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Megabus Seeks Traction in Battle with BoltBus

Written by Chris Barker
Edited by Sam Eisen

Megabus has filed a petition requesting a federal regulator break up its main competitor, BoltBus. BoltBus is a transportation company owned in conjunction by Peter Pan Bus Lines Inc. and Greyhound Lines Inc. In 1997, Peter Pan and Greyhound pooled their operations. Megabus now contends that, in light of the vastly different conditions of the modern transportation industry, the fourteen year old merger is now stifling fair competition.  In the words of Dale Moser, CEO of Megabus’ parent company Coach USA, “I don’t have a problem if Peter Pan wants to run it, or if Greyhound wants to run it, but pooling them into a consortium is not a level playing field.”[i]


Megabus’ desire to restrict the operations of BoltBus has grown more desperate as the bus industry becomes more profitable, and recent data illustrates the extent of this growth.  Bus departures in the United States have increased by 7.1% within the past year, whereas airlines and railways have reported increases of only 1.5% and 1.2% respectively.[ii] This evidence suggests that while the transportation industry at large is expanding, the bus industry is expanding particularly quickly.

megabus

The Service Transportation Board, a federal agency, has the authority to act on matters such as these in the name of promoting competition. On April 20th, 2011, the agency ruled against Megabus, claiming that small bus firms were perfectly able to compete successfully in the current market. In response, Megabus filed a request for their petition to be acted upon more quickly, prompting Greyhound executives to comment that they had “simply ignored the very existence” of the ruling.[iii]

Making the case that fair competition was negatively impacted by the pooling of the operations of Greyhound and Peter Pan has proved a difficult task for Megabus. As stated above, the bus industry is expanding more quickly than other methods of transportation, and typical fares for both companies tend to be rather low. Megabus should know: it loves to advertise its one-dollar fares, which are the exception rather than the rule. Based on their April decision, the Service Transportation Board view BoltBus’ operations as legal, and seem content to let sleeping dogs lie. After all, if ain’t broke, don’t fix it.

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**Due to technical difficulties we recently had to switch domains and transfer all of our website content.  Please keep in mind that while we have been publishing articles for two years, the published dates shown may not reflect the initial publish date.

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[i] Plungis, Jeff. “Megabus Won’t Take No for an Answer on Pleas Over BoltBus.” Bloomberg. 28 Dec 2011. 20 Jan 2012. <http://mobile.bloomberg.com/news/2011-12-27/megabus-asks-u-s-to-break-up-boltbus.html&gt;
[ii] “Megabus Challenges Competitors’ Alliance.” Columbia Daily Tribune. 28 Dec 2011. 20 Jan 2012. <http://www.columbiatribune.com/news/2011/dec/28/megabus-challenges-competitors-alliance/?news&gt;
[iii] “Megabus Chases Down Rival BoltBus.” Crain’s New York Business. 27 Dec 2011. 20 Jan 2012. <http://www.crainsnewyork.com/article/20111227/TRANSPORTATION/111229915&gt;

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