Megabus: The $1 road trip

By The Associated Press

For Internet-savvy travelers on a budget, Megabus.com claims to offer a service that makes mainstream bus travel seem pricey: rides from Pittsburgh to Chicago for as little as $1.

The Chicago company, which began operating in a number of Midwestern cities last year, plans to launch service April 2 in Pittsburgh; Ann Arbor, Mich.; Columbus, Ohio; Kansas City, Mo.; and Louisville, Ky.

It already offers service between Chicago and Cincinnati, Cleveland, Detroit, Indianapolis, Milwaukee, Minneapolis, St. Louis and Toledo, Ohio.

"We're really trying to get people out of their car," Dale Moser, the president and chief operating officer of Coach USA, the domestic subsidiary of Stagecoach Group (SAGKF, news, msgs), a Scottish company that runs Megabus. "We think that's the real big advantage."

Megabus uses online ticketing and sidewalk stops instead of ticket counters and bus terminals. Passengers do not buy tickets but instead give drivers reservation numbers when they book online.

The low-cost model was imported from the United Kingdom, where Stagecoach introduced a similar service nearly four years ago.

Pricing like a discount airline

"The demand for this type of service has been outstanding," Moser said before a news conference on a street corner in downtown Pittsburgh.

"I don't have a terminal, so I don't have bricks and mortar," he said. "I don't have the staff that maintains it. Everything's backroom -- it's all computer sales. I have nobody handling cash. I have nobody handling any kind of transactions at the bus. The bus driver is focused on taking care of the customers and driving safely."

A limited number of seats are priced at $1, and the fares increase incrementally based on the time between the booking and departure dates, a pricing scheme used by discount airlines.

"But I will tell you that the highest-price seat is still cheaper than all the alternatives to get from Pittsburgh to Chicago," Moser said. Megabus' most expensive ticket for such a trip, booked 24 hours in advance, would be $43.50, he said.

Its top-end fares, Moser said, are lower than those of Greyhound Lines, the largest intercity bus service in North America.

On a recent day at the Megabus stop in Chicago, two University of Minnesota students, Sean Klontz, 21, and Emily Garber, 20, were returning to Minneapolis after participating in a Chicago-area bicycle race. Klontz said he had paid $30 for the same round trip several months ago but only $20 for this one because he had booked well in advance.

Garber said it was her first Megabus trip and called the ride comparable to Greyhound -- only cheaper. Both said the seats were narrow and that there was little legroom, but Garber added, "I'll sacrifice the legroom for more money in my wallet."

Mason Klein, 18, was returning to Miami University in Oxford, Ohio, after visiting friends in Chicago. He paid $37.50 from Cincinnati to Chicago but only $25 for the return because it was during midweek.

"It wasn't bad for the price, though it wasn't too clean," he said. "I used to fly or drive, but I'm not on my parents' buck anymore, so I guess this'll do."

Warren and Amy Daigle, a Milwaukee couple in their early 50s, got off their first Megabus for a visit to their son in Chicago. Warren called it "safe, pleasant and inexpensive," saying they had paid only $10 each for the round trip.

Ridership appears to be rising

Other low-cost bus lines have also tried to lure passengers away from Greyhound, including Vamoose, which runs a $25 express bus between Manhattan and the Washington suburbs of Bethesda, Md., and Arlington, Va., and various buses that run from Chinatowns in one city to Chinatowns in other cities. One such company, Fung Wah, has been flagged by government agencies for safety issues, including speeding, which was cited as a factor in an accident that injured 34 bus passengers.

Anna Folmnsbee, a spokeswoman for Greyhound, said her company still offers "the best value in transportation on every seat." She noted that Greyhound has dropped fares in some cities, offers discounts such as half-off companion fares and breaks for students, and that unlike some of the newer carriers, Greyhound tickets are refundable and are not schedule-specific -- meaning you can buy a ticket and use it for buses leaving at different times.

Bert Powell, an analyst who follows Greyhound for BMO Capital Markets-Canada, said bus ridership seems to have increased since the Sept. 11, 2001, terrorist attacks, and that regional competition among bus companies has intensified.

"In select routes, you're going to get guys who cherry-pick," he said. "You're going to have guys with three buses nipping at (Greyhound's) heels."

This article was reported and written by Daniel Lovering for The Associated Press.