy Stokes, a spokesman for the company’s U.S. subsidiary based in Cincinnati. Station-based Greyhound routes are gaining as well as curbside BoltBus and luxury Greyhound Express, he said.

“People are spending their money more wisely,” Stokes said. “They’re weighing their options more wisely.”

Megabus opened new hubs in Pittsburgh, with 38 departures, and Atlanta, with 29. Its Chicago and New York hubs appear to now be profitable, the study said. Stagecoach is based in Perth, Scotland.

More traffic in existing hubs in New York, Chicago and Philadelphia is also bolstering growth, said Bryony Chamberlain, director of Megabus USA.

“We’ve come in with a product which is new and brings the long-distance, intercity buses to a new market,” Chamberlain said in a telephone interview. “It’s much nicer to be sitting there being driven somewhere than sitting in traffic.”

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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