Alex Goldmark is a senior producer in the newsroom for New Tech City and Transportation Nation.
After 40 years of retrenchment, the bus industry is making a comeback -- in a big way, according to research from DePaul University. As we've reported before, discount curbside buses are currently the fastest growing mode of intercity transportation in the U.S. A new survey released Monday finds that bus passengers are overwhelmingly young, and they are being diverted from rail, even more than they are from driving.
"We estimate the curbside sector has grown to more than 400 daily departures. And that's big. That means it has become almost a third of the size of the national intercity bus network" of Greyhound, said Joseph Schwieterman, the director of the Chaddick Institute for Metropolitan Development at DePaul University. "There's over 60 points served now [by curbside buses] and there's five major hubs. It has grown from a baby industry to an industry that has blanketed the Midwest and a good chunk of the Northeast."
At the heart of the increase in popularity of intercity buses are two companies, Bolt Bus and Megabus, each owned by traditional bus operators. To find out just who is riding this new breed of motorcoach, Lauren A. Fischer and Schwieterman led a team of DePaul researchers to survey more than 1,000 bus riders, mostly from those two companies.
According to their report, the portrait of a curbside discount bus rider is younger, under 35, traveling for leisure or personal reasons, and tech savvy. "They're mainly younger people traveling on personal business." The survey found that 72 percent of Bolt and Megabus riders were under 35. Almost half of all riders were 18-25 years old. That's actually a diversification.
"When the sector first started, it really was just almost exclusively younger people. Now we're seeing new demographic sectors coming to the bus. But it's still dominated by young people," said Schwieterman.
Many of those are young people who just wouldn't travel without these buses. More than one in five passengers said that if it weren't for the curbside bus, they wouldn't be traveling. So these buses are generating new trips with their low fares--as low as $1 in some cases.
Fischer said, "in the Midwest we have a bit of a phenomenon, in that these buses offer service to a lot of places where Amtrak doesn't go, so it's giving people new travel options for places like Cincinnati which is not that easy to get to from Chicago on a common carrier."
In addition to creating new travel, Bolt and Megabus are also snagging trips some from trains, planes and automobiles according to the survey.
"Amtrak has lost a lot of business because of these bus companies," Shwieterman said.
When asked what other mode of transportation riders would have taken if not curbside bus, rail was the most common answer, at 28 percent. In the popular Northeast corridor, 34 percent of bus riders said they would have otherwise been riding Amtrak.
Personal travel growth has outpaced business growth, he said. Buses are "winning away a lot of these passengers who are not on expense reimbursements."
At the end of the day, price drives decision. "Word has spread," said Joe Schwieterman, who explains that Bolt Bus and Megabus have extremely high brand recognition now with travelers as the cheap, but reliable way to travel certain routes.
But these findings don't necessarily spell doom, or even a problem, for Amtrak. The rail company uses dynamic pricing, and trains regularly hit capacity. As the most price-sensitive passengers shift to buses, some new passengers will decide to take Amtrak, Schwieterman admitted.
Cliff Coles, an Amtrak spokesman, wouldn't discuss the study because he had not had time to review it thoroughly, but he pointed to Amtrak's record ridership recently and said, in an email, "Amtrak is aware of other modes of transportation as options to travel, but still considers rail travel as the hassle-free method to travel along the Northeast Corridor with the addition of free Wi-Fi service on all Acela Express trains. Our ridership figures demonstrate our growing popularity."
Robert Puentes, senior fellow at the Metropolitan Policy Program at the Brookings Institution, doesn't think this is a problem for Amtrak. "Those who are being diverted are probably those who have time to spare." He sees it as positive that more people are taking discount buses.
Airlines, however, "are really between a rock and a hard place... short haul flights are becoming less attractive all the time," Schwieterman said. And with mounting fuel costs, airport fees and the security line delays, it's getting harder and harder for airlines to compete with the bus, or even the train, on short trips.