Peter Pan and Greyhound Shake Up the Transit Market with BoltBus
Ridership statistics show that the bus has never been as popular as it is today. There are many reasons for this, ranging from spiraling gas prices to a desire to go green. All this has created business opportunities, but also immense competition, and a new joint venture on the part of Peter Pan and Greyhound called BoltBus is a response to both.
Cathleen Carr does stand-up comedy for a living. Shes one half of an acclaimed burlesque team called Two Girls for Five Bucks, which performs in several clubs in New York, among other places, on a fairly regular basis.
To get to Gotham, the Boston resident will occasionally drive Im getting pretty good at timing it so I dont arrive when the parking bans go into effect, she said with the delivery of a comedian but usually takes the bus, which, she notes candidly, is no laughing matter.
Ive ridden on all these guys, and I hate all of em, she said in a tone brimming with exaggeration as she swept her hand across Bostons South Station and listed off most of the carriers that run buses to New York.
Actually, Ive made my peace with bus travel, she continued, softening her tone considerably and going on to say that, given the alternatives, or the lack thereof when one considers the cost of gas or an Amtrak ticket, the bus is a necessary and acceptable option.
And now its much more so, at least for Carr, with the arrival of BoltBus and the start late last month of its Boston-to-New York service. The new carrier, a joint venture between long-time rivals and industry giants Greyhound and Springfield-based Peter Pan Bus Lines, is starting to turn some heads.
BoltBus borrows heavily from South-west Airlines right down to the bright orange paint on the buses, priority seating, and the hiring of drivers who can make the commute fun, or at least more fun and less so from defunct airline Skybus; it offers at least one seat per trip for $1, and has rates that start low, get higher as the departure date draws closer, and are typically lower than what other carriers are charging.
The buses, which drop off passengers curbside (more on that later), are right out of the box, featuring free WiFi, power outlets, more leg room (one row of seats was taken out), and bathrooms with real flush toilets. This package of amenities resonated with Carr, who rode back to Boston from New York on one of the carriers first runs on that route, paid $1 for the ticket (all seats were that price for the first four days), and pronounced it the best bus ride of my life.
She was back at South Station a few days later waiting for the 5:30 p.m. BoltBus to New York (fare: $15), hoping, and expecting, that her first experience would become the norm, and predicting that the back pain she was enduring from frequent bus riding would subside with the more-comfortable seating.
Carr is exactly the kind of passenger Peter Pan and Greyhound had in mind when they launched BoltBus, which constitutes an intriguing, $15 million gambit taken in response to explosive growth in bus ridership in recent years and what has become white-hot competition for that business, especially between major Northeast cities.
Indeed, bus wars is a phrase being seen and heard with increasing frequency in the business and travel press, especially with regard to the popular New York-to-Washington, D.C. route, which has a number of players slugging it out, including Peter Pan, Greyhound, and now BoltBus. But it also applies to the Boston-to-New York run. Soon, there will be no less than five carriers competing within that market, including so-called Chinatown carriers Fung Wah and Lucky Star, and all with highly competitive fares.
Players need ammunition to survive and win in such a conflict, and BoltBus appears to be a solid addition to the arsenal, said Bob Schwarz, Peter Pans executive vice president. He said BoltBus was created to capture part of the existing market (people like Carr), but mostly to create new riders who would be attracted by its many amenities, including that curbside service.
Elaborating, he said that many professionals, college students, and other riders would prefer to disembark on the street, near a subway station, rather than in a crowded terminal like New Yorks Port Authority. Competitors such as Fung Wah and Lucky Star have been providing such service for years Schwarz goes so far as to call them curbside carriers and with excellent results.
In many ways, theyve developed a new market, he said of the curbside carriers, who cant park on street corners in Boston (laws there prohibit the practice), but can in other markets. Before launching BoltBus, we listened to consumers, and many of them said they didnt want to go to big stations, and instead wanted to go to metro stops.
Thus, the official BoltBus destination in New York is the corner of 34th Street and 8th Avenue, which is about a block from Penn Station.
By stopping there, while also providing those aforementioned amenities and prices below other carriers, BoltBus may lure train travelers and even motorists to the bus, especially with gas prices at current levels, said Peter Pan President Peter Picknelly.
In this issue, BusinessWest documents the arrival of BoltBus, puts it in the context of a changing, ultra-competitive bus market, and looks at what it all means for Peter Pan.
Tracing Their Routes
It was the bathrooms that first caught the attention of Elizabeth Kennedy.
Actually, it was her father who first saw the BoltBus news item. He said the bathroom sounded really sanitary, said Kennedy, membership coordinator for something called Chefs Collaborative, which promotes sustainable cuisine. Like Carr, she commutes often from Boston to New York, and was, as she stood waiting to board the 5:30 BoltBus, hoping for a better riding experience.
I figured it was certainly worth giving this a try, said Kennedy, who was heading to New York in advance of an early-morning meeting. I dont have anything to lose.
Like Carr, Kennedy said she is content with, but not overwhelmed by, traditional bus service, and (unlike Carr and many others) is reluctant to ride on the curbside, or Chinatown, carriers because of well-documented safety issues. She was open to checking out a new option, and shes not alone in that sentiment.
Flora Masciadrelli, marketing manager for Peter Pan, who was present for the BoltBus rollout ceremonies for the three routes involving New York (Boston, Washington, and Philadelphia), said the $1 fares did what company officials hoped they would; they got people on the buses, even if they didnt have any business in whatever city they bought a ticket to.
I ran into people in two families traveling together nine people who paid a total of $18 to go New York and back, she said of the Boston rollout. I ran into someone else who said, Im exploring for a dollar, I figured I couldnt go wrong.
The expectation is that BoltBus will resonate with frequent riders with a purpose, including business people, college students, people visiting family, and a group that Masciadrelli calls excursionists. And early results show that such optimism is warranted.
Most of the 33 vehicles in the BoltBus fleet have been running at about 80% to 90% capacity (after the initial $1 fare offer expired), said Masciadrelli, adding that, meanwhile, ridership on regular Peter Pan service has not been impacted.
This means, she said, that BoltBus is succeeding in taking market share from the curbside carriers, inspiring new riders, or, most likely, both.
Were not really competing against ourselves were creating a new service that appeals to the adventurous, she explained. So far, were attracting new bus riders, but were also gaining attention from people who rode some of the other bus lines.
And this bodes well for BoltBus and thus Peter Pan at a time of enormous opportunity and challenge within the bus industry.
There is plenty of the former, said Picknelly, noting that when the price of gasoline climbs above $3 per gallon, consumers start to look, and look hard, for alternatives to filling their tank. The commodity is now well above that mark, with most signs pointing to it going higher before it goes any lower, he said. We can see it within 48 hours of when it hits that $3 mark ridership always goes up.
Meanwhile, the bus has historically been a practical option for tourists, business people, and college students bound for large metropolitan areas, where the cost to park a vehicle for a weekend could be a multiple of the price of a bus ticket, he continued, and it also resonates with a growing number of people trying, in whatever ways they can, to go green. The bus is the most fuel-efficient vehicle on the planet.
As might be expected, though, the many business opportunities created by the convergence of these trends and issues, especially in large urban markets, is spawning what many consider unprecedented levels of competition, said Schwarz, using Boston as an example.
Where once there were only a few dominant carriers making the Boston-to-New York run, there are now five, counting BoltBus, with still another, Scotland-based Megabus (so-called because it runs mostly large, double-decker buses), due to make its arrival around Memorial Day with dueling $1 fares.
This is an attractive market, in part because of all the college students, who are good customers, Schwarz explained. Its always been a competitive market, but now its getting very crowded.
The competition is equally keen, if not more so, in some of the other popular Northeast runs, said Picknelly, adding that, while Peter Pan is based in Springfield, it logs only about 5% of its business running buses to and from the City of Homes. Most of the rest is transit involving major Northeast cities, where the bus has never been more popular.
There are 1 billion people riding the bus a year, he told BusinessWest. Not many people know that, nor do they understand just how competitive the business has become.
The explosive growth of bus travel in general, and curbside service specifically, prompted Peter Pan and Greyhound to start talking. The discussions, which began a few years ago, centered on entering the curbside business but with some new wrinkles.
What emerged was the result of research and development transportation-industry style. The research was into what travelers liked and disliked, and the polling included bus riders, train travelers, and flyers.
What emerged from that research, said Dustin Clark, a spokesman for Greyhound, is something unique in the bus industry, a carrier that blends curbside service with those aforementioned amenities, and the chance to bolt for a buck, as it says on the back of each BoltBus.
This is unlike anything currently on the market, said Clark. This is a new service, one that is focused on providing riders with a fun trip.
This unique quality allows BoltBus to compete against rival curbside carriers, but not against Peter Pan and Greyhound, which still appeal to what Schwarz calls those perhaps less adventurous travelers who prefer the comfort of a large station.
As he talked about the new business venture, Picknelly drew an analogy between Gap and another clothing retailer it owns: Old Navy.
You see them in the same malls, sometimes just a few hundred feet from one another, he explained. Theyre not really competing against one another theyre appealing to different customers. Its the same with Peter Pan and BoltBus; theyre different services competing for different kinds of riders.
While some industry watchers consider BoltBus to be a gamble, perhaps one bus line too many at a time of immense competition, Picknelly doesnt see it that way.
I think this is a smart business decision, he said. We did our homework, we watched what the street-side carriers were doing, and now were going after that market. Soon, I believe, well be the dominant street-side carrier.
Pulling Out All the Stops
As she waited to board the BoltBus and talked with BusinessWest, Carr gestured toward the Fung Wah gate and said, I almost feel guilty about not riding with them anymore almost.
She went on to say that she probably wont be riding the bus any bus nearly as much in the future because shes spending so much time in New York, shes decided to move there later this spring.
I wish theyd started this sooner, she laughed while pointing to the parked BoltBus. That would have saved me some back pain.
The timing may not be perfect for Carr, but it appears to be just right for Peter Pan and Greyhound, who have considerable hopes and expectations riding literally and figuratively on a bright orange bus.
George OBrien can be reached at[email protected]