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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