The growing influence of low-cost "curbside" bus service

A BoltBus is seen leaving Manhattan for Washington D.C., Aug. 4, 2008 in New York City.

Bob Moon: A new study out today says the fastest growing way to travel between cities in the U.S. is discount bus. We're talking a new breed of bus with flashy names like Megabus and Bolt Bus.

As Alex Goldmark reports, they're stealing passengers from Amtrak and the airlines.

Alex Goldmark: Megabus rents this parking lot on Manhattan's far west side, two blocks from the Lincoln Tunnel. But the company doesn't store its blue double-decker buses here, just passengers -- hundreds of them lined in the scorching sun. They're under temporary green awnings waiting for rides to Syracuse, Buffalo, Toronto and elsewhere in the Northeast.

Paul Cormier: I'm going from New York to Providence for $9.50, and that includes taxes.

Paul Cormier booked more than a month ago for his vacation. Student Nelou Rahai is on a last-minute trip to D.C. That's exactly why she's taking the bus. She paid $23, round-trip.

Nelou Rahai: So like if I buy the train like three days before my trip, it's really expensive, whereas the bus isn't. But if I book ahead of time, like at least two weeks before I want to go, I'll take the train.

For example, three blocks away in Penn Station, she could catch Amtrak to D.C. It's usually faster, and runs about $100 round-trip -- if she books in advance.

Joe Schwieterman: Amtrak has lost a lot of business because of these bus companies.

Professor Joe Schwieterman and his team at DePaul University have surveyed discount bus passengers. Right now, it's mostly young people on personal travel that are choosing the bus over train.

Schwieterman: Now we're seeing there are people who have really changed their behavior: they're abandoning commercial flights, they're leaving Amtrak behind.

He says, about a third of bus riders would have otherwise taken the train. Mainly they like the low prices and perks like Wi-Fi. Amtrak wouldnt comment on tape for this story, but Robert Puentes of the Brookings Institution points out this isn't bad for the national rail network.

Robert Puentes: I don't think there's necessarily a problem.

He says Amtrak is experiencing record-high ridership. It's a good thing that more people are able to travel overall.

Puentes: Those who are being diverted are probably those who may have extra time to spare.

Business travelers, he points out, still overwhelmingly choose Amtrak.

In New York, I'm Alex Goldmark for Marketplace.

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Out west, it is the rail freight that messes with Amtrak. Passenger trains are sidetrack for hours waiting for freight trains to pass by. My family was going to El Paso and in the very middle of the desert, waited 6 hours. It takes 4 hours to Las Vegas by car and 5-6 hours by bus is 11 hours by train. LA-Vegas bullet train was proposed in the 1970s but the local politicians, freight trucks, airlines & Greyhound mess up that opportunity. We had Megabus for a while but lack of advertising, lack of enough stations and the airlines help kill it. The only good train is LA-San Diego. Forget LA-San Francisco, takes way too long. When gas gets to $5 dollars, hopefully Megabus and Boltbus will come to SoCal. Does anyone hear business opportunity before cost go up? This is the time while the I-15 is expanding to 3 lanes both ways to Vegas, still a SoCal escape.

I have taken the Bolt bus from Baltimore to New York several times.Not withstanding the cost savings, the bus is comfortable and has a variety of departure times from early morning to late afternoon. Amtrak is not only much more expensive but the low quality of Amtrak track and cars, when compared to European rail travel adds another dimension to bus travel. And then there is Penn Station in New York which can only be described as a pen to hold cattle until the cars come. The promise of creating a new station across the street at the existing Post Office continues to look like a pipe dream. And now that the country is on an ill-thought out-debt-reduction-plan-at-any cost, it is doubtful that we'll see new track, new cars and a new New Penn Station,so the future for bus travel looks bright indeed.

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