The rise of inter- and intra-city luxury buses threatens railThe eminent Bob Poole over at Reason has another insightful analysis in his Surface Transportation Innovations newsletter which I wanted to excerpt, but has so many good points I just highlighted my favorites in bold:
Bus Continues to Challenge High-Speed Rail
I've written previously about the remarkable come-back of the inter-city bus ("coach") industry this decade, as typified by the highly competitive New York to Washington, DC market, kicked off by new-entrants BoltBus and MegaBus. These services offer reserved seats, power outlets, free wi-fi, and other amenities. That plus their low fares makes them highly competitive with both the airline shuttles and Amtrak's Acela service in this corridor. But this concept has begun spreading to the Midwest and the Southeast, and is also invading some of the short-haul and commuter markets on which some high-speed rail (HSR) plans are depending for part of their fare revenue.
To begin with, Joseph Schwieterman of DePaul University recently explained to the readers of Practical Traveler (July 16, 2010) the service features that have enabled these bus services to attract a growing market share, beyond the typical inter-city bus clientele of relatively low-income people and students. These features include:
- Online ticketing-which ensures that most passengers are internet-savvy;
- Guaranteed seats-which ensures a comfortable travel experience, with no pre-trip anxiety over seating vs. standing;
- Curbside departures-which avoids the typically downscale bus stations many prefer to avoid;
- Onboard technology-again, appealing to business and professional travelers.
Schwieterman's researchers found that most of the new services of under four hours are operated as express, with no stops along the way. They also found similar services in the Midwest (e.g., Chicago to Madison, Milwaukee to Madison); in fact, about 40 cities in the Northeast and Midwest, as well as nearby Canadian locations, now have new-generation bus service.
The South appears to be the next frontier. RedCoach, owned by one of the largest transport companies in South America, is now offering daily express bus service in Florida and Georgia. The new buses seat 27 instead of 56, offering far more leg-room and including a foot rest, lap desk, and power outlet, in addition to wi-fi. Service between Miami and Orlando is scheduled at just four hours, and this month is being offered at an introductory price of just $40 round-trip. RedCoach serves six Florida cities thus far, plus Atlanta. Its expansion plans include Tampa, meaning that it will offer express service between Orlando and Tampa-an alternative to the planned $3 billion (of taxpayer money) high-speed rail line for that corridor, as well as the much more costly Miami-Orlando HSR line that proponents hope will follow. Yet like all the other express bus operators, RedCoach receives no tax money, and pays highway user taxes like all other motor vehicles do. Plus, if a particular route turns out to be a loser, it's easy for the company to shift the vehicles to other routes. You can't do that with HSR.
Luxury bus service is also entering commuter and other short-haul markets. In Silicon Valley, Bauer's Limousine Service is well-known for operating the corporate buses that transport numerous Google and Facebook employees to and from work. Recently, the company has begun offering premium commuter bus service to others in the Bay Area. Under the brand name Wi-Drive, Bauer has introduced four $500K luxury buses. For $5 to $9 per ride, the service offers leather seats, power outlets, free wi-fi, restrooms, and even coffee and pre-ordered breakfasts. In its first year, Wi-Drive buses are running at 60-70% occupancy, with routes serving destinations both north and south of San Francisco.
Another completely unsubsidized short-haul service is Disney's Magical Express, which links Orlando International Airport with the various Disney resorts. It provides door-to-door service for both people and baggage, sparing families of the hassles of lugging bags and renting cars. Magical Express averages about 6,000 passengers per day, about 7% of the airport's total. It is so popular that low-fare carrier Allegiant Air, which typically serves secondary airports, is shifting about a dozen of its flights from Orlando-Sanford Airport to Orlando International, so that its passengers can make use of Magical Express. Orlando International to Disney is one of the planned markets for the $3 billion Orlando-Tampa HSR service.
I continue to view HSR, as currently planned in the United States, as largely a solution in search of a problem to solve. Why this nation should commit tens (and potentially hundreds) of billions in taxpayer dollars to create this new mode of inter-city passenger travel, when the entirely unsubsidized luxury bus industry can do the job, is beyond me.