Intercity bus growth provides new traffic for turnpikes

December 27, 2011
By Peter Samuel

Growth in traffic on intercity buses offers an important new source of revenue for long distance turnpikes and interstate toll bridges. A report by Joseph Schwieterman and others at the Chaddick Institute for Metropolitan Development at DePaul University in Chicago estimates that intercity bus departures rose from 2,514 to 2,693 or 7.1% in 2011, apparently indicating a strong increase in ridership. This in a year in which traffic on other long-distance modes - passenger cars, airlines and passenger rail - was rather flat.

In 2010 intercity bus growth was 6%.

Carriers that pickup and drop-off curbside - as opposed to traditional bus station operators like Greyhound - saw a 32% growth in 2011.

Curbside bus operators first made their appearance in the US around 2006, a mix of British and small indigenous companies. Led by Megabus and BoltBus they have been growing in ridership each year since, for the moment defying the dismal economy.

New amenities a draw

Schwieterman's report says 2011 was their most spectacular growth yet. He attributes it to a host of new routes opened, plus amenities such as Wi-Fi and power outlets in each seat on buses. Reserved  seat booking online has also helped. Plus many advertize more comfortable seats and more legroom.

Departures by the curbside buses rose from 589 to 778 in 2011. The two largest hubs are New York City and Chicago and the report says these are profitable suggesting the core business model is "financially sustainable."

In addition oldie Greyhound has expanded its premium "Greyhound Express" service that competes with the new mainly curbside bus companies. But overall the connectional bus station based bus lines - Greyhound, Bieber, Peter Pan and Trailways kept daily departures about constant - going from 1,925 in 2010 to 1,915 in 2011.

A number of small bus companies are expanding fast:

- Jefferson Lines based out of Minneapolis (to Kansas City, Chicago, Fargo) went from 51 weekday departures to 70

- Prestige Bus Wichita KS to Pueblo CO

- Peoria Charter based in Illinois increased service from several points to the Chicago area airports for 17 departures

There have also been withdrawals of apparently unprofitable service - Runways Transportation a company specializing in service to Florida airports (Orlando and Jacksonville.)

Megabus has hubs in New York City, Washington DC, Philadelphia, Chicago, Pittsburgh and Atlanta, the last two being new in 2011.  The Pittsburgh hub has 19 departures daily.

BoltBus is establishing a strong service out of Newark airport with direct service to Boston, Philadelphia, Baltimore and Washington DC - 40 departures/weekday. BoltBus already has a New York City hub operation but the Newark one is quite separate.

More direct services

A trend is to develop more direct services, enabling passengers to avoid changing buses. The two curbside market leaders for example are both developing direct services in the northeast that avoid stops in NYC.

BoltBus offers service to Philadelphia, Cherry Hill, New York, Newark and Boston at suburban Greenbelt MD which has Metro service from downtown DC and convenient car access via the nearby Beltway or I-95. And patrons can use the Metro parking.

The mid-Atlantic and northeast remains the area of greatest intercity with NYC-Washington DC being the busiest single city pair with smaller, new companies' daily departures:

- DC2NY 12

- Tripper Bus 16

- Vamoose 24

- Washington Deluxe 18

But there are some signs of intercity bus growth too in California/Nevada, and Texas.

By contrast Schwieterman points out airlines capacity and Amtrak showed little or no growth in 2011. Car trips are down 1%.

Part of the growth in bus usage is driven by absurdly low promotional fares and their profitability is not reported.

Bus so much more adaptable, competitive

One of the great strengths of bus over rail (editorial comment) is that new services can be instituted rather economically to test the market, and discontinued without great loss if they don't work - facilitating 'market discovery' and allowing the industry to be shaped and reshaped to better fit consumer needs.

Competition is also enhanced keeping downward pressure on costs.

But the DePaul U reporters note that several of the curbside companies have been around for several years now so are likely to be viable.

"The growth of the intercity bus network in 2011 reflects a continued change in the dynamics of American transportation that began almost five years ago. The level of investments in new routes seems remarkable when juxtaposed with the modest changes in passenger-carrying capacity of other modes. Arguably, the explosive growth of curbside service has been the most significant change in downtown-oriented long-distance travel in more than a half-century.

"Increases of fuel costs and airline ticket prices played a major role this year in making bus service appealing to the general public, especially on short-haul routes. Among curbside operators, it remains to be seen when the most recently created hubs will become profitable. It appears nonetheless that more expansion is in the works, with the California and Texas markets
especially attractive for prospective entrants. At the same time, the heavy investments in Greyhound Express suggest that the recovery of the intercity bus industry is not limited to curbside operators."

They say the new bus companies are making a strong appeal to laptop, iPad, mobile phone-equipped customers by offering a comfortable environment for them to work en route with WiFi and power outlets at each seat. Plus the fares are economical.

Of the older companies they say Greyhound appears to be winning back more affluent travelers, students, and females traveling alone with its new premium Greyhound Express, and that more new curbside routes appear likely to emerge in 2012. Still #1 Greyhound offers daily departures to an amazing 3100 destinations.

Major beneficiaries of the growth of bus seem likely to be New Jersey Turnpike, Delaware Turnpike, Maryland, Pennsylvania Turnpike, plus some of the interstate bridges like Delaware Memorial Bridge, PANYNJ crossings, DRJTBC, DRPA.

In addition to growth in intercity, there are signs of new inTRAcity services. For example in Frederick MD where we are based on the outskirts of the Washington-Baltimore metro area, there are active SuperShuttle and GoAirport van services direct to the three area airports, and curbside service down I-270 to Shady Grove Metro terminus and a Rockville business park by major 50 seater bus of Eyre Bus Service - apparently competing successfully with the state's MARC commuter rail.

full report:

http://tollroadsnews.com/sites/default/files/IntercityBusDePaulUni.pdf

http://sites.google.com/site/intercitybusstudy/home/new-annual-report-on-intercity-bus-sector

http://las.depaul.edu/chaddick/docs/Docs/Intercity_Bus_2010_Update_Final.pdf

http://las.depaul.edu/chaddick

http://www.greyhound.com/en/buses/

TOLLROADSnews 2011-12-26


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