Originally Posted by DenverBrian
I guess...if you have starting capital to burn through. Simple math. 55-seat bus, $1 per pax, 100% occupancy, provides $55 in revenue for a 300-mile trip.
Driver, at minimum wage plus benefits, is $12/hour for 7 hours, or $84. You're in the red already.
Gas, at $2.50/gallon and 5 MPG, is $180 for the trip. A quick check of the web shows these buses getting closer to 3 PMG.
I haven't included the daily cost of the bus lease itself, insurance, cleaning costs, maintenance (tires, oil, scheduled service, required safety service, government regulations, etc.), costs of the website (not zero), marketing and advertising, the cost to procure and apply the giant mylar labels to the buses, storage costs, costs incurred when the bus uses a toll road, uniforms and food for the drivers, licenses and permits, and on and on.
This might have been an interesting financial analysis if everyone on the bus really paid just $1, which is not true.
The lowest possible fare is actually $1.50 if you account for the "reservation fee," and it appears that the $1 fares only occur with advance booking and on somewhat undesirable routes. The fare from Detroit to Chicago in early April, for example, is already up to $8 ($8.50 with the reservation fee) on the most desirable morning itinerary. So the current upper extrema for revenue may actually be 55 seats * 8.50 = $467 per trip. It's not likely that they'll make the upper OR lower extrema, obviously, but $200-$300 per trip isn't too shabby if you've got some startup capital to go through. It's certainly not bad for a pilot program that's designed to get the word out and build a loyal customer base.
Also, if you read the press carefully, Megabus is limiting itself to single-decker buses for the pilot period of their US service but will consider bringing in 97-person double decker buses if its service proves successful. With 97 people on board, now we're talking $145.50-$845.50 per bus.