Beating $4 Gas with a $1 Bus

Alonzo Parks is the last person to hop on the shiny black and orange bus parked across the street from Madison Square Garden in New York City. A recent graduate of Howard University, he’s still looking for a full-time job, so saving money is important to him. But a comfortable ride matters too. That’s why Parks, 27, says he recently switched from taking the Washington-bound Chinatown bus to the new BoltBus, a joint venture between industry leaders Greyhound and Peter Pan that began operations in March. “It’s brand-new, there’s a lot more room between the seats and they have wireless Internet access,” he says.

Spurred partly by the soaring cost of taking the car on that weekend road trip, bus ridership is up across the country for the first time in 50 years — a 13% increase this year compared with 2006, according to a DePaul University study. Now major operators are vying for a slice of the growing market for non-stop service between major cities — previously the purview of niche operators catering primarily to immigrants and low-income populations. Both BoltBus and Megabus, which is owned by the Scotland-based Stagecoach Group, are winning over new customers with sleek coaches touting $1 fares from New York to D.C., Chicago to Cleveland and Kansas City to St. Louis. More than a cheap ride, the vehicles feature amenities unheard of on traditional bus lines — including real flush toilets, wider seats and power outlets for all.

Not all seats cost $1, of course. Megabus, which launched in the U.S. in 2006 and has carried more than one million passengers since then, guarantees just two seats on each bus for a dollar. Then prices inch up to $7, $10, $15 and $20, before topping out at $25 on the longest routes. (BoltBus guarantees just one $1 seat per bus. “It’s our marketing gimmick,” admits Peter Picknelly, president of Peter Pan, which co-owns Bolt. Still, even the top prices are a bargain compared to Greyhound’s standard $43 fare between Minneapolis and Chicago or $40 fare from Washington to New York City. The rides are also quicker than Greyhound because there are no stops along the way. And though cheap bus lines that run from New York City’s Chinatown can compete in price, they don’t have the same amenities or offer a guaranteed, reserved seat.

The new lines can pair skimpy fares with plush seating because they keep their overhead to a minimum. BoltBus does curbside pickup (instead of paying to park at a mass transit station) and books most of its tickets online (which eliminates accounting costs). Since it’s a joint partnership between existing bus companies, it needed only to invest in new buses and drivers to start up. There are no print or billboard ads; marketing is largely word-of-mouth — Parks learned about it from his girlfriend in New York, whom he takes the bus to visit from D.C. twice a month.

Bus travel has not been an easy sell everywhere. Megabus recently announced that it was ceasing its Los Angeles–based West Coast operations due to lack of riders. “It was more of a challenge to get people out of their automobile than it was in other regions of the country,” says Dale Moser, Megabus’s president and chief operating officer, who notes that his Midwest routes are solidly profitable and have doubled its customers over the past 12 months. This spring, Megabus began serving Boston, Buffalo, Philadelphia, New York, Washington and Toronto. BoltBus had 70,000 riders in its first two months of operation in the Northeast and is 30% ahead of its internal projections for its business. “We view our competitor as the passenger automobile,” says Picknelly. “For a lot of people, the last time they took a bus was in grammar school.”

The jump in gas prices has increased the cost of doing business for these bus companies. But that has been largely offset by the boost in ridership — so even though fuel is the second highest cost after salaries, the high cost of gas has not hit the bus companies as severely as it has the airlines.

To get the best deals, riders should book as far in advance as possible. Parks wound up spending $25 for his BoltBus trip, because he paid the driver in cash as he boarded — more than the $20 he normally pays for the Lucky Star bus from Chinatown. But as the 6-foot-tall political science grad stretched out in his seat and caught up on election news on his laptop, he didn’t seem to mind . “I would definitely take it again,” he said.