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Megabus comes to America!

Megabus comes to America!

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Old Mar 23, 06, 10:52 am
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Exclamation Megabus comes to America!

Megabus (http://www.megabus.co.uk/us/) is now offering service to :

Milwaukee
St. Louis
Cleveland
Minneapolis
Columbus
Cincinnati
Detroit
Indianapolis

from it's hub @ Chicago Union Station.

Tickets starting a $1.00 + $.50 booking fee. This should get Greyhound's attention...

Could this be the beginning of UK-based low cost transport (i.e. Ryanair) coming to the States?
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Old Mar 23, 06, 3:23 pm
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I went to there website, and low-and-behold, it was 2.50 for a RT MSP-CHI. Is this real?

Has anyone tried it?
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Old Mar 23, 06, 4:02 pm
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Considering that the Press Release on the web site that announces the service is dated March 22, 2006, I'm guessing nobody's tried it yet.

But I can't wait to hear from the first FT'er who does! I'm near Detroit and would LOVE to hear that this is for real.
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Old Mar 23, 06, 4:06 pm
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Yes, it is for real. They are a brand of Stagecoach Group (http://en.wikipedia.org/wiki/Stagecoach_Group) a big transport operator. Their Megabus service has been running in the UK for at least 2 (if not 3) years now and seems to be doing well with it.

http://www.stagecoachplc.com/ also gives a good idea of their scope.
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Old Mar 23, 06, 9:25 pm
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First scheduled service appears to be April 10. A buck for a 300-400 mile trip? This is true business insanity. The only thing I can think is that they're going ultra loss leader to build market share. Hope they have enough capital to burn through to begin with.

Looks like it could become a favorite of college students. The Minneapolis stop is at the University of Minnesota.
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Old Mar 23, 06, 11:22 pm
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[QUOTE=NWA_5479]I went to there website, and low-and-behold, it was 2.50 for a RT MSP-CHI. Is this real?
[QUOTE]

For the dates I checked in April, it's $1 CHI - MSP, and either $1 or a whopping $8, depending on the departure time, for the return. I'd say a rate of $2 - $9 round trip for CHI-MSP is pretty darn good! (I also assume these fares can't possibly last.)

I sure like the change policy: "A 50 fee is charged for all reservations. For changes to existing reservations a 50 change fee and a 50 new reservation fee will apply." Take note all you airlines who charge $100 to change a ticket!
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Old Mar 24, 06, 7:26 pm
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hmm... I am seriously thinking about taking one for the team and trying out their IND-CHI service. ($2 roundtrip...)
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Old Mar 26, 06, 7:38 pm
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This is most certainly legit and real, and I'm sure the $1 fares will continue for a long time to come. The UK MegaBus service has provided plenty of 1 pound seats ever since they began. Right now, they're even offering 1000's of free seats (+ booking fee) from Scotland to London. That's at least 7 hours on a bus for $.50
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Old Mar 26, 06, 8:44 pm
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That'll be the death for Amtrak and Greyhound on many of their routes.
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Old Mar 26, 06, 9:32 pm
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Originally Posted by ScottC
That'll be the death for Amtrak and Greyhound on many of their routes.
Since they obviously can't make any money charging those rates, they are obviously intro .... in other words, if you are looking for travel in that part of the world, book now, before the real prices take hold.

Of course it's possible that they will try to undercut Amtrak and Greyhound, but there's no way on God's green earth anyone can make a profit charging those fares

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Old Mar 26, 06, 10:00 pm
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Originally Posted by emailkid
Since they obviously can't make any money charging those rates, they are obviously intro .... in other words, if you are looking for travel in that part of the world, book now, before the real prices take hold.

Of course it's possible that they will try to undercut Amtrak and Greyhound, but there's no way on God's green earth anyone can make a profit charging those fares

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People said the same about Ryanair, and they are still in business, more profitable than many mainline airlines. Stagecoach is a very smart company, they obviously know exactly what they are doing.
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Old Mar 27, 06, 6:16 am
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Originally Posted by ScottC
People said the same about Ryanair, and they are still in business, more profitable than many mainline airlines. Stagecoach is a very smart company, they obviously know exactly what they are doing.
I agree that it's worth waiting to see whether Megabus sinks or swims. They're following a model very similar to the low-cost airlines, at least the ones that stay solvent in the long term: provide no-frills, low-cost service that just barely turns a profit after maintenance, gas, and the bus driver's salary. The sketchy Chinatown buses that run NYC-Washington DC have been offering similar deals for years with great success. And almost every single Megabus is near to, or is, a college town, so they have an instant clientele.

Amtrak and Greyhound are still going to attract a lot of folks who fit in these non-savvy travel categories:

1. People who are unwilling to commute to the Megabus bus stop. For example, people in Ann Arbor are already grumbling about the 50-minute drive to the Detroit Megabus stop.

2. People who think Megabus will attract a "worse crowd" than Amtrak and Greyhound. I don't think that's so, but non-savvy travelers think these sorts of things.

3. People who think it's too good to be true and would rather pay more for an established service.
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Old Mar 27, 06, 5:36 pm
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Originally Posted by jlm4dg
I agree that it's worth waiting to see whether Megabus sinks or swims. They're following a model very similar to the low-cost airlines, at least the ones that stay solvent in the long term: provide no-frills, low-cost service that just barely turns a profit after maintenance, gas, and the bus driver's salary. The sketchy Chinatown buses that run NYC-Washington DC have been offering similar deals for years with great success. And almost every single Megabus is near to, or is, a college town, so they have an instant clientele.

Amtrak and Greyhound are still going to attract a lot of folks who fit in these non-savvy travel categories:

1. People who are unwilling to commute to the Megabus bus stop. For example, people in Ann Arbor are already grumbling about the 50-minute drive to the Detroit Megabus stop.

2. People who think Megabus will attract a "worse crowd" than Amtrak and Greyhound. I don't think that's so, but non-savvy travelers think these sorts of things.

3. People who think it's too good to be true and would rather pay more for an established service.
Some already heavilly subsidized lines like the Amtrak Chicago-Milwaukee line can't last long... That trip is $21 each way, and service is spotty at best. Stations are outdated and services very limited.
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Old Mar 28, 06, 10:44 pm
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Originally Posted by mellowg
This is most certainly legit and real, and I'm sure the $1 fares will continue for a long time to come.
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.
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Old Mar 29, 06, 5:39 am
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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.
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