Chinatown Bus Crackdown Makes Winners of Megabus, BoltBus

Discount companies like Megabus and BoltBus have benefited from a U.S. crackdown on so-called Chinatown lines, increasing departures 31 percent last year in the fastest growing mode of U.S. passenger transportation, according to a new study.

“It’s gone from a niche product to a national force,” said Joseph Schwieterman, director of DePaul University’s Chaddick Institute for Metropolitan Development in Chicago who led the study on the bus industry. “The only way this growth happens is when new demographics give it a try. These aren’t just buses filled with college kids anymore.”

The growth happened even with a rise in fatal bus crashes and a Transportation Department sweep in May of New York’s Chinatown bus companies, in the largest bus-safety enforcement action in U.S. history.

Total scheduled bus departures increased 7.5 percent, the most in four years, according to the DePaul study, which excluded Chinatown lines that don’t publish regular schedules.

Technology is driving the growth of discount carriers like Megabus, owned by Perth, Scotland-based StageCoach Group Plc (SGC), which added routes in Texas and California, Schwieterman said. Companies can use smart-phone alerts to inform customers of last-minute changes in pickup and drop-off locations. By using Internet-only reservations, they’re able to guarantee paying travelers a seat.

Express, Yo

BoltBus, co-owned by FirstGroup Plc (FGP)’s Greyhound Lines Inc. and Peter Pan Bus Lines, expanded beyond the East Coast for the first time, with buses running between Portland, Oregon, and Vancouver, British Columbia.

Greyhound, Peter Pan and Trailways Transportation System Inc. have reversed years of declining ridership by trying new business models, sometimes copying the Chinatown carriers who had been taking market share, the study said.

Greyhound has added niche services such as Express buses, which offer luxuries like leather seats and Wi-Fi, and Yo!, which operates between Chinatowns in New York and Philadelphia.

It’s selling tickets for Yo through Chinese-language agents in a Chinatown office. It started Crucero Direct in July to target Latino travelers between San Diego and Los Angeles.

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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